Meeting the demand for skilled workers
By Amy Smolik
For the Sioux Falls Area Chamber of Commerce
An aging workforce. An unemployment rate that continues to hover below 3 percent. A perception that a skilled trade job doesn't pay good wages. Growing more jobs than there are people to fill them.
If you're an employer looking to fill positions, this can sound daunting.
While Sioux Falls is excelling at growing jobs faster than training people, business owners and managers aren't idly standing by to fill skilled jobs. Due to the efforts of technical educators, the business community and the infusion of public and private dollars, South Dakota is poised to grow its workforce to continue to meet the ever-changing demands.
In the next decade, skilled trade jobs are expected to increase faster than the growth of national average of all jobs, which is 11 percent. However, the retirement of aging workers and the ever-growing demand for workers, could cause serious skilled-labor shortages in the U.S. By 2020, the nation could face a shortfall of around 875,000 machinists, welders, industrial-machinery operators, and other highly skilled manufacturing professionals, according to the U.S. Bureau of Labor Statistics and BCG estimates. Employers need to actively recruit the next generation of skilled workers. Here's a few ways they're doing that in the Sioux Falls area:
Sioux Falls is home to Southeast Tech, one of the state's four technical institutes. With more than 50 choices in high-demand fields, Southeast Tech offers real-world experience with evening, online and hybrid programs that allow students to earn an associate's degree, diploma or certificate.
The Build Dakota Scholarship Fund was founded to provide full-ride scholarships to students at South Dakota tech schools in high-need careers like welding, engineering and manufacturing. Since the implementation of Build Dakota in 2014, South Dakota's technical schools have seen increased enrollment of 3 percent, contrary to a nationwide shrinkage of 11 percent. Southeast Tech's enrollment remained flat for the 2018-19 year.
"We don't have facilities problems – we can't produce enough human capital to meet the needs of our community. We can't keep up with area employers as far as workforce needs," said Southeast Tech's Chellee Unruh.
Unruh is a poster child for technical education. She earned her associate's degree from Southeast Tech and then went on to earn bachelor's and master's degrees – all of which she accomplished in five years. Today Unruh is the Southeast Tech Foundation Director, raising funds for her first alma mater and telling the story of tech ed success.
It's really all about setting students up for success, Unruh said. Build Dakota allows students to earn a degree and make a living wage with no debt. It's opened students' eyes and parents' eyes, she said. While this opportunity has helped change the perception about a two-year degree, Unruh thinks it will take more time for people to understand the opportunities available.
"It's going to take more than four years of a scholarship program to change decades of perception. But it is changing," Unruh said. "There's still a long way to go. We can sell the math to parents that you really can go anywhere with a tech ed degree."
Many of Southeast Tech's graduates choose to stay in Sioux Falls – approximately 75 percent. The Sioux Falls community coupled with employers ready to hire make it a great mix.
One of the ways Southeast Tech tries to remain nimble is by growing programs that meet growing workforce needs – and producing new members of the workforce in 24 months or less. Unruh is currently leading a capital campaign to start a veterinary technician program, a $1.7 million investment that will make it South Dakota's first vet tech program.
Students who complete this program will have career opportunities across the state – from traditional veterinarian's clinics to agricultural production settings to biomedical research, one of the growing workforce needs thanks in part to the expansion of the USD Discovery District, located just north of Southeast Tech. According to the National Bureau of Labor Statistics, the number of employees needed in this field will grow by nearly 19 percent in 2024, compared to 2014; in South Dakota that growth is 15 percent for the same time period. This is a broad-based program that is intended to be nationally accredited by the American Veterinary Medical Association and qualify students to take the Veterinary Technician National Exam.
On-the-job training and promotions from within have benefited several Sioux Falls area businesses. Southeast Tech has the No. 4 automotive program in the nation. While that serves as a feeder for Sioux Falls Ford Lincoln, General Manager Ed Bloom said they also utilize certificate programs and training within the dealership to meet their ongoing workforce needs.
"The automotive manufacturers help us keep up with training and we always make the necessary changes to add equipment whenever needed," Bloom said. "We grow people within, starting in our Quick Lane and we also find future technicians at trade schools throughout the country."
Like many in the construction industry, Journey Group battles the misconception that the construction trades are just swinging hammers – and the challenge of more jobs than people to fill them, said Jolene Smith, HR Director.
"We look in multiple places to fill positions – employee referral programs, apprenticeships, internships," Smith said. "We do a lot of promoting from within. A laborer may become a carpenter helper, who then might become a carpenter. There are lots of skills learned on the job. Or we'll hire entry-level welder and then help them become certified."
Journey Group also imparts to their employees the importance of the work being done to improve their community – for example, they have carpenters who are building a hospital and creating a space to save lives. They have found sharing a project's bigger picture can help interest people in the construction industry, Smith said, which can help attract more students to the career and wage opportunities.
Build Dakota was established to assist in overcoming South Dakota's workforce shortage. An initial $50 million investment – $25 million from philanthropist T. Denny Sanford that was matched by the state of South Dakota – continues to be supported by the business community. The program was funded for five years; the fifth and final year begins January 2019. Initially, each of South Dakota's four technical institutes were given 300 scholarships to award annually. An endowment was created from the funds, the interest of which will continue to allow for scholarships.
How it works:
Students receive a Build Dakota Scholarship, which pays for their degree in high-need technical areas – a value of $20,000 to $25,0000. Students then commit to working in South Dakota within their specific field of study for three years post-graduation. The 2019-20 eligible programs feature diploma and AAS degrees, taking one to two years to complete. They fall under nine key areas: agriculture, automotive, building trades/construction, energy technicians, engineering technicians, healthcare, information technology/computer information systems, precision manufacturing and welding.
Journey Group was one of 10 companies that participated in a unique partnership with Southeast Tech in the summer of 2018, pairing high school students with contractors. It's an idea that came out of the Associated General Contractors (AGC) of South Dakota to develop the workforce at a much earlier age.
"There is more to construction than hammering a nail. There are really strong, solid careers and decent paying jobs in construction," Smith said.
Students spent the mornings in labs at Southeast Tech and their afternoons with the contractor. It was an opportunity for students to "learn while they earn" and they left the program with five credits.
"We saw participating in this program as more of an opportunity to contribute to industry as a whole," she said. "We wanted to make sure the student had a wide range of experiences that allowed them to observe construction."
Their student rotated through each of three divisions at Journey Group. The program was an opportunity for employers to realize the potential that's out there, Smith said. In 2019, the original 10 students will be invited back to work with their same contractors with a goal of growing the program. And because of the success of this program, Southeast Tech is looking at implementing it in other construction fields like engineering.
Partnerships are the name of the game when it comes to workforce – and one of the reasons Build Dakota has been successful. Since its inception in 2014, more than 180 businesses have paid a portion of students' program expenses and expanded their financial support tenfold – more than $1.4 million in its first four years. Sioux Falls Ford Lincoln is one of the companies that support Build Dakota scholarships.
"Build Dakota is a great program for young people to get the training and skills they need to succeed in our business. We've sponsored several full-time technicians and we are currently sponsoring two to three students in the program," Bloom said.
Build Dakota provided incentives for students seeking careers or continuing education in high-demand fields across the state. The initial funding, $50 million, was for five years of the program – and the fifth year starts in 2019. This means that the future of the program may look different, but its success shows that there is a need for this type of program. More details will be determined in 2019, Unruh said.
"When Build Dakota started, we wanted to make an impact. Instead of talking about our workforce challenge, this was an action. We wanted industries to step up and partner," Unruh said. "I don't think they could have anticipated what Build Dakota would do and become. I believe it has exceeded expectations and performance. It has been nationally recognized for highlighting skilled trades. There is a desire to keep it continuing in some form.
Looking to the Future
As the workforce changes, programs change, Unruh said. For example, in the 1990s, the business program was Southeast Tech's largest program. Today, as jobs have changed, fewer students are enrolled in the business program. But – because Sioux Falls continues to grow in healthcare services, there has been an increase in surgical technicians, LPNs, and invasive cardiovascular technology.
"We do have the ability to be nimble and follow the workforce – and continue to lead the region for training for those jobs," Unruh said.
Not everyone is ready for a four-year program – and not every career path can start at a technical institute, Unruh said. That's where collaboration comes in, she said. Collaboration comes in all different layers, with multiple people, organizations coming together, Unruh said. This includes the city, industry partners, technical education, four-year universities, social service programs, nonprofits, high schools and more – all coming together and providing opportunities for students to map out their path.
"We're looking to become a stronger partner with the region. We want the workforce of the Sioux Falls region to stay here and not have to leave to be trained," Unruh said.
"A rising tide lifts all ships."