Skilled-worker shortage challenging state’s economy

(Sept. 14, 2006) Having endured the challenges of 9/11, skyrocketing health care costs and global competition, Connecticut businesses now face another test — the possibility they will not have enough skilled workers to keep them competitive in the future.

That was one of the recurring themes of CBIA’s “The Connecticut Economy” conference held last week in Rocky Hill. About 300 business leaders heard the good news that Connecticut businesses are growing and succeeding. But they also heard worries about sustaining that success.

Morning keynote speaker Marc Giles, president and CEO of Gerber Scientific Inc., a technology-based manufacturer in South Windsor, said “We’re not finding the talented, skilled people that we need.”

It’s a problem that’s shared by many other Connecticut companies:

• A lack of qualified workers was the most common reason given by companies who had open positions but did not fill them in the past year, according to the 2006 Survey of Connecticut Businesses, conducted by CBIA and Blum Shapiro.

The problem will get worse, said Giles, until the state can increase its supply of affordable housing, better prepare young people for the workforce, and “complete Hartford’s rejuvenation into a vibrant livable city attractive to young professionals.”

Help from Hartford

This year, Gov. M. Jodi Rell and legislative leaders worked together to enact proposals to stimulate job growth and help companies hire skilled, displaced workers. They also approved incentives to encourage the growth of the film and television industry in the state, additional funding for apprenticeship training, and a loan-forgiveness program for engineering students and others in certain doctoral programs.

Increasing the workforce challenge to Connecticut businesses is that 25% of them expect from 6% to 10% of their current workforce to retire within five years, and 13% are bracing for a wave of more than 10% in retirements by that time.

Older demographics

Susan Coleman, Ansley Chair of Finance at the University of Hartford, said Connecticut still has “high levels of human and financial capital,” but confirmed that the state’s demographic trends are troubling. Connecticut has a higher – and growing — percentage of people in the age 45 and up category than the U.S. average, and a lower — and shrinking — percentage of people age 44 or younger.

The combination of fewer young people entering the workforce and more baby boomers retiring in Connecticut is exactly a “perfect storm,” but it could affect the state’s economy.

Many speakers at the conference identified the lack of affordable housing as a major contributor to the state’s changing demographics. They observed that many professionals in the public and private sectors simply can’t afford to live here.
Between 2000 and 2005, said David Fink, policy and communication director of the Partnership for Strong Communities, Connecticut lost 11% of its age 25-34 population, more than anywhere else in the United States.

Housing crunch

He added that 157 of the state’s 169 towns are now unaffordable for many, based on comparing median home sales price and the median income of the community’s residents.

Housing affordability is not just a serious issue for lower-income people in Connecticut, said Fink, it’s now a pressing concern for middle-class workers who are essential to the state’s communities and economy.

The exodus of young people can be seen at the college-selection level, said Judith Greiman, president of the Connecticut Conference of Independent Colleges. Over the last 10 years, she said, Connecticut has exported more college students to other states than has been able to attract to local schools.

She added that the pendulum may be swinging back, slightly, in favor of Connecticut. And Coleman said she tells her students at the university’s Barney School of Business that Connecticut is a great place in which to plant roots and launch a career. n