Mark Schill, Praxis Strategy Group
Workforce development challenges have become perhaps the largest priority—trumping even job growth—for many areas of the heartland and particularly in smaller, growing metropolitan areas. Workforce initiatives traditionally have been federally funded and administered by state governments, sometimes creating overly staid systems not adaptable to meet local needs.
Local economic development organizations can provide the bridge needed to communicate the needs of private-sector employers. This bottom-up, people-focused approach driven by project-by-project partnerships among economic developers, chambers of commerce and city governments, as well as K-12 and institutions of higher education, is likely to be the future of workforce development.
In a recent report by Joel Kotkin, released alongside Heartland Forward, entitled: “The Labor Crisis and the Future of the Heartland,” Kotkin explores how decades of a reduction in domestic manufacturing, demographic shifts and labor force participation preceded – and exacerbated – shifting labor dynamics. It also looks at ways business, education and policy leaders can align around historic opportunities to reshape the workforce in the wake of enormous change.
In particular, the heartland, by focusing on skills and keeping costs low, has an enormous opportunity to reclaim its legacy as a place for upward mobility. Indeed, with investments in jobs, training pipelines and diverse communities, the heartland is well-positioned to lead a resurgence in the U.S. labor market.
Workforce development and strengthening of talent pipelines comprise three major categories:
- Training and talent production
- Talent attraction and networking
- Community development and attractiveness
Training and Talent Production
High school career and technical education programs are growing steadily. The most aggressive communities are creating specialized training facilities, sometimes as special high schools, to augment traditional classwork. These facilities house equipment and spaces needed for hands-on programs that include health care, building trades, manufacturing and engineering.
North Dakota recently allocated nearly $90 million in federal coronavirus relief funds to support new career and technical education centers, the first such capital investment since the 1970s. Thirteen new and expanding facilities across the state received funding. In the Grand Forks region, the local economic development group partnered with the public school district to survey high school students and employers to design new programs and raised $11 million in private-sector funds in less than three months to match a $10 million state investment.¹
Traditional two-year institutions are increasingly offering short-term workforce training certificates for specialized programs. These programs are often shorter than one semester and tailored to fit local needs. The Ames (Iowa) Chamber of Commerce recently partnered with a regional community college to add “wraparound services” to these modular certificate programs to support students who may not otherwise have time to attend training due to family or work obligations.² Recognizing the need, many four-year institutions now offer shorter certificate training programs delivered via distance education and in person.
State governments are increasingly partnering directly with private-sector employers to deliver customized worker-training programs. Wisconsin’s Fast Forward grant program distributes training funds directly to the point of need, competitively awarding roughly $3 million in matching funds to help workers climb the career ladder and another $2 million per year for teacher training and specialized education equipment.
Talent Attraction and Networking Initiatives
Many regions in the heartland are shifting efforts from attracting major employers towards attracting people, including specific people-recruitment initiatives. Components typically include targeted information campaigns for new residents, direct recruiting and concierge services, and welcoming programs to help new residents get established.
Cedar Rapids and Iowa City are separate but adjacent metropolitan areas in Iowa with separate chambers of commerce and economic development groups. Yet, they are collaborating on the regional brand ICR Iowa, an aggressive talent-attraction initiative. The program includes a “talent hub” clearinghouse of job seekers looking to move to the region and a “wingman” program that matches newcomers with local mentors.³ A parallel initiative called ICR Future is creating platforms for students to explore high-demand career pathways.⁴
Some communities are experimenting with direct incentives—often cash grants—to directly lure new residents to the region. Perhaps the most notable is the Tulsa Remote program, offering foundation-funded $10,000 grants to new remote workers. While it may seem counterintuitive to recruit remote workers who come to the region already employed, the program has successfully lured 500 new residents. Tulsa appears to be playing the long game, hoping these new residents—many in software and other well-paying, knowledge-based jobs—will help establish new networks of talent locally.⁵ While the jury is still out on this approach, Tulsa’s $13-to-$1 return on investment and hints of a budding entrepreneurial ecosystem suggest that this people-focused approach to development may have legs.⁶
Localized worker-to-employer clearinghouses and matching programs can often serve local labor markets better than statewide job services systems. In a 10-county region surrounding Duluth, Minn., and covering that state’s Iron Range, the NorthForce online job-matching system is supported by public and private partners across the region. This one-stop resource and its associated matching and internship programs have proved much more effective than employers and workers fending for themselves.⁷
Community Development and Attractiveness Programs
Improving housing supply and availability has now become a key workforce issue, particularly in mid-sized and smaller communities. Affordability is certainly a challenge, although many regions are finding that availability of mid-tier homes suitable for families is also an issue. The small hamlet of Warroad, Minn., on Lake of the Woods at the Canadian border, discovered a lack of regional builders was constricting housing supply. The city partnered with Marvin Windows, whose headquarters is in Warroad, to study the issue and develop a housing strategy that would add market-rate rental units and support area home builders.
Child care is another major workforce hurdle in the heartland. Many workers with young children simply do not have time to access career-advancement programs, while others cannot afford to work because high child-care costs consume the wages they would earn. The Sioux Falls Thrive program is a specific initiative to accelerate the development of children in that South Dakota community. It includes a partnership of the local chamber, United Way and two local foundations who are dedicated to improving local child-care capacity.⁸ Policy recommendations include increasing financial assistance for middle-income families, incentivizing employers to assist or provide child care, focusing financial assistance towards providers offering infant care, and adding business-mentoring programs for providers.⁹
The 1990s and 2000s saw large metropolitan areas soaking up new residents from surrounding areas as migrants sought better job opportunities; however, smaller cities and towns hope to see that trend swing back in their favor by improving job prospects locally. The advent of remote work also figures to have a positive impact on these smaller cities and towns. The best prospects for places like Fargo, Sioux Falls, Des Moines, Iowa City and Northwest Arkansas may be suburban residents in search of more balanced lifestyles. Regions of this size – and smaller – are now adding and promoting local arts, recreation and family-friendly atmosphere as specific people-focused development strategies.