Three action steps needed to inclusively grow the Indiana workforce by 41,000 workers and secure Indiana’s economic future
In September of 2022, TechPoint launched Mission41K, one of the nation’s most comprehensive strategies to address a growing talent crisis. It’s a bold and ambitious goal, but the future of Indiana’s economy is heavily dependent on collaborative action to ensure mission success.
MISSION41K: INCLUSIVELY GROW THE INDIANA WORKFORCE BY 41,000 WORKERS BY 2030.
Demand for talent in Indiana continues to rise and is especially high across the digital transformation industry including software, infrastructure, cloud, AI, automation and cybersecurity. And while Indiana nationally ranks 16th in tech job growth rate, employers are struggling to fill their vacancies by clinging to unnecessary degree requirements and limiting work-based learning opportunities to upskill their current workforce.
At the same time, Hoosiers (particularly women and Black, Latinx and Hispanic workers) report a lack of access to career paths that provide livable wages. And if they do secure a job that promises career growth and a livable wage, retention rates are low.
Black women report feeling excluded, isolated and treated like they are invisible. Latina and Hispanic women often face a maternal wall bias and are forever treated like a foreigner. These experiences, captured by a 2022 research study conducted by The Center for Worklife Law and University of California, underscore the importance of not only redefining the talent pipeline, but also the critical work of creating jobs that people want.
The mission to grow the Indiana workforce is clear, but the path to success has been less defined. To make a measurable change, three efforts need to happen simultaneously:
- The talent pool must be re-defined,
- Upskilling must be normalized and
- The market must create jobs that people want.
Redefining the talent pool
Indiana employers continue to significantly restrict their talent pools by over relying on bachelor’s degrees as a proxy for skills and competency. Across tech roles, 47.6 percent of job listings called for a bachelor’s degree in 2022 and 24.6 percent called for an associate degree. Only 27 percent of all Hoosiers have a 4-year degree and fewer than 19 percent of Black and Latinx workers have those degrees. If we continue using very narrow parameters to screen candidates, we will struggle to meet the growing demand for talent.
What can we do instead? Employers can adopt a skills-first hiring process that focuses on identifying the skills a candidate needs to be successful in a role. These may be occupational skills (specific to the role such as building and managing a sales pipeline) or foundational skills (a competency needed across roles such as problem solving or written communication skills). By focusing on skills, the discussion is less about WHERE the skills were developed and more about HOW they can be demonstrated and applied to a prospective role. This significantly opens the talent pool to include veterans, non-degree holders, workers returning to the workforce, or candidates looking to transfer industries.
Implementing work-based learning opportunities
To meet the growing demand for talent, employers must shift from relying on candidates that “can hit the ground running” and instead incorporate training and upskilling into the daily workflow for all employees. This will be particularly important as digital transformation accelerates and so many of the jobs that exist today will become obsolete and talent will need to master new skills. In a recent study, Salesforce surveyed more than 4,000 full-time workers and found that while 54 percent of them believe generative AI will advance their careers, 62 percent say they DON’T have the skills to use it effectively. This example illustrates the importance of upskilling to building a future-ready workforce.
Further, 87 percent of respondents to a 2020 McKinsey survey who said their organizations had skill gaps or expected to face them in the next five years – and that was before generative AI burst onto the scene. With generative AI, automation will likely take over tasks accounting for 30 percent of the hours worked in the U.S. economy by 2030, up from 21.5 percent without it. Respondents expect data analytics and mathematical skills – critical to working with smart technologies – to be in particularly short supply over the next few years. Many organizations are tackling this challenge through hiring and employee skill-building, the two most common tactics to match skills to needs.
Two strategies businesses can use to upskill their workforces:
- Expand the use of a modern apprenticeship model to build a path to discover, prepare and retain talent with the most desired skills. Nine months after apprenticeship completion, 91 percent of apprentices retained employment as reported by the National Apprenticeship Study. Apprenticeship programs create a diverse workforce by attracting new talent pools, reducing turnover costs and increasing productivity.
- Host an open internal job board and freely share information about advancement opportunities with current employees to increase tenure. Investments in work-based learning opportunities provide the greatest return if retention rates are high. A 2023 article by Kate Heinz, estimates that an employee’s departure can cost a company approximately 1.5 to 2.0 times that employee’s salary. Employees want to stay with companies where they can grow their skills and expand their impact, as well as increase their salary and levels of responsibility. Options for internal growth need to be visible, encouraged, and transparent at all stages of the career pathway.
Creating jobs that people want
People in full-time professional roles expect a living wage that affords them adequate food and housing, reliable transportation and affordable healthcare. A living wage as defined by the MIT Living Wage Calculator is the hourly rate that an individual in a household must earn to support his or herself and their family. In Marion County, a living wage is $16.18 per hour/$33,655 salary for a worker with no children and $32.47 per hour/$67,543 salary for a single provider with one child.
Workers who cannot reliably afford to care for themselves and their families face significant barriers in obtaining and sustaining employment. This leads to higher turnover and increased costs for businesses. With the recent focus on increasing diversity in the workforce, it’s important to acknowledge the persistent gender pay gap. For example, in tech, women are offered a lower starting salary 63 percent of the time. This gap is even higher for Black and Latinx women.
A recent report from the Technology Councils of North America indicates Indiana’s tech worker gender gap is the 4th largest in the nation. Black and Latinx workers are significantly underrepresented across all tech occupations. Tech and tech-enabled roles are one of the largest sources for growth within the Indiana labor market, so it’s imperative that we narrow these gaps to meet the demand for talent.
In addition to a living wage, workers want inclusive benefits that support a variety of family structures and situations. One example is to create a bereavement policy that recognizes all families. Often, bereavement benefits are tied to the nature of the relationship and perceived closeness. For example, a typical bereavement policy will provide five days for the loss of an immediate family member (spouse, parent, child), but only two days for other relations. An employee raised by their aunt, would not receive the maximum allocation of time off to grieve the loss of their parental figure. Shifting bereavement policies to be more expansive signals to employees that they are supported and respected during a time of grief.
And finally, we must ensure that Indiana is a place where workers want to live. State-wide focus on policies that promote economic stability, accessible childcare, access to healthcare and a focus on the mental well-being of all Hoosiers will be essential.
To complete the mission to inclusively grow the Indiana workforce by 41,000, we will need all hands-on deck. Get started by joining the Mission41K Impact Network.
For strategies about how to adopt a skills-first approach, TechPoint and the Indiana Chamber of Commerce have created free and accessible training and resources designed specifically for Indiana.
Businesses should take time to review internal benefits and policies and ask employees if the current offerings meet the needs of their families. For 1:1 consulting, reach out to the team at Minority Moves Network for a customized approach to attract, hire and retain an inclusive workforce.