“If we look at what’s happening to business, what are the forces that impact business on a global basis, we see that the workforce is undergoing a fundamental change,” Ron Lehman of the Texas Workforce Commission told the Waxahachie Chamber of Commerce on Thursday.
“One of the things that’s really, really important that our business folks as well as our community leaders recognize very early, is that we are in a global economy,” Lehman said. “As much as we don’t like it, or wish we could change it in some ways, the rest of the world has seen the American dream, and they really want to participate in it.”
Lehman, a former executive at IBM, serves as the commissioner representing employers, and was appointed by then-Gov. George Bush in 1998, serving in his position ever since.
There are 2.4 million businesses in the state of Texas, Lehman said, adding that while about “4 or 5,000” start up every month, 3,500 cease operations. Of the 2.4 million businesses, 580,000 are incorporated, and 404,683 have employees, the commissioner added.
However, regardless of their size or number, Texas’ businesses face significant and growing challenges, Lehman noted.
Some of these challenges stem from the major demographic trends in the country, which include an aging population (including the “baby boomer” generation rapidly approaching retirement age), a slower population growth rate, increased immigration, an increase in the non-Anglo population, an increase in cultural diversity, smaller households, fewer traditional families, and migration flows from the north and eastern areas of the country to the south and west.
Texas faces specific challenges when it comes to age issues though, Lehman said.
The state’s average age is younger than the national average, with its “baby bulge” hitting about 2015. However, this late-hitting bulge has its own implications.
Additional skilled workers will be needed to replace those that reach retirement age (as far as Social Security is concerned), but more workers will still be needed before that time. By 2010, the economy will see a shortfall of 5.3 million skilled workers, Lehman said, adding that the number will swell to 14 million in 2020 if the current trends continue.
“The challenge for business is the challenge for parents and also the challenge for workers is not how are we going to ensure we have adequate supplies of workers, but how are we going to ensure we have adequate supplies of skilled workers,” Lehman said.
“Texas is facing this challenge along with all the other states … but what makes Texas unique is how we’re responding to that,” he said.
According to Lehman, the state “is a national leader in re-shaping its workforce development system” and has become the model for other states, which have entered into contracts with the state to help overhaul their systems.
“We took 28 workforce programs across 10 agencies, smashed ’em all together, put 28 workforce development boards — that are all volunteer — to guide and lead the priorities and strategies of those boards, and set up one-stop workforce centers that serve as one-stop centers for both workers and employers,” Lehman told the chamber members, adding that the TWC serves about 1.8 million people a year, including 183,000 businesses.
The system invests about $1 billion a year in its programs, with a significant amount of that money going to providing childcare for working parents, Lehman said, explaining that such programs are helping to reduce the state’s welfare rolls.
When he started work with the commission, there were more than 200,000 Texas families on welfare, Lehman said. Today, that number has dropped to 17,000.
“Welfare in Texas is quickly headed toward extinction, but more importantly, the workforce system we’ve built focuses on anybody and everybody,” the commissioner said.
While the system used to be focused on finding employers for workers on its rolls, the TWC has changed its focus to understanding the challenges businesses face and then trying to help industry solve them.
“By working together, we are building a talent supply chain,” Lehman said.
To help build that chain, the TWC works with businesses and community colleges to promote skill development and provide customized training for businesses, using money from skill development funds to “help young people understand opportunities of future and take courses to prepare them for (them),” Lehman said.
“All too often, our young people choose the courses they take or go to college and pursue a major for which there is very little demand out in the real world,” he said.
However, the commission does not solely focus upon creating the next generation of workers for industry.
The commission also works to help maintain the current civilian workforce, which has reached an all-time high of 11.5 million in the state of Texas but has a 40 percent annual turnover rate with 4.7 million new hires every year, Lehman said.
“What the business message here has to be is ‘most of tomorrow’s workers are in our workforce now,” he said. “Remember we’ve got a huge growth, but some of them won’t be ready for the workforce until 8 or 10 or 12 years from now.”
Due to that reality, managers will have to “optimize” the workforce they have now, and in that scenario, the retention of employees becomes very important, he added, calling the relationship between supervisors and employees “critical.”
And that relationship relies upon what many call “soft skills,” the commissioner says.
“Now in the education system, we call that soft skills [and say] ‘we need to teach them soft skills’,” Lehman says. “In my vernacular, if it gets you fired, it’s not very soft.
“Why is that we have so many people that lose their jobs because for attitudinal things? What is wrong with our systems of how we raise young people, and how we communicate standards and expectations, and how we reward people if they come into the workplace and those attitudinal things --attendance, punctuality, teamwork, and communication- becomes their downfall?” Lehman pondered aloud.
“Supervisors must recognize, communicate and reward [those skills], and during hiring, supervisors should be concerned with “fit” and not just the skill,” he said. Instead, employers should ask “are these individuals doing the kind of things that give us the indication that they will fit into our organization?” the commissioner said, pointing out that if those employees do not fit, that business will expend a lot of resources -including time and money- into an effort that will ultimately fail.
However, the impetus is not only on employers, Lehman noted.
“I’ve been talking to the education community a lot about ‘let’s not talk about soft skills, let’s talk about how important it is to focus on those kind of things and make sure our future workforce as well as our current workforce understands those expectations.”
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