Governors Economic Summit (Cobo Hall March 18, 2013)

Snyder to lead forum to focus on job needs

   
Michigan has 62,000 unfilled jobs posted on its www.MItalent.org   website, but Gov. Rick Snyder frets that the state might not have the right people to fill them all.

   That worry is what has prompted him to convene the Governor’s Economic Summit March 18-19 at Cobo Center in Detroit — and to personally attend and ride herd on it for both days.

   “This is a big deal,” he told me Friday in an interview at his Cadillac Place office in Detroit.

   Snyder’s aim is to bring private sector employers together with economic and work force development professionals to talk about future hiring needs in great detail. Those findings would then be shared at an April summit on education, in hopes that Michigan can better align the skills of its people with the talent that growing companies will pay good money to get.

   “I do believe there’s a skills gap; 62,000 is a big number, and these are good positions,” he said.

   The very existence of a so-called skills gap is a subject of ongoing debate among economists, some of whom argue that plenty of qualified people are available to do the work, if only businesses were not so reluctant to hire, pay a decent wage and provide basic training.

   Indeed, Paul Traub, a Federal Reserve Bank economist, told me last week that “it’s really difficult to tease out of the data” whether a skills gap truly exists, or if so, how big a problem it is.

   Traub, who works in the Detroit branch of the Fed’s Chicago region, will speak to Snyder’s summit on March 18, and he’s been diving into the data to assess how Michigan’s job market differs from the U.S. economy as a whole.

   Michigan has added private sector jobs faster than the nation as a whole the past few years, he said, chiefly because of a bounce-back in auto manufacturing. The housing sector and government employment remain weak, and Michigan employment is still about 270,000 jobs below pre-recession levels.

   Whatever the actual scope of Michigan’s skills gap, Snyder said it’s important to find out what’s really happening and do something about it.

   Thirty or 40 years ago, he said, “there were more jobs coming out of school, you could be a generalist in a lot of fields and find a spot.

   “Today’s world, I think, is much more segmented and specialized,” he added.

   Doug Rothwell, president of Business Leaders for Michigan, the group of CEOs from the state’s largest companies, said supply and demand for specific jobs is very hard to predict.

   “Ten or 15 years ago, companies had lots of secretaries. Not so much today. But back then we didn’t talk about app developers; now we need a lot of them,” said Rothwell, who will also speak at the summit and share results of a study BLM commissions. “Long-term,” he said, “we know the big issue is ‘Are we going to have enough educated workers in the knowledge economy?’ ”

   Other highlights of the summit agenda include:

   A speech by Gallup CEO Jim Clifton, author of the 2011 book, “The Coming Jobs War,” and an evening focused on placemaking, a hot concept in buzz about how to appeal to young talent. Stops will include the M@dison Building, Fox Theatre and Ford Field in downtown Detroit.

   More than 300 people have signed up for the March 18-19 summit so far. To register — the fee is $150 to attend — go to the www.Michiganadvantage  .org   website.

   • CONTACT TOM WALSH: 313-223-4430 OR TWALSH@FREEPRESS.COM  

GOVERNOR’S ECONOMIC SUMMIT

   When: March 18-19 Where: Cobo Center Price: $150 per person includes access to speakers, sessions and materials; Sunday evening reception; Monday evening Placemaking event; two continental breakfasts and lunch on Monday.

   To register: www.michigan   advantage.org  

TOM WALSH TALKS WITH GOVERNOR ABOUT GETTING TO ROOT OF THE PROBLEM

HIRING IN MICHIGAN

IS SKILLS GAP A BARRIER TO JOBS?

Some say that’s reason for Michigan’s lethargic recovery

By Greg Gardner and John Gallagher Free Press Business Writers

   There was nationwide applause with Friday’s report of 236,000 jobs created in February, driving the national unemployment rate down to 7.7% and helping drive the Dow Jones Industrial Average to a new record.

   But the good news begged the question why Michigan — with a January jobless rate of 8.9% — hasn’t shown comparable job growth over time.

   A short, but important answer is the one-month lag between when national and state data are reported. January data are the latest state data available. There are positive trends in metro Detroit and statewide that likely will be reflected when the state’s February jobs data come out in early April.

   “I’m getting calls and e-mails every day from people who are asking for my résumé,” said Victor Volkmann, 48, of Ann Arbor who started as an information technology contractor nearly two years ago at ProQuest and was hired full-time in late 2011. “Things are so much different than they were in 2009 when you couldn’t get people to return your calls.”

   Consumers are buying new cars, trucks and houses at a brisker pace than any time since the financial crisis. Chrysler has hired at Warren. Ford is adding people at Flat Rock and Dear-born. New investment in downtown Detroit real estate is generating construction work.

   Offsetting those positive trends could be the impact of the federal government’s sequester, but the direct impact will be much less in Michigan compared with Virginia and Maryland.

   Some say Michigan’s more lethargic jobs recovery when compared with the country as a whole and to some neighboring states has to do with worker skills. Wisconsin’s unemployment rate was 6.7% in December, Ohio’s was 7% in January and Indiana’s was 8.3% in December, the latest figures available for the states.

   Steve Armstrong, Kelly Services’ senior vice president of U.S. operations, said there is a stark contrast between demand for more highly skilled, technically trained workers and the market for unskilled entry-level positions.

   He estimates the jobless rate for the first group is 4% or less, while more than 10% of workers in the unskilled labor force are still looking.

   Employers lament a shortage of candidates with the appropriate skills for the jobs they have.

   Workers, both unemployed and currently employed looking for a better opportunity, tell horror stories about incompetent human resources bureaucracies, suffering through eight or more interviews for the same position, dysfunctional screening software that might eliminate the perfect candidate, and executives who are just afraid to commit because they are comfortable with their profits, cash reserves and stock price even if essential work is left undone and future sales are lost.

   “There is no evidence of a ‘skills’ mismatch in the labor market,” said economist Heidi Shierholz of the Economic Policy Institute in Washington, D.C. “What we have is a broad-based lack of demand for workers, not a skills problem.”

   In her view, businesses aren’t hiring because demand for their goods and services hasn’t risen enough to require new workers.

   But Kelly Services’ Arm-strong said there is a tension at the lower end of the wage spectrum that reflects more than sluggish consumer demand.

   “Because this recovery has been so protracted, we are still wrestling with wage pressure at the low end,” he said. “Look at how low inflation has been. At some point in time what employees say is a skills gap is going to have to result in a raise in wages.”

   Peter Capelli, a professor of management at the University of Pennsylvania’s Wharton School, said the labor market has been so weak for so long that managers think they can limit their search to those currently employed.

   “Early on in the recession, when literally millions of people were being laid off, it was easy to find someone fresh out of a job with the experience and skills needed to step right into your vacancy,” Capelli wrote this week in the Harvard Business Review.

   Today, those types of people are working somewhere else at a higher salary than many companies are offering.

   While human resource managers may frustrate many job seekers with repetitive tests and interviews, many HR staffers were laid off in the wake of the financial crisis.

   These were the people who would push back when an executive added impossible requirements to a new job description, Capelli said.

   They would point out when a salary was inadequate for the level of experience wanted.

   In their place is a cultural fear that making no hire is always better than hiring the wrong person.

   There are still 12 million unemployed Americans as of the end of February, according to Friday’s Bureau of Labor Statistics report.

   That is 774,000 fewer than a year earlier, but too many for those who are still looking for work.

   Melanie Fuscaldo is a career counselor and life coach in Ann Arbor. She has seen her business expand in the last 10 months.

   “There are companies that are having difficulty committing to hire or not paying well enough,” she said. “But I also see larger companies hiring and paying decent salaries. Sometimes we just see a lag between the decisions and the numbers reported. I think that’s a lot of what is going on.”

   • CONTACT JOHN GALLAGHER: 313-222-5173 OR GALLAGHER99@FREEPRESS.COM  

RICK NEASE/DETROIT FREE PRESS

HIRING SURVEY

   Arecent survey of employers by ManpowerGroup asked for the primary reasons they’re not hiring.

   • 55% reported lack of available talent.

   • 54% marked the response, “Applicants are looking for more pay than offered.”

   When asked what they plan to do about it

   • 37% said they’d focus on retaining current staff.

   • 36% said they’d promote current workers able to learn the necessary skills.

   • 28% said they would offer more training to existing staff.

   • Increasing pay for new hires was not cited at all.