…competitive long-term employment opportunities and rural quality of life seen as critical pathways to talent and capital attraction

Most of the existing efforts to address rural economic problems are focused on those sectors of the rural economy facing serious challenges, including agriculture, health care, education, public services, and infrastructure. These initiatives are obviously important. They should be maintained and, in many cases, need to be expanded. They are not, however, sufficient alone to the task of constructing a healthy rural economy. Efforts to improve rural capacity and life, must also include a serious commitment to identifying and developing new ways to grow the population and the economy.

With invaluable input from the Wisconsin Counties Association; the Cooperative Network; the Wisconsin Dairy Business Association; Rural Wisconsin Hospital Cooperative; the Rural Wisconsin Partners; the Wisconsin REALTORS Association; Seneca Foods; and others, CWI is working to identify issues and approaches that would effectively and productively focus the Action Accelerator process on realistic, achievable options for achieving specified objectives.  To these ends,  CWI has identified four areas of urgent need and opportunity, including:

• People - A resurgence of communities, economies and prospects can only happen if we can bring people back to rural areas. They won’t come if there aren’t good jobs, interesting communities and broadband.
• Competitive operational capacity access to Broadband - Recognition of the essential importance of broadband access suggests that a new business model for rural broadband is needed - one structured around the broader value of access rather than that based on narrower provider customer head counts.
• Employment-based opportunities -  Almost all rural areas have potential advantages that could serve as the starting point for the development of a jobs-employment driven resurgence. Success depends on linking these advantages to activities that attract investors, customers and workers.
• Enhanced ability to quantify and monetize value - Recent research and trends suggest that its time to take a hard look at whether or not the standard assumptions being used to calculate, the value and identify potential revenue streams.

October 6, 2020

Ms. Margit Kelley
Senior Staff Attorney, Wisconsin Legislative Council
One East Main Street, Suite 401, Madison, WI 53703

Dear Ms. Kelley:

Thank you for offering Competitive Wisconsin, Inc. (CWI) an opportunity to share our extensive research, findings and thoughts with you as you pursue the Wisconsin Legislative Council’s current and timely work on the organization of the state’s workforce development system.

As you may know, CWI has examined Wisconsin’s workforce challenges from a variety of different perspectives over the past ten years, including: [PLEASE NOTE: ITEMS IN RED ARE LINKED TO REFERENCED ITEMS/ISSUES.]

• a 2010 examination of Wisconsin’s comparative economic competitiveness undertaken with Deloitte that flagged workforce supply and skill issues;
• a 2012 CWI-Manpower report that focused more specifically on workforce skill gaps and training needs; and
• 2017 analyses of Wisconsin’s health care and food manufacturing clusters that revealed strategically important workforce challenges and opportunities in both major employment sectors.

We have spent the past two years examining the growing threat to Wisconsin’s economic and social wellbeing now being driven by Wisconsin’s structural workforce shortages; the adverse impacts of a tight job market on state and local tax bases and public services; and an intensified national and global competition for talent. Our findings in these areas are, we believe, relevant to the Wisconsin Legislative Council’s work on the organization of the state’s workforce development system.

We believe, for example, that Wisconsin’s contemporary workforce development efforts must take greater notice of the nature of Wisconsin’s workforce shortages and prioritize as equally important the need to address the causes as well as the symptoms.

The 2013 WDOA projections cited in the Wisconsin Policy Forum 2018 report provide an important example of the need to concentrate on the details. The chart draws attention to the size and projected size of the “working age population,” and visually offers two conclusions. First, the “actual” data indicates a leveling off of the numeric size of the workforce. Second, the “working age population projections” suggests that the WDOA believes that the reduced number of workers will be the norm for some time to come (i.e., 2020 to 2040). Combined, the two conclusions highlight the need for a workforce development strategy dedicated to increasing workforce participation rates and workplace productivity, which in turn underscores the importance of education, training, and workplace learning opportunities.

The details of the actual situation are, unfortunately, less tidy and more threatening to Wisconsin’s wellbeing. When one looks at the composition of the workforce by age, for example, it is clear that the challenge facing the state is not that the size of its workforce is leveling off, but rather that the size of its workforce is eroding structurally. More specifically, while the 20 to 34 “feeder” population has leveled off; the percentage of the workforce over 55 (i.e., potential retirees) is growing and the percentage of 35 to 54 year olds (i.e., the experienced and new management age group) is actually shrinking.

Seen in this light, the 2013 WDOA projections are more appropriately seen as population goals that have to be achieved in offer to avoid significant declines in talent availability and tax base revenues. And, since Wisconsin’s birthrates had been declining for more than 50 years, the only way to reach those goals would be to achieve much higher in-migration rates than Wisconsin had experienced for decades. Forward Analytics research on this topic did not produce encouraging news, finding instead that while there had been a slight increase in in-migration in 2017 and 2018, Wisconsin was running more than 170,000 people short of the WDOA projected growth/need for 2020.

These population and migration dynamics produced historically low unemployment rates; workforce shortages in high demand job categories that regularly exceeded 60,000 a year; and pressure on funding for public services. They also made it clear from CWI’s point of view that protecting Wisconsin’s wellbeing requires making workforce recruitment and retention at least as much a priority as workforce preparation.

The second observation CWI would make is that workforce recruitment and retention - always a competitive endeavor - is in today’s world increasingly strategic and more financially competitive. Wisconsin can only achieve its necessary workforce population goals if it can compete successfully in this more strategic and financially challenging environment.

As a part of our current BE BOLD research, CWI retained Deloitte to identify and examine a variety of workforce recruitment initiatives across the country. Deloitte’s work revealed local, regional, and state initiatives strategically targeting younger workers with financial incentives relevant to their individual situational needs and desires - primarily debt management, housing and child development and care issues. New Haven, Connecticut, for example, offers prospective residents $10,000 in downpayment assistance to buy a house and free tuition to graduates of the New Haven public school system who go to a public community college or four year school in the state. Ohio has a Grants for Grads program that, “…includes 2.5% or 5% down payment assistance. Down payment assistance is forgiven after five years as long as [grant recipients] remain in the state of Ohio.”

Wisconsin brings marketable strengths to the current recruitment competition. Unlike many states, Wisconsin has multiple residential hubs, nearly all of which have at least one major employer; a mature educational infrastructure with PreK-12 schools, universities and technical colleges; access to major transportation and distribution systems; and a marketable quality of life environment. Wisconsin also benefits from a lengthy roster of employers and a well-developed regional and local economic, community and workforce development infrastructure well versed in the needs and capabilities of these employment hubs and the areas that surround them.

Wisconsin needs to augment its existing strengths with a more competitive, effective and sustainable workforce recruitment and retention strategy. More specifically, Wisconsin needs to:

1. encourage employers competing for high-demand workers to develop and/or expand existing recruitment initiatives focused on recruiting talent from outside Wisconsin and on retaining that talent as residential workers;
2. enhance the ability of employers to achieve success with their recruitment and retention initiatives by making Wisconsin’s debt management, housing, child development and quality of life workforce recruitment and retention incentives significantly more attractive and competitive;
3. encourage universities and technical colleges to strengthen and expand their efforts to recruit and retain out-of-state students pursuing high-demand careers;
4. enhance the ability of the educational infrastructure to achieve success with their recruitment and retention efforts by making Wisconsin a significantly more attractive and competitive place for gaining the knowledge and credentials required in a high-demand career ; and
5. identify new public revenues and new private revenues generated by the recruitment and retention that could be used in support of the recommended activities that is sustainable and does not require creating new, or increasing existing, taxes.

CWI’s research, experience, and engagement with population and workforce development challenges and opportunities over the past decade all confirm the critical relationship between the availability of talent and Wisconsin’s economic prosperity and social wellbeing. Given that correlation and the additional strains the COVID 19 pandemic is putting on the competition for workers, it is clear that Wisconsin, like many other states is at an “all hands on deck” moment, a time when it needs its employers; workers; workforce, economic and community development professionals; educators; policy-makers and elected officials working together on repopulating, building and strengthening its workforce and its middle-class.

Wisconsin’s existing workforce development infrastructure must play a role in this collaboration. In this context, it seems appropriate to suggest that the question facing the Wisconsin Legislative Council - and all the rest of us - is what might we do to enhance the ability of the workforce development infrastructure to energize, focus and support efforts dedicated to “repopulating, building and strengthening [Wisconsin’s] workforce and its middle-class”? As suggested throughout this requested response, CWI believes that an essential part of the answer to this question involves the workforce development infrastructure embracing a greater emphasis on the development of a more strategic, sustainable and effective recruitment and retention effort.

In addition, CWI acknowledges and applauds the fact that people and organizations across the state are already “on the job.” We look forward to working with them to address the needs and seize the opportunities in their region, area and community. CWI also appreciates and applauds the research and analytical contributions of organizations such as the Wisconsin Policy Institute and Forward Analytics - and would encourage those working on these issues to revisit the 2012 report, The Road Ahead: Restoring Wisconsin’s Workforce Development by Tim Sullivan, former Chairman of both the Governor’s Council on Workforce Investment and the College and Workforce Readiness Council.

Thank you for including us in your important work. We would be happy to provide additional information and/or talk about these issues further.

Sincerely,

Mark O’Connell
Executive Director, Wisconsin Counties Association
Vice-Chair, Competitive Wisconsin, Inc.

James B. Wood
Chair, Wood Communications Group
Strategic Counsel, Competitive Wisconsin, Inc.