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Demand-Driven Problem Solving Needed in Tight Labor Market

Post Date: 01.18.2017

Demand-Driven Problem Solving Needed in Tight Labor Market

The Executive Office of Labor and Workforce Development recently announced that the Massachusetts unemployment rate dropped to 2.8%, the lowest rate of unemployment since January 2001.

An unemployment rate of 2.8% is great news for the Commonwealth and for job seekers looking for a new job or better job. However, it presents challenges to businesses struggling to meet their talent needs, particularly in the face of an aging workforce that is retiring or may retire in the near future.

Tight labor markets create opportunities for workforce development and education professionals to create innovative partnerships with industry to prepare Massachusetts residents who are underemployed for better jobs and residents who are unemployed for their next job or first job. It is also an opportunity to bring people back into the labor force who have been disconnected from work for an extended period of time.   This “sector strategy” will help to grow the labor force and to provide opportunities to populations that have not been able to connect to the strong economy.

In December, on behalf of Secretary Ronald Walker, II and the Executive Office of Labor and Workforce Development, Commonwealth Corporation released two requests for qualifications, seeking partnerships that will train and support Massachusetts residents with limited or no attachment to the labor force for jobs that are in demand. These funding opportunities target populations that have faced high rates of chronic unemployment, as identified by a Task Force created by Governor Baker in 2015. The Task Force focused on African Americans, Hispanics/Latinos, Native Americans, individuals with disabilities and Gulf War Era II Veterans, populations with unemployment rates ranging from 7 percent to 20 percent.

This approach to preparing Massachusetts residents for work builds partnerships of community-based organizations, multiple employers, workforce organizations and educational institutions that will design training that meets the hiring requirements of specific businesses with immediate hiring needs. These partnerships will include organizations that have experience working with individuals with limited labor force attachment and connecting individuals to the supports necessary to ensure that they are able to complete training and succeed in the workplace. The partnerships’ programs will be funded through the Workforce Competitiveness Trust Fund and the Health Care Workforce Transformation Fund, consistent with the demand-driven strategy prioritized by Governor Baker and Secretary Ronald Walker, II.

We know this approach works. Our last WCTF grant round, Addressing the Middle Skills Gap, wrapped up in June 2016. This program awarded $4.5 million to 15 organizations to train and place unemployed and underemployed job seekers between 2013-2016. Our outcomes are as follows:

  • 903 job seekers were enrolled and 817 (90%) completed training;
  • 670 people were placed in jobs at 447 companies; this is 82% of graduates and 74% of participants, compared to a national enrollment to placement rate of 56% for similar programs; and,
  • 83% of them were retained for at least 6 months as compared to a national average of 64% and were earning an average of $15.02.

Whether facing a strong or challenging economy, we are committed to investing in partnerships with industry, education and workforce to meet the needs of businesses and workers across MA. We celebrate Massachusetts’ success in connecting more workers to employment within our state’s businesses, and we will continue to work to support demand-driven training programs that achieve strong placement outcomes.