‘How Do We Bring More People to Connecticut?’
Connecticut employers say the state’s growing labor shortage is the greatest threat to economic growth, with time running out to address the crisis.
The 2023 Survey of Connecticut Businesses, produced by CBIA and Marcum LLP, shows 81% of companies found it difficult to find and retain employees—essentially unchanged from last year’s survey.
And the percentage of top executives who say the lack of skilled job applicants is the greatest obstacle to growth increased seven points from last year to 46%.
“The skilled labor shortage is 100% our biggest challenge, without a doubt,” O&G Industries vice president Christina Oneglia Rossi told CBIA’s Sept. 14 The Connecticut Economy conference, where the survey was released.
“We have a lack of skilled labor entering the trades, and it’s also very challenging to attract and retain field personnel, management, as well as corporate jobs—it’s across the board.”
Rossi joined Cadenza Innovations CEO Christina Lampe-Onnerud and McDowell Communications Group president Duby McDowell for a panel discussion moderated by Marcum’s Michael Brooder at the Hartford conference.
Rossi said the construction company is collaborating with educational institutions, state agencies, and trade unions on a variety of workforce development initiatives.
“We’re working very hard with the technical schools to align curriculums, and they’ve been very receptive,” she said.
“The Department of Labor is also trying to lower the age that high school kids can get into apprenticeship programs, so that we can do two to three days in the shop and two to three days shadowing on a construction site.”
She added that the company is also working to shift perceptions about the skilled trades.
“We need to destigmatize careers in the trades,” she said. “A four-year degree may not be right for everyone, it is costly.
“But the labor shortage is our biggest problem. And we really are digging deep to start solving some of these issues.”
Lampe-Onnerud said Connecticut’s manufacturing sector—where the average annual compensation is $101,136—is also battling outdated perceptions.
“These are cool jobs,” she said. “This is not our grandfathers’ type of manufacturing. These are pristine, gleaming floors, no dust, Six Sigma principles, robotics installations.
“A whole new era is beginning and we can do it here. But we have to talk about it. We have to highlight these stories.”
In earlier remarks, CBIA president and CEO Chris DiPentima noted that while Connecticut has 91,000 job openings—30% more than before the pandemic—the labor force has declined by 41,100 people over the same period.
“Lawmakers must aggressively pursue policies that allow us to better overcome the main factors undermining our economy: the labor shortage, the state’s high cost of living, and the high cost of doing business,” DiPentima said.
“As employers, you can be forgiven if you are losing patience. And judging by the responses to the survey, many of you are.”
DiPentima told the audience of over 350 business leaders that turnover in Connecticut workplaces is among the lowest in the country, with the voluntary quits and total separations rates eighth best of all states.
“Employers are playing their part,” he said. “You are prioritizing investments in employee recruiting, training, and retention.
“More and more of you are investing in childcare and providing flexible work schedules, expanded paid time off policies, employee engagement initiatives, tuition reimbursement, sign-on bonuses, and promoting apprenticeships and internships.
“And average annual salaries jumped 4.4% in Connecticut last year, the second largest increase over the last decade, with workers earning an average $81,235, fifth highest in the country.”
Brooder told the audience 91% of employers reported that the cost of doing business in Connecticut was rising, with labor costs and high state taxes the leading contributors.
“With the increase in wages, and retaining and attracting talent, workforce is a big cost right now,” Rossi said.
“And if we’re not seeing the volume of work for construction, that is concerning because while we can absorb some of that, we can’t sustain it for the long term.”
McDowell added that cost pressures on sectors like manufacturing and construction have a ripple effect on companies in the service and professional industries.
“As costs rise, a company might say, ‘OK, we don’t have extra dollars for marketing or communications, that kind of thing,'” she said.
“That has an impact on my company. And I’m sure the lawyers, the accountants out there feel the same way.”
Lampe-Onnerud said Connecticut’s regulatory compliance burden also contributed to the high cost of business.
“Connecticut being a small state, a friendly state—where in principle we can meet and decide—why can’t we lower the cost of doing business?” she asked.
“There are lots of standards out there. And it’s very complicated to navigate, we could simplify it.
“Don’t tell the business community what we have to do or how we do it, just give us the goal: ‘Here is the outcome we’re looking for.’ We are good at finding ways.”
Quality of Life
The panelists agreed with the survey’s findings that quality of life was Connecticut’s greatest competitive business advantage.
“The quality of life here is is second to none, I really do feel that and believe that,” Rossi said.
“One of the best parts of Connecticut is that it is a small state. And that it’s one degree of separation pretty much to anyone you need to get to.
“So if your business is in crisis, or if you have a problem, it is so easy to get to someone who can help understand your issue, who can point you in the right direction to get up and running again.”
McDowell referenced the state’s improved fiscal health, adding “you can’t underestimate what a boost that is for morale in this state.”
“It was a very difficult time when we felt very weighed down by that and just knowing that we’re not carrying that burden anymore, I think is, is a real positive,” she said.
However, the panelists echoed the frustrations expressed by numerous survey respondents that policymakers have not leveraged Connecticut’s fiscal position to lower taxes for businesses, particularly small employers.
Costly Missed Opportunties
In his remarks, DiPentima cited an economic report released earlier in the month by the progressive nonprofit group Connecticut Voices for Children that “echoes the warnings CBIA has sounded for some time now about the economic threat Connecticut faces.”
According to that report, Connecticut’s job growth trails U.S. growth by more than three percentage points since mid-2020, costing the state an additional 53,000 jobs.
Connecticut’s economic growth also trailed the national economy over that period by 7.5 percentage points, lowering GDP by an estimated $22 billion.
“Connecticut cannot afford to keep missing opportunities to address these challenges,” DiPentima said.
“Our state has incredible potential. What we need now—more than ever—is the will and commitment to unlock that potential.”
Brooder said the CBIA/Marcum survey “clearly showed that business leaders want the General Assembly to focus on tax relief, spending cuts, workforce development, to grow the economy.”
“We have more jobs available than we have people,” he said. “How do we improve that? How do we get people to move to Connecticut?”
Based on this year’s survey responses, making Connecticut more affordable for residents and employers is critical for the state’s economic prospects.
When asked to identify the policy priorities that will have the greatest impact on changing the narrative and reversing Connecticut’s decade-plus of population declines, 54% of business leaders identified income tax cuts.
Other responses included property tax reform, access to quality affordable healthcare, more housing options, increased education funding, and occupational licensing reform.
“While lawmakers approved major personal income tax relief measures this year, more still needs to be done,” DiPentima said.
“Our tax policies should attract new residents and businesses, not be a deterrent.”
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