BIRMINGHAM, Alabama – Despite solid growth in Alabama’s advanced manufacturing sector and a string of high-profile economic development triumphs, economists and analysts are sounding alarms about a threat to the state’s growth prospects.
It’s not another recession that worries these researchers. Instead, they warn that a shortage of skilled workers in Alabama could make it difficult to fill the jobs the state is recruiting to build on successes like Airbus and Remington.
Here’s the problem, in a nutshell: Alabama’s job growth is projected to outpace labor force expansion in coming years. At the same time, job requirements are rising, with employers increasingly looking for workers who have more education and skill certifications than in the past.
This ongoing threat has prompted action. Earlier this year, Governor Robert Bentley selected a diverse group of senior business managers, education leaders, and political officials to form the Alabama Workforce Council (AWC), which has been tasked with examining strategies to overcome these challenges.
The AWC will help rewrite Alabama’s playbook on workforce development.
Zeke Smith, an Alabama Power executive vice president who serves as chairman of the AWC, said the group’s chief goal is to ensure that Alabama’s business sector and education systems work together so that the state has the skilled workforce it needs and the kind of jobs its citizens want.
“Alabama devotes significant resources to education and workforce development at the local, regional and state levels. The Governor has expressed his clear desire for these entities to work together to ensure that all Alabama citizens have the opportunity to pursue their educational goals and realize attractive, long-term career opportunities,” Smith said.
“By harnessing the focus, strategic direction, combined efforts and expertise of these educational and workforce partners, Alabama can continue to make great strides in delivering the workforce that will power Alabama’s economic future,” he added.
Fortunately, the AWC can count on a solid base as it begins its work.
For one thing, Alabama’s workforce training programs already are considered among the top programs in the nation. AIDT, an arm of the Alabama Department of Commerce and the centerpiece of those efforts, has worked with 3,000 companies and helped to recruit, select, and train 400,000 workers. Plus, AIDT offers specialized training facilities for auto companies, shipbuilders, and robotics operators.
In addition, Alabama education leaders have lined up behind the effort. Both the Alabama Community College System, led by Chancellor Mark Heinrich, and the state’s K-12 system, directed by Superintendent Tommy Bice, have moved to strengthen their career and technical education programs as part of a new focus on worker preparedness.
“Preparing Alabama workers for high-wage, high-demand jobs is our No. 1 priority,” Governor Bentley said.
For the AWC and for Alabama, the stakes are high.
In its “Charting Pathways to Progress” report earlier this year, the Public Research Council of Alabama (PARCA) said Alabama must produce a “bigger, better-skilled and better-educated workforce” if its economy is going to reach full potential. But first, the organization said, teamwork will be needed to clear some significant hurdles.
“It is a situation that is going to require changes not only from the educational establishment but also leadership from business and industry,” the non-partisan research group said. “Because whether we realize it or not, we’re all headed together into some pretty strong headwinds.”
Meanwhile, economists have pinpointed several trends that threaten to slow Alabama’s growth curve.
For instance, Dr. Samuel Addy and his colleagues at the University of Alabama’s Culverhouse Center for Business and Economic Research warned in 2013 that the state could face a large “shortfall” of qualified workers in coming years unless steps are taken to properly align workforce supply and demand. These shortfalls suggest that businesses could have a difficult time finding workers who possess the skills needed to fill the jobs employers have available.
An updated report in March 2014 predicted worker shortfalls approaching 115,000 in 2020 and 219,000 in 2030.
“The state must therefore focus on worker skills and the projected shortfalls as the top priorities through 2030,” Dr. Addy and fellow researchers wrote in the University’s 2014 “State of the Workforce Report.”
A looming retirement wave is expected to play a major role in these shortfalls in Alabama and across the nation. Alabama’s manufacturing sector, in particular, is facing a potential problem as members of the baby boom generation move closer to retirement, depriving factories of their most skilled workers and leaders.
“All the mature industries in Alabama are facing that scenario,” said George Clark, president of Manufacture Alabama, a Montgomery-based trade group for manufacturers. “It’s across the board because baby boomers are across the board.”
Clark, who serves as the AWC’s vice chairman, said many Alabama manufacturers aren’t sure how they are going to replace these key workers after retirement. He said it’s urgent that workforce development programs “increase the number of bodies in the pipeline.”
Other challenges must be addressed if Alabama is going to expand its labor pool and improve worker preparedness, researchers say.
Educational attainment levels need to rise. While recent high school graduation rates have been climbing, the number of Alabamians over the age of 25 who have graduated from high school (83 percent) is lower than the U.S. average (86 percent). Slightly more than 22 percent of these Alabamians have a bachelor’s degree, trailing the nation’s 28.5 percent average.
Meanwhile, Alabama’s population growth is predicted to be modest in coming years, meaning that there won’t be an influx of new residents to take the available skilled jobs. It also means little relief for the state’s low labor force participation rate, which today stands at around 57 percent after falling for several consecutive years.
“Many elements of an effective workforce strategy are being developed in Alabama, but it is imperative that we shift those efforts into high gear,” PARCA’s report said. “There are clouds gathering on the horizon: demographic and technological trends that could keep the state and its people from reaping the full reward from the economic development investments already made.”
ANSWERING THE CHALLENGE
Governor Bentley believes the AWC represents a critical step to head off the threats to Alabama’s growth and its economic development efforts, which have attracted projects with 55,000 jobs and $14 billion in capital investment since 2011.
“The Alabama Workforce Council is a world-class representation of many of the state’s top business and industry leaders and will be vitally important to building and maintaining high-quality partnerships between industry, education and workforce training institutions,” Governor Bentley said when he appointed the panel.
The AWC stemmed from a recommendation by the Governor’s College and Career Ready Task Force, another group that brought together key education, government, and business officials to explore how to improve educational outcomes and promote workforce and economic development.
“College and career readiness is particularly important to Alabama now, as the economy continues to grow and add jobs,” the Task Force said in a report to Governor Bentley. “Ten year industry forecasts show a significant rise in demand for skilled workers, particularly those with a high school degree and some industry credentials, and also for those with bachelor’s degree and above.”
Clark of Manufacture Alabama thinks the work of the AWC and the growing alignment between business and education to create career pathways for students will pay massive dividends for the state.
“We are so close to doing something really monumental in Alabama,” Clark said.