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34th Annual Survey of Corporate Executives Commentary: Corporate Survey Respondents Give Training Programs Short Shrift

Considering the importance of access to skilled labor at a reasonable cost, why don’t corporate executives give more importance to training and technical programs?

Q1 2020
It comes as no surprise that survey responders cited availability of skilled labor and labor costs as two of the most important site selection factors facing companies today. But what is more surprising is the ranking for training programs/technical schools, coming in well behind at No. 19.

Given historically low unemployment, we all know there are few people on the sidelines waiting for a job offer. As a result, companies are forced to hire from the ranks of the “already-employed,” in turn bidding up wages to entice folks to leave good jobs for a better one. That’s the direct tradeoff between availability and costs many companies face.

Alternatively, expanding companies can hire from the ranks of the underemployed (e.g., folks working in retail or food service). Or they can hire workers re-tooling from other industries. Or they can hire younger workers now entering the workforce. These are oftentimes untapped sources of labor. The common denominator across those pools of workers, however, is the critical importance of strong state, regional, and local training and education programs.

So, if companies value access to skilled workers while remaining sensitive to rising labor costs, why aren’t they flocking to every local technical college or career high school to find that talent? Why isn’t training programs/technical schools ranked No. 1?

Clearly, there are many reasons why that’s not the case — far too many to list. But I do think one, simple way to get more locationally active companies focused on training resources is to ensure that local industry in addition to economic development and training partners are the ones telling that training story. In our experience, that training pitch resonates much more strongly when it comes from the folks who are actually using those training resources and can speak firsthand to their value.

If local employers are engaged with training and education, then it’s more likely that future employers will be engaged with training and education. And, come next year, we’ll (hopefully) see training programs rise up the rankings.

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