Labor Analysis of the Metro East Region

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Labor Analysis of the Metro East Region

• Project Briefing
• Prepared for
• Metro East Development Partnership
• Funded in part by a grant from the Minnesota
  Department of Trade and Economic Development
• Prepared by
• September 13, 2001

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Introduction

• Objective to understand the real and most
  important aspects of the labor force from the
  site selectors view point of view.
• Present critical conclusions.
• Most important labor-related location criteria.
• Evaluate trends nationally.
• Analyze the Metro East target sectors
• Insurance/Financial Services
• Information Technology (IT)
• Electronics/Medical Instruments
• Advanced Manufacturing
• Present a high tech competitive perspective.
• Make recommendations.

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Critical Conclusions

• Positives
• The Metro East Region has the potential to grow
  into one of the major information technology (IT)
  centers in the country.
• The Twin Cities is an insurance/financial center
  hot bed. The Metro East Region has good
  potential of attracting and growing more than
  your fair share of this business.
• Labor availability in the Metro East Region in
  critical job categories is good to excellent,
  much better than a year ago.
• The overall labor quality in Metro East Region is
  among the best in the nation, especially
  productivity and work attitudes.
• There is a sizable underemployed population in
  the region with a high concentration of tech
  skills.

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Positives (Continued)

• The regions workforce is mobile and skilled. A
  high percentage are willing to take training and
  switch for the right job.
• But, Metro East workers tend to work close to
  home. This means good skills within an easy
  commute.
• The Metro East Region competes well against some
  high tech centers such as Silicon Valley and
  Boston.
• Even with the economic downturn, many target
  companies, particularly IT and electronics, are
  still hiring in the region.
• Metro East a positive relocation destination for
  employees versus other high tech locations.
• The cooperation between businesses and the
  university/college system is good.

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Positives (Continued_

• Twin Cities universities and colleges produce a
  large number of technical graduates, among the
  most of all U.S. metropolitan areas.
• The University of Minnesota (UMN) is highly
  committed to improving the capacity of their
  software and computer science programs.
• All the community colleges are heavily engaged in
  customized training and private sector employers
  are generally satisfied with the performance.
• Educational Quotient scores (EQ) are excellent in
  the Twin Cities.
• Saint Paul Public Schools Education Blueprint
  program has the potential of becoming cutting
  edge regarding the delivery of career oriented
  education.

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Negatives

• Labor shortages loom in the future for select
  insurance/financial center, electronics and IT
  skills. Implication? Labor availability will
  worsen and the area could fall behind other
  competitive centers.
• Engineer availability is only average and
  highly skilled programmers (JAVA) continue to be
  very tough to find.
• Metro East wages are higher or equal to all
  regional competitors, except Chicago.
  Implication? This may hinder some potential
  locations.
• Metro East engineering salaries are among the
  highest in the Midwest.
• Wage increases are occurring in the Metro East
  Region while productivity is slowing. It is
  therefore critical to review wages regularly.

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Negatives

• Insurance/financial services and medical-related
  companies are hiring less and experiencing more
  layoffs than other sectors.
• The higher cost of living and cold weather versus
  some competitors will make it difficult to
  relocate employees.
• The University of Minnesota was left
  approximately 100 million short in the 2001
  budget. Implication? Technical programs may
  suffer.
• The demand for community college and technical
  school graduates far exceeds the supply.
  Implication? Companies will seek graduates
  elsewhere.
• Workforce Investment Board (WIB) clients are
  difficult to place. Implication? Employers may
  tend to give up on this valuable work force
  resource.

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The Resident Survey

• 403 surveys
• 82 are working
• 29.7 have interest in applying for another job.
• 28.3 will take extra training to qualify.
• 38.7 are trained for a different occupation.

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Workers tend to work near home.
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Availability There is a large pool of workers in
target industries.
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Availability Generally better than a year ago,
but still tight in many tech-related areas
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Availability Good in financial services
electronics assembly
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Availability Generally competitive versus other
tech centers
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Wages Generally higher than all competitors
except Chicago Milwaukee
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Wages but, well below tech centers of Silicon
Valley and Boston
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Quality Scores are generally good to
excellent, among the best in the nation.
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Education Training

• Some Strengths
• UMN is committed to improving their software CS
  programs
• An active internship program
• Committed to economic development
• St Thomas IT and mfg. engineering programs are
  highly regarded
• Community colleges provide excellent customized
  training
• Internet based distance learning is very
  prevalent
• EQ scores are excellent.
• School Districts Education Blueprint is
  promising (with career academies)
• WIB progress is promising
• Some Weaknesses
• UMN 100 shortfall may limit tech output
• Internships are going unfilled
• Demand for CC grads outpaces supply
• Blueprint price ( talent ) will be high.
• WIB clients are hard to place WIB boards are too
  big.

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Cost of Living Well below Chicago Denver (also
Silicon Valley Boston)
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Key Recommendations

• The Partnership should assume the leadership role
  regarding all work force related issues.
• Assist in forming a multi-County Workforce
  Development Roundtable for each industry sector.
• Create and fund a Recruitment Consortium, which
  would organize and participate in major job
  fairs.
• Coordinate IT-related training in areas of
  highest demand.
• Focus on continuous IT training that will benefit
  all target sectors.
• View the current economic slowdown as an
  opportunity to upgrade IT workers skill sets.
• Become go-between with business educators with
  internships.

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Key Recommendations (continued)

• Work to reduce the size of the Workforce
  Investment Boards.
• Improve communications between private and public
  sectors involved with career academies and School
  to Work.
• Lobby the Minnesota Legislature regarding renewed
  funding for technology programs at state
  universities.
• Pursue insurance/financial services and IT
  businesses more aggressively.
• Cost and condition analysis reports should be
  developed for these two clusters
• Aggressively pursue national-scope high tech
  projects.
• Market aggressively in the Silicon Valley,
  Boston, Chicago and Denver.
• Develop an incentive program to assist expanding
  companies with relocation.

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For Additional Information, contact

• Mr. Deane C. Foote or Mr. Jack Allston
• Paragon Decision Resources, Inc.
• One Oakbrook Terrace, Suite 208
• Oakbrook Terrace, Illinois 60181
• (630) 889 -7020