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April 2008 — Vol. 86, No. 3

Connecticut’s skilled worker shortage hampering business growth

 

Connecticut businesses are having an increasingly hard time finding and hiring qualified workers. Left unaddressed, that problem will worsen, because of two demographic realities: The huge generation of baby boomers is beginning to retire, while the pool of young workers is shrinking. As a result, the availability of skilled workers in the state has become a critically important economic issue, jeopardizing business growth and productivity.

Those are among the findings of the 2008 Availability of Skilled Workers in Connecticut Survey, conducted last fall by CBIA, Capital Workforce Partners and the United Illuminating Co.

“Connecticut has prided itself on having a highly educated, skilled and talented workforce,” says John Rathgeber, CBIA president and CEO. “If the state is to remain an economic leader, policymakers, educators and the business community must work together to address the issues that are challenging our ability to produce enough skilled workers.”

Most difficult-to-find jobs, in-demand skills

Connecticut businesses are clearly under pressure: 82% of survey respondents said their company has had difficulty in finding qualified workers.

The most difficult types of positions to fill are:

  • Skilled professional/technician (24%)
  • Skilled machinists and other manufacturers (20%)
  • Engineering (9%)
  • Sales (8%)
  • Customer service (5%)

Employee skills most in demand by employers are:

  • Technical, mechanical and manufacturing-related skills (35%)
  • Professional or “soft” skills, such as communication, teamwork and leadership (27%)
  • Overall employability, such as a positive work ethic and punctuality (21%)
  • Advanced computer, scientific, research and development, and engineering skills (13%)

Causes, effects of shortage

Eighty-three percent of respondents blamed the state’s high cost of living
(a reason potential workers sometimes shun the state) for their difficulty in finding workers. Other factors cited included high housing costs (73%); a perception that the state’s educational system does not sufficiently prepare students for the current job market (44%); transportation issues (40%); and the emigration of young, educated workers from the state (38%). An overwhelming 92% said housing affordability is a somewhat or very important factor affecting the ability to attract and keep skilled workers in Connecticut.

Respondents said a tighter labor supply had already affected their businesses’ growth potential (42%), led to higher overtime costs (40%), decreased production capacity (29%), hampered efforts to exploit new market opportunities (29%), and increased the outsourcing of work (28%).

How companies cope

Connecticut companies are using a number of strategies to attract and retain skilled workers, and more than half (55%) are actively encouraging older employees to continue working beyond the traditional retirement age. Incentives most often offered by respondents’ companies include enhanced pension/401(k) benefits (58%), more-competitive health insurance packages (54%), in-house training programs (54%), more-competitive salaries (53%), flexible work schedules (50%), tuition reimbursement (39%), and employee longevity incentives and awards (28%).

What government should do

Businesses said the most important steps needed to address the skilled worker shortage include reforming education to provide more work-ready graduates (56%); offering more (51%) and higher-quality (49%) training programs geared to high-demand occupations in the state; government subsidies and other incentives to attract and keep young, skilled workers in Connecticut (37%); and measures to increase the productivity of the existing workforce (31%).

One key to ensuring Connecticut companies have greater access to skilled workers in the future is to improve the education system. An overwhelming majority (85%) of respondents said improving the K–12 public education system could have a strong or very strong impact on preparing highly skilled, job-ready young adults. Almost all survey participants (95%) said they support greater accountability and higher standards in Connecticut’s public schools.

The importance of a quality education to businesses is clear: More than half of respondents (55%) require at least a high school diploma for the majority of new hires; nearly a fifth (17%) require graduation from a trade or technical school; and 18% require at least a bachelor’s degree.

Connecticut businesses are eager to work with educators and policymakers in addressing the shortage of qualified workers. Businesses recognize the need for improved educational opportunities for students as well as affordable living and housing for the state’s young, educated workers. They are taking measures to remain competitive so that the state’s economy can continue to grow.

This survey was conducted electronically in October 2007. A total of 563 surveys were returned, for a 14% response rate and a margin of error of plus or minus 4%. Supplements of the survey are available by region (Fairfield County and north-central Connecticut), and by industry sectors (manufacturing; finance, insurance and real estate; and hospitality, retail and tourism).