Northwest Tennessee Workforce Study

Business and Economic Research CenterJennings A. Jones College of BusinessMiddle Tennessee State University

Northwest Tennessee Workforce Study

Business and Economic Research CenterDavid Penn, DirectorMurat Arik, Associate Director

Susan Harmon, Associate Professor, Marketing

Overview of Study

Current economic structure

Preparedness to grow

Strengths and weaknesses

Research Methods

Analysis of population, employment, income, and wage trends

Survey of local employers Survey of workforce professionals Focus group interviews

Research Method

Published Data

Surveys

Focus Groups

Study Area

Seven counties stretching from the Memphis suburbs north to Kentucky.

Represent between 3% and 4% of Tennessee employment, labor force, and population.

Context

Important trends – Increasing importance of trade.

Foreign-made goods more in demand. Exports also growing quickly. International trade share of GDP on the

rise.

Context

Important trends – Information technology revolution.

IT sector responsible for large share of recent growth.

Widespread usage of IT has reduced production costs, increased productivity.

Context

Consequences Competition much more intense than

ten or twenty years ago. Companies have little pricing power.

Context

Implications Pressure to increase productivity will

continue. Pressure to reduce production costs

will continue.

Context

Results More consolidations, downsizing,

outsourcing. Productivity will be a critical factor; can

be enhanced with continuing education, training.

Reducing turnover, cutting fixed costs also helpful in increasing productivity.

Current Structure

Population, income, employmentAmong other Tennessee workforce areas, per capita income is one of lowest and unemployment rate one of the highest.

Growth of population and labor force flat, lag state growth rate.

Personal income growth also lags state growth rate.

Current Structure

Industrial DistributionMuch more dependent on manufacturing as a source of employment and payroll than the rest of the state, about twice as important as for Tennessee.

Current Structure

Educational AttainmentBachelor’s degree or higher –

Tennessee: 19.6%NW Tennessee: 7.6% - 12.0%

Less than high school –Tennessee: 24.1%NW Tennessee: 25.4% - 36.1%

Current Employment Status

2,350

2,400

2,450

2,500

2,550

2,600

2,650

2,700

Tho

usan

ds

Tennessee

Current Employment Trends

2,350

2,400

2,450

2,500

2,550

2,600

2,650

2,700

Tho

usan

ds

66.0

67.0

68.0

69.0

70.0

71.0

72.0

73.0

74.0

75.0

76.0

Tennessee NW Counties

Current Employment Trends

•Impacts on payroll employment vary by region of state.

•Tennessee down 2.5% from peak in Jan 2000 to June 2003.

•Northwest counties down 8.2% from Jan 2000 peak.

Strengths and Weaknesses

Weaknesses•Lack of industrial diversity

•Not enough resources for post-secondary education

•Low educational attainment

•Weak regional cooperation

Strengths and Weaknesses

Workforce Professionals

•Weak regional cooperation

Figure 25. Is the Existing Level of Workforce Education a Barrier to Employment?

0 10 20 30 40 50 60

Major Barrier

Moderate Barrier

Not a Barrier

Percent of Professional Opinion

Strengths and Weaknesses

Strengths

•Strong work ethic

•Location

There are a lot of people here who do care about other people. It is a strong community in that respect. I think we have some positives; we just need to sell those positives to other people.

Preparedness to GrowEmployers’ Viewpoint

Skills in new hiresReading –Not a problem: 34%Moderate problem: 18%High to critical problem: 6%

Math –Not a problem: 26%Moderate problem: 28%High to critical problem: 10%

Preparedness to GrowEmployers’ Viewpoint

Skills in new hiresWriting –Not a problem: 18%Moderate problem: 33%High to critical problem: 9%

Soft Skills –Not a problem: 10%Moderate problem: 31%High to critical problem: 24%

Preparedness to GrowEmployers’ Viewpoint

Soft Skills

Right now, in banking, a high school degree is not enough for the technical skills they need, communication skills, people skills, soft skills are not there...just things that a lot of us who are older learned at home, such as people skills, communication skills, how to dress.

Employers’ View

Figure 21. How Well Would You Say the Quality of the NW Tennessee Labor Supply Meets Your Current Needs?

010

203040

5060

7080

Extremely well Very well Acceptably well Not very well Not at all

Pe

rce

nt

All employers Small employers Large employers

Employers’ View

Registered NurseLicensed Practical NurseTruck DriverMaintenance WorkerSales RepresentativeTellerCustomer Service Representative

Occupations in shortest supply:Receptionist/ClerkMachinistTool and Die MakerComputer OperatorLaborerWelder/Fabricator

Employers’ ViewpointEducation Preferences for Occupations in Shortest Supply

0.00% 10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Less than highschool

High school

Some college

Bachelor's degree

Small employers Large employers

Employers’ ViewpointEducation Preferences for Occupations in Shortest Supply

0.00% 10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Less than highschool

High school

Some college

Bachelor's degree

Small employers Large employers

Employers’ Viewpoint

For occupations in shortest supply:

Just 13.4% of jobs could be filled by workers with less than high school diploma.

These workers comprise 31.1% of the Northwest Tennessee workforce.

Employers’ Viewpoint

For occupations in shortest supply:

17.6% of jobs will be filled by workers with at least a Bachelor’s degree (23.2% for large employers).

These workers comprise 10.1% of the Northwest Tennessee workforce.

Employers’ View - Growth

Table 40. Desired Level of Employment 10 Years from Now

Level of Employment Percent

Fewer Employees 13.1

About the Same Number 18.3

Up to 50 Percent More 42.3

51 Percent to 100 Percent More 17.5

More Than 100 Percent More 8.8

Employers’ View – Hiring Needs

Demand for workers with less than high school education will drop sharply during the next ten years.

Demand for workers with a high school degree will not grow as quickly as for those with more education and training.

Employers’ View - Constraints

Figure 23. Most Important Constraints on Growth During the Next 10 Years

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Other

Availability of financial capital for expansion

Controlling non-labor costs

Improving productivity

Finding new markets

Workers’ compensation costs

Healthcare costs

Large employers All employers Small employers

Employers’ View - Constraints

Table 31. To What Extent Do Rising Health Care Insurance Costs Limit the Number of Employees Your Company Can Hire?

Severity of Problem (percent of employers)

Not a Problem Low Medium High Critical Problem

All Employers 16.79 13.74 20.61 25.96 22.9 Small Employers 16.67 16.67 24.36 17.95 24.36 Large Employers 16.98 9.43 15.09 37.73 20.75

Employers’ Concerns

Generally optimistic about long-run future.

Concerned about workers’ compensation costs.

Want to find a way to keep more young people in the area.

Concerned about costs of health care.

Preparedness to Grow

Uncontrollable factors

Growth

Controllable factors

Markets trends

Competition

Quality of human resources

Infrastructure

Cultural and recreational amenities

Are We Prepared?Context for Northwest Tennessee

Future jobs will require broader skills Mathematics Communication Computer skills Analytical reasoning Creativity

Are We Prepared?Context for Northwest Tennessee

A broadly skilled workforce is more able to adapt to changing economic conditions. Very difficult to identify winners with any

degree of certainty. Workers with broad skills have better

chance of success. Workforce better prepared to take

advantage of opportunities that arise.

Final Thoughts

Growth is what happens to us.

Economic development is nurtured from within.

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