John Gallagher

Detroit Free Press

As baby boomers retire in ever increasing numbers, employers throughout Michigan are facing a growing problem finding workers with the education, training and skills needed to fill their jobs.

Industries in Michigan from construction to health care are facing shortages of competent workers. Those shortages are growing more acute as Michigan's unemployment rate continues to decline toward the 5% mark and the pool of available talent shrinks.

Shortages of qualified workers — known as the "skills gap" — presents a drag on Michigan's future economic growth. One area where it is felt most acutely is in the state's construction industry, which is facing shortages of carpenters, electricians and other skilled trades. For an industry still recovering from a catastrophic decline during the Great Recession, this skills gap isn't some distant possibility. It's a here-and-now problem.

“We’re already in trouble. It’s just going to keep magnifying itself. We’re going to be in real trouble,” said Kevin Koehler, president of the trade group Construction Association of Michigan.

And if pipe fitters and welders are in short supply, employers in other fields are also on the lookout for more registered nurses, health care social workers, truck drivers and engineers of all types.

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Stephanie Comai, director of the state's Talent Investment Agency, which directs the initiatives of the state’s workforce development programs, warns that the skills gap presents "a significant challenge for the state." She said that Michigan's educational system is partly to blame.

"One of the things that we find is that in high school there’s not a lot of career counseling," she said. As a result, young people entering the workforce find that "it’s just hard to figure out what the opportunities are out there. ... Helping parents really understand the opportunities they can introduce to their kids is really important."

The State of Michigan's Labor Market Information office keeps track of the occupations that will be most in demand through 2022. And of the top 50 occupational openings in Michigan in coming years, 64% will require candidates to have a bachelor's degree or higher. But only about 26% of Michigan residents have attained that much education.

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When the jobs that need an associate's degree are added in, the percentage requiring at least some college rises to at least 76% of all the openings.

In the fourth quarter of 2015, there were 23,010 online job advertisements for openings in the City of Detroit. About 44% of those openings required a bachelor's degree. But only 21.6% of Wayne County residents 25 years or older, and only 13.1% of Detroit residents, have at least a bachelor's degree.

The state's Mitalent.org website lists more than 95,000 current job openings in the state.

Because of the education gap, many of the open jobs remain unfilled.

One issue often cited is the lack of public transportation in metro Detroit, which prevents many low-income city residents from getting to service jobs in the suburbs. Most famously, there was "Walking Man" James Robertson, who gained international fame last year when the Free Press showed how he trekked 21 miles a day from his home in Detroit to and from his job in Oakland County because public transit was too inconvenient.

Meanwhile, a tightening housing market in places like Detroit's greater downtown may eliminate some candidates who would like to live near where they work from applying for those downtown jobs.

More training needed

Economists caution that unless Michigan acts, the skills gap is likely to get worse instead of better, since the level of education and training required by employers gradually rises over time.

Brad Hershbein, an economist with the W.E. Upjohn Institute for Employment Research in Kalamazoo, said that employers typically hire more-educated or better-trained workers during a recession because they have a broader pool of unemployed candidates to choose from. And having hired those better-qualified candidates, companies then tweak the jobs so that those higher skill levels are required in the future, too.

That means a worker who was qualified for a job but is laid off may no longer be qualified for the same position in a year, since the job requirements have been upgraded.

"There’s not going to be a simple silver-bullet type solution," Hershbein said. "Training is going to have to be not just a periodic thing where people do this if they lose their job. It’s going to be something that’s more systematic. Even while you're employed, you’re going to have to have refresher training to keep up to date."

Charles Ballard, a professor of economics at Michigan State University, agrees that skill levels of yesterday or even today may be inadequate for jobs tomorrow.

"The skill requirements keep changing," he said. "The big question is, if the labor market were to continue to tighten, what would happen to the discouraged workers and those who are only marginally attached to the labor force? Would they get jobs, or have their skills deteriorated so much that they just can’t fit into today’s labor force, regardless of macroeconomic conditions?"

In the construction industry, experts say the lack of old-fashioned vocational training programs in high school, or what is now known as career and technical training, is one often-cited reason for the skills gap in the industry.

"Mostly the problem is because we really aren’t educating the parents today on the benefits of skilled trades," where carpenters electricians and others can earn $75,000 to $100,000 a year, Koehler said.

Another problem facing the construction industry is the risk and uncertainty involved in a construction career, where seasonal layoffs remain a part of life. Even skilled trades during a busy season may face a gap between jobs.

"You have to be prepared to be laid off because that’s what happens," said John Rakolta Jr., CEO of the Detroit-based Walbridge construction firm. "You get laid off for a week or two or three or four. It’s a different kind of career and the industry has to get much better with how we deal with that."

That traditional uncertainty in construction has become acute in the past decade. The Great Recession proved devastating to Michigan construction trades, with about half of the jobs in the state's construction industry vaporizing during the recession years.

"A lot of people left the field for good," Koehler said. "Those people aren’t coming back into it now that the business is starting to pick up again. We’re very concerned about today’s skilled trades shortage and tomorrow’s. Three out of four skilled tradesmen will be retiring in the next five to 10 years, and without people coming into the trades we're going to have a major shortage for many years."

Recruiting efforts

A shortage of carpenters, pipe fitters, electricians and other skilled trades means building everything from houses to highways will get built more slowly and at a higher cost. That would create a drag on Michigan's economy.

“As more work flows into Michigan, like the stadium work, potentially the new bridge, a lot of the infrastructure, with the shortage of labor, obviously it affects project time lines, it affects project costs, it affects budgeting for those projects,” Koehler said.

Rakolta echoed those concerns. Like many firms, Walbridge tries to home grow future employees by offering internships, recruiting likely candidates from colleges among students in engineering and related fields.

"Our hope is that we introduce them to the Walbridge culture and when they graduate from college, they come to work for us," he said.

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Detroit-based Quicken Loans follows a similar strategy to find new workers. Each year, Quicken recruits more than 1,000 interns to work in its various units, mostly in its downtown locations, and, like Walbridge, it hopes that exposure to Quicken's culture will entice them to accept permanent jobs. Quicken also offers cash rewards to current staffers for referring candidates who get hired.

"We have all different recruiting programs to try to attract all the brainpower from all over the place to Detroit to join us," said Linglong He, Quicken Loans chief information officer.

"As we've continue to grow, we identify what roles are needed," added Teresa Wynn, senior vice president of Enterprise Services for Quicken Loans. "We focus on the folks that we have and if they don't have the skills coming in the door, how we can gain that skill while they're here during that internship so we can fill some of those roles."

Meanwhile, Comai, of the state's Talent Investment Agency, said the state continues to refine its support for training programs in the state and the usefulness of its Mitalent.org website.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.