The Indiana Chamber of Commerce recently released its 10th annual Employer Survey, and the responses paint a telling picture of the Hoosier workforce and what’s needed to grow our economy. While the survey results reinforce a growing demand for skilled employees, they also show employers need to be able to increase wages and benefits to secure the workforce they want. Indiana’s policymakers can help employers on both counts by implementing a ‘Good Jobs’ strategy and job quality policies that create a more stable and skilled workforce.
What makes headlines from the survey is the increasing proportion of employers who report difficulty filling their workforce with skilled applicants as a top concern, and the 47% who report unfilled jobs due to a lack of qualified applicants. And those employers have a point – the data show a growing gap between the number of in-demand middle-skill jobs and the percent of Hoosiers who currently have the education and skills attainment to qualify for them. A new report from the Indiana Institute for Working Families breaks down the non-academic barriers (such as childcare, transportation, and stable housing) that prevent would-be adult students from enrolling, persisting, and completing the training needed for these in-demand jobs. To help fill the skills gap, Indiana policymakers should focus on removing these barriers to adult attainment as they overhaul workforce policies this year.
Incumbent worker training should be a natural way to increase the skills of a company’s workforce, but employer responses reveal roadblocks here, too. While nearly half (48%) of Indiana’s employers reported they offer tuition reimbursement programs to upskill their employees, and 40% report partnering with educational institutions to provide it, few indicated that employees successfully take advantage. Disturbingly high percentages of employers claim reasons such as employees’ lack of desire/motivation to participate (60%) and ‘see no personal benefit in advancing their education’ (35%). But taken together, 58% of employers not taking advantage of reimbursement echo non-academic barriers: employees’ inability to afford upfront tuition costs (32%), unaware (13%), lack of childcare (10%) or transportation (3%). Employers should better articulate internal career pathways for promotion and compensation to see more reimbursement program uptake. And policymakers should support their efforts by expanding and better marketing upskilling programs including prior learning assessments, EARN Indiana work-study, and aid for working adults pursuing degrees and credentials.
But beyond skill issues, the Chamber’s survey results about wages give a fuller picture of why Indiana’s employers have a hard time maintaining a skilled workforce. Nearly half (45%) of employer respondents agree or strongly agree they have applicants who are not willing to accept the pay offered, while the reported lack of minimal educational requirements in those cases was only 27%. That means the Chamber’s own survey speaks to more of a ‘wage gap’ than a skills gap! In addition, only 26% of employers responded being very likely or extremely likely to add high-wage jobs in next two years. In fact, employers’ specific comments about their challenge with filling positions included “offering sufficient benefits/ compensation and matching salary expectations.”
The disconnect between employers’ reported difficulty of filling positions and the high percent of applicants turning down low wage offers reflects a policy environment in Indiana that keeps wages and incomes below where employers and employees need them to be. Indiana’s wages increased only one tenth of one percent from 2000-2016, among the bottom ten in the nation. Median household incomes are more than $5,000 below the U.S. average as well, and grew so little in the past year that Indiana slipped from #34 in 2014 to #36 in 2015. U.S. Chamber of Commerce data from its own members shows a great majority of employers support higher wage and job quality policies. Nationwide, 79% of surveyed Chamber members supported raising the minimum wage, 73% supported paid sick leave, and 83% supported paid family leave.
So what can be done? Change often starts at home, and employers can take steps to provide the wages and benefits applicants require to be self-sufficient at home and stable on the job. Companies who have problems with applicants turning down offers should seek to ‘transform today’s bad jobs into tomorrow’s good jobs’ by utilizing MIT research to provide wages, training, and skills that will more effectively grow the workforce of the future. These profitable strategies could help give a competitive edge to employers who feel they’d be putting themselves in a vulnerable position by offering better wages and benefits than they currently do.
Indiana’s legislators should support employers’ efforts by ‘raising the floor’ of wage & job quality policies such as fair scheduling & paid family leave, at the same time they ‘build ladders’ to career pathways with workforce development initiatives. Improving Indiana’s bottom-dwelling work & family policies will not only jibe with employers’ wishes as mentioned above, it will also give business a more stable and self-sufficient workforce and applicant base. This in turn will help reward high-road employers and build a high-wage, high-demand business climate for Indiana.
Indiana should listen to employers when they tell the state they need a skilled, sufficiently-paid workforce, and policymakers need to do their part to boost the economy and take the state’s workforce to the next level. While Indiana received a federal grant to study paid family leave, the Legislative Council declined to assign it as a topic. This is unfortunate, because as our report shows, a state insurance system for paid leave could increase the supply of skilled labor and improve employee retention, morale, and productivity while lifting costs for businesses.
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