Persistent Skills Gap Hindering Economic Recovery in Cities; Promising Models Found in Norfolk, VA, Charlotte, NC

Amid a national economic recovery, city officials report a recent and persistent skills gap that may signal structural challenges and present serious barriers to sustained growth for metros. Nearly nine in 10 city officials (88 percent) note that workforce alignment has not improved over the past year, according to a recent survey on city fiscal conditions from the National League of Cities (NLC). Meanwhile, new business growth, as represented by indicators of entrepreneurial activity and new business permits, is showing signs of improvement.

Unlike most other economic indicators, city officials report that workforce skills are not keeping pace with employer demand and more than half of city officials (53 percent) say that current local workforce skills are posing a problem for the economic health of their communities. Moreover, 82 percent of city officials responded that the percentage of the population with a post-secondary degree has not increased over the past year.

Local officials have become deeply involved in discussions on how to better train workers for the jobs likely to emerge within their cities and towns, said Neil Bomberg, program director for Human Development and Public Safety at NLC. He added that local officials can play an active role in engagement between academia and business leaders to determine what training is necessary to fill the gaps. While the findings from the survey are not surprising to Bomberg, he said it is difficult to determine the extent to which employers and academia are working together to bridge the skills gap.

”We know employers are unable to fill certain positions, but are they willing to make the investments necessary to obtain the employees they need?“ Bomberg questioned. Complicating matters is the fact that the skills gap in cities is not limited to technical knowledge. Community leaders often echo the complaints of local businesses that workers also lack ”soft skills,“ such as critical thinking, communication, and the ability to work as part of a team.

This year's NLC survey included a new series of questions asking city officials about policy areas that they anticipate focusing on in 2013. Recruitment and business attraction topped the list with 75 percent of city officials reporting plans to increase their focus in this area. More than half (61 percent) plan to increase their focus toward small business and entrepreneur support. Surprisingly, despite the skills gap reported in so many cities, only 34 percent of officials said they plan to increase their focus on workforce and job training. Bomberg said there needs to be an equal focus on connecting job training and skills development so that communities can sustain employers with respect to the type of jobs that can be filled.

Replicating Promising Models to Diminish the Skills Gap

A skills gap often suggests a much more complex set of trends relating to a host of labor-related factors, including a shrinking labor force, long term unemployment, underemployment and divergent hiring patterns, as noted in a recent NLC blog post. A number of cities are actively and successfully aligning their policies to address these issues. Examples include Norfolk, VA, and Charlotte, NC, In Norfolk, Bomberg pointed to a training program for highly skilled welders, which was identified by local leaders as a profession with high-growth opportunity and a short supply of workers. In this case, business leaders and academia worked together to cultivate a pipeline of qualified workers for the area's naval shipyard.

The U.S. Conference of Mayors last October highlighted a public-private partnership between the city of Charlotte, Siemens Industry, Piedmont Community College and Charlotte Works as a best practice for workforce development. A planned expansion at Siemens required an additional 750 workers in just two years. In response, a European-style apprenticeship program was implemented for high school juniors and seniors, which includes a four-year training program, associate's degree and certification.

Bomberg identified several other cities with promising models including in St. Paul, MN, Louisville, KY, Eugene and Portland, OR, and Seattle, WA.

Read the NLC 2013 Local Economic Conditions Survey.