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The State of St. Louis Workforce Report 2009 PDF

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2009 The State of St. Louis Workforce Report _- --MERle -_ ~ St. Louis !l1I11 BUIll \ MISSOURI i:a6 Community ~ Caree..r. Center ~ -= College lIMHYTAIICol'TlO f\lTUL.aNT Dtpar1menl &1 Economi~ Dntlopmtnl Foreword Business and Community Leaders, On behalf of St. Louis Community College, the St. Louis Agency on Training and Employment and the St. Louis County Division of Workforce Development, we are pleased to bring to the community the 2009 State of St. Louis Workforce Report. We believe that this report provides critical workforce intelligence that business, economic development and education decision makers will fi nd valuable as they develop strategies to address a changed environment for business development, economic development and talent development for our region. The St. Louis region, like many others across our nation, has been signifi cantly impacted by the rapid deterioration of our economy and labor market. Most experts predict a long and slow recovery unlike typical recoveries from the cyclical recessions we have experienced over the last 30 years. Some predict a national unemployment rate in excess of 10% lasting well into 2011. Our region may be faced with even greater challenges as structural changes in our economy, which have been occurring at a steady pace over the last several years, will almost certainly be accelerated. The rapid and severe decline in manufacturing employment, particularly the 1 automotive industry; the increase in fi nancial services, health care and education; the emerging plant science industry; and the dynamic nature of information technology employment all require new thinking and new strategies by those whose job it is to develop the talent that will drive the region’s post-recovery economy. Missouri is fortunate to have one of the fi nest state labor market information offi ces in the nation. The Missouri Economic Research and Information Center (MERIC), a unit of the Missouri Department of Economic Development worked closely with us to build upon existing labor market data with real time information from regional employers representing a cross section of industry sectors and dislocated workers faced with tremendous challenges in preparing to re-engage in a post-recovery economy. The report is made up of several parts including: the results of a survey of over 1,537 employers focusing on the effects of the recession and plans for a post-recovery period; a survey of 447 dislocated workers asking them about their challenges and plans for re-employment; and case studies of 6 companies providing additional context to the survey data. We believe that, together, these components provide greater focus for evaluating a changed economy and labor market and will contribute to making the critical decisions that may affect our region for years to come. Table of Contents 1. Executive Summary 3 2. St. Louis Economy 4 3. Employer Survey 7 4. Dislocated Worker Survey 14 5. Conclusion 18 2 6. Appendices a. Employer Survey Questions 19 b. Case Studies 21 c. Dislocated Worker Survey Questions 24 d. NAICS Description 27 e. Acknowledgements 30 Executive Summary S ome say that the mark of an individual’s character is determined by how they handle life when faced with adversity. The same can largely be said of a region in terms of how local economic and workforce development communities come together to jointly address a severe economic downturn. The extent to which both communities have developed a learning curve from past major layoff events and economic cycles can determine how nimbly and effectively a region can mitigate the effects of high unemployment and a slow business climate. Learning from the past combined with active efforts to study how current events are different than past downturns are both critical to meet the needs of local businesses and dislocated workers in the St. Louis region. This study was a joint effort by St. Louis Community College, St. Louis Agency on Training and Employment, the St. Louis County Division of Workforce Development and Missouri Economic Research Information Center (MERIC) to profi le the economic landscape of the St. Louis Metro area by examining the business climate, identifying employment trends and patterns of worker dislocation. The results will hopefully provide decision makers the needed guidance to more effectively support and 3 align services for both local business and dislocated workers in the St. Louis region. The fi rst section of the report discusses the fi ndings of the Employer Survey, designed to gain key insights into business conditions, hiring strategies and plans. It offers a glimpse of the challenges employers are facing in this economy, the strategies they are using to adapt and their future plans. The survey was also supplemented with case studies with employers in the region. The second part of this report is the Dislocated Worker Survey. It presents a profi le of these workers, how they are dealing with job losses and the services that can be provided to better assist them. The Employer Survey fi ndings show that: • Business performance in terms of revenue and sales is fl at, as companies diversify focus and re-invent strategies. • Hiring has slowed at the moment. • Employment plans for the future look optimistic, especially in some sectors such as Educational Services, Healthcare and Social Assistance, Retail Trade and Manufacturing. The Dislocated Worker Survey reports: • Most dislocated workers have had steady employment, are disproportionately older than the labor force and have minimal education. • Earning wages to support a family is the primary concern of the dislocated worker. • Dislocated workers are interested in accelerated training programs to help them transition back into the workforce. St. Louis Economy This section provides an overview of the region’s current labor market. St. Louis MSA Counties The bi-state St. Louis MO-IL Metropolitan Statistical Area (MSA) is made up of a total of 16 counties, consisting of Franklin, Jefferson, Lincoln, St. Charles, St. Louis City, St. Louis , Warren and Washington on the Missouri side and Bond, Calhoun, Clinton, Jersey, Macoupin, Madison, Monroe and St. Claire on the Illinois side. It ranks as the 16th largest MSA in the USA (2007). Labor Force Historically, almost 20% of the region’s workforce has been in the age group of 45-54 years. WWWWWWWooooooorrrrrrrkkkkkkkfffffffooooooorrrrrrrccccccceeeeeee(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)BBBBBBByyyyyyy(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)AAAAAAAgggggggeeeeeee(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)GGGGGGGrrrrrrrooooooouuuuuuuppppppp(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)SSSSSSSttttttt.......(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)LLLLLLLooooooouuuuuuuiiiiiiisssssss(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)MMMMMMMSSSSSSSAAAAAAA 4 1111111999999999999995555555(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)2222222000000000000008888888 888888000000......000000%%%%%% 777777000000......000000%%%%%% 111111444444(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)444444444444 666666000000.....000000%%%%%% 5555500000.....00000%%%%% 4444400000.....00000%%%%% 3333300000....00000%%%%% 4444455555(cid:882)(cid:882)(cid:882)(cid:882)(cid:882)5555544444 22220000....0000%%%% 55555555(cid:882)(cid:882)(cid:882)(cid:882)66664444 11110000....0000%%%% 66665555(cid:882)(cid:882)(cid:882)(cid:882)99999999 0000...0000%%%% 111999999555 111999999666 111999999777 111999999888 111999999999 222000000000 222000000111 222000000222 222000000333 222000000444 222000000555 222000000666 222000000777 222000000888 Source: U.S. Census Bureau and the State of Missouri, Local Employment Dynamics program. Labor Force by Age Group St. Louis MSA 2007 Age group Percentage DData from 2007 indicates persons 45 to 54 years 25% iinn the age group of 35 to 44 years 35 to 44 years 23% aannd 45 to 54 years combined 25 to 29 years 10% aacccount for 48% of the labor force 30 to 34 years 10% iinn this region. 55 to 59 years 9% 22 to 24 years 6% 16 to 19 years 6% 20 and 21 years 4% 60 and 61 years 3% 62 to 64 years 3% 65 to 69 years 2% 70 to 74 years 1% 75 years and over 1% Source: American Community Survey Industry Employment and Projections Educational Services, Healthcare and Social Assistance, Retail Trade and Manufacturing are the largest private employing industries in the region. Listed below is employment by industry. NAICS Industry Annual Average P ercen t Of To tal 20 07 E mploy ment 2007 11 Agriculture, forestry, fi shing and hunting, 10,677 0.80% and mining 23 Construction 93,619 6.80% 31-33 Manufacturing 157,040 11.40% 42 Wholesale trade 45,320 3.30% 44-45 Retail trade 163,773 11.90% 5 48-49 Transportation and warehousing, and 78,818 5.70% utilities 51 Information 33,752 2.50% 52-53 Finance and insurance, and real estate 107,920 7.90% and rental and leasing 54 Professional, scientifi c, and management, 132,091 9.60% and administrative and waste management services 61-62 Educational services, and health care and 291,626 21.30% social assistance 71-72 Arts, entertainment, and recreation, and 134,532 9.80% accommodation, and food services 81 Other services, except public administration 69,451 5.10% 92 Public administration 53,220 3.90% Source: MERIC, U.S. Bureau of Labor Statistics. Short term industry projections are developed for the State as well as for the Kansas City and St. Louis metros. For this region, the most representative region for comparison is the St. Louis Region. From 2008 to 2010, this region is projected to have more than 57,000 job openings. Listed below are the top ten fastest growing industry sectors in this region for 2008-2010. NAICS Title 2008 Estimated 2010 Projected Percent Code Employment Employment Change 515000 Broadcasting (except Internet) 2,550 2,640 3.77% 446000 Health and Personal Care Stores 7,650 7,900 3.32% 611000 Educational Services 86,820 89,570 3.17% 623000 Nursing and Residential Care 22,590 23,210 2.72% Facilities 6 452000 General Merchandise Stores 20,590 21,150 2.70% 621000 Ambulatory Health Care Services 40,790 41,730 2.32% 624000 Social Assistance 17,770 18,180 2.31% 492000 Couriers and Messengers 5,160 5,260 1.96% 999200 State Government, Excluding 9,090 9,250 1.77% Education and Hospitals 523000 Securities, Commodity Contracts, 7,760 7,880 1.57% and Other Financial Investments and Related Activities Source: MERIC Short-tem Occupational Projections, MERIC Occupational Employment and Wage Survey and U.S. Bureau of Labor. See Appendix D for detailed NAICS Code description. Historically, Missouri’s unemployment rate has been lower than the national average. However, since early 2009, mirroring the national trend this region also saw a steady decline in employment. In May 2009, non-farm employment in this region was 45,200 lower than at this time last year. The largest losses were in manufacturing (11%). However, growth was observed in educational and health services, adding 3,700 jobs and refl ecting a (1.7%) increase. As of May 2009, the region’s unemployment rate was (9%), a 3.1 percentage point increase from the May 2008 rate of 5.9%. Employer Survey T he intent of this survey was to understand the business climate, market conditions, employment trends and occupation and skills demand from businesses in the St. Louis region. Data for this survey was taken from the MERIC employer database which is comprised of data from InfoUSA – a source that contains up-to-date contact lists of over 400 million companies across the nation. The total population consisted of 117,970 businesses made up of 94,225 businesses from the Missouri counties and 23,745 businesses from the Illinois counties. The total population was then stratifi ed by industry classifi cation or NAICS (North American Industry Classifi cation System) codes. There are 22 such super sector industry classifi cations. A random sample of 1,537 interviews was selected and telephone interviews were conducted with business owners or those in charge of hiring across the region. The quantitative results from this survey were also supplemented with qualitative data from employer case studies. Employer Size In the population, it was noted that the largest group of employers (87%) surveyed comprised of businesses with more than one but less than a hundred employees. 7 Employer Size Percentage Self Employed 3% Less than 100 87% Greater than 100 7% but less than 500 4% 500 or greater Key Findings Business Conditions To assess how businesses are dealing with the slowdown in the economy, employers were asked to rate their current business performance in terms of revenue and sales. A majority of the employers in the St. Louis Region (40%) indicated a positive outlook, twenty nine percent indicated no change and twenty one percent indicated a poor outlook. Response to a follow-up question about the expectations of business performance in the next 12 months was somewhat more encouraging with forty eight percent indicating it as positive, twenty eight percent indicated no change and only thirteen percent stating it as poor. PPeerrffoorrmmaannccee(cid:3)(cid:3)iinn(cid:3)(cid:3)TTeerrmmss(cid:3)(cid:3)ooff(cid:3)(cid:3)RReevveennuuee(cid:3)(cid:3)aanndd(cid:3)(cid:3)SSaalleess(cid:3)(cid:3) 22000099 8 4488%% 4400%% 2299%% 2288%% 2211%% 1133%% 1122%% 99%% Good Stayed(cid:3)the(cid:3)same Poor Refused/(cid:3)Don't(cid:3)know Current Next(cid:3)12(cid:3)months Access to Credit for Business Operations The current fi nancial crisis has created great concern about both the degree to which companies will have problems securing credit and the duration of this situation. While, a little over half of the respondents in this survey (55%) reported that access to credit for business operations had stayed the same, nineteen percent indicated that credit markets had tightened, while twenty three percent were unsure or declined to answer the question. Only four percent of respondents reported that access to credit had increased. Some companies declared no shortage of cash fl ow due to conservative internal fund management or being self funded. AAcccceessss(cid:3)(cid:3)ttoo(cid:3)(cid:3)(cid:3)(cid:3)CCrreeddiitt(cid:3)(cid:3)ffoorr(cid:3)(cid:3)BBuussiinneessss(cid:3)(cid:3)OOppeerraattiioonnss 884400 SSttaayyeedd(cid:3)(cid:3)tthhee(cid:3)(cid:3)ssaammee 5555%%(cid:3)(cid:3)ooff(cid:3)(cid:3)tthhee ttoottaall(cid:3)(cid:3) rreessppoonnsseess DDiidd(cid:3)(cid:3)nnoott(cid:3)(cid:3)kknnooww//(cid:3)(cid:3)RReeffuusseedd(cid:3)(cid:3) 229988 ttoo(cid:3)(cid:3)aannsswweerr DDeeccrreeaasseedd 228866 Increased 64 9 Cost of Benefi ts Employee benefi ts are a signifi cant part of an employer’s budget, accounting for a large portion of total employee compensation. When employers in the St. Louis region were surveyed regarding the cost of benefi ts they offered to their employees, fi fty eight percent of them stated that the cost of benefi ts had increased, thirty two percent said they had decreased and about ten percent had no comments. It is interesting to note that even though majority of the employers stated that costs are rising, surveyed companies also indicated that they would not be reducing the benefi ts they offer new hires when they do begin hiring in order to be competitive and attract and retain the right talent. Barriers to Expanding Employment To better understand how the recent economic downturn was affecting the talent pipeline in the St. Louis region, it was essential to investigate the barriers employers in the region face in acquiring talent. While thirty percent of employers stated that current economic conditions were the biggest barrier to expanding employment, twenty three percent indicated the shortage of skilled workers and training programs in the region was also a barrier.

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