Attracting & Retaining Talent: Can Texas Compete? July 12, 2007 Tom Stellman TEDC Conference – Amarillo, TX

TIP Strategies, Inc. TIP is an economic development consulting firm based in Austin, Texas. Our services include: Strategic planning Target sector analysis Workforce assessment Site selection Economic impact analysis Land use planning

TIP is an economic development consulting firm based in Austin, Texas. Our services include:

Strategic planning

Target sector analysis

Workforce assessment

Site selection

Economic impact analysis

Land use planning

Representative Clients Suburban Austin-area Round Rock Georgetown Cedar Park Dallas Metroplex Rowlett Denton Benbrook Terrell Houston area Conroe Katy League City Pearland Rosenberg Northfield, MN Metro Areas & Regions City of Dallas City of Houston Envision Central Texas Southwest Mississippi Chicago-Milwaukee Corridor Richmond, VA Jackson County, IL Jefferson Parish, LA San Antonio EDF State of Texas State of Vermont Northern Ireland, UK The Netherlands

Suburban

Austin-area

Round Rock

Georgetown

Cedar Park

Dallas Metroplex

Rowlett

Denton

Benbrook

Terrell

Houston area

Conroe

Katy

League City

Pearland

Rosenberg

Northfield, MN

Metro Areas & Regions

City of Dallas

City of Houston

Envision Central Texas

Southwest Mississippi

Chicago-Milwaukee Corridor

Richmond, VA

Jackson County, IL

Jefferson Parish, LA

San Antonio EDF

State of Texas

State of Vermont

Northern Ireland, UK

The Netherlands

TIP Projects

facilities & site visits assessment benchmarking touchstone meetings cluster analysis visioning goal setting consensus building priority strategies priority projects specific actions resources responsible parties milestones budget metrics process for updating discovery opportunity implementation T heory I nto P ractice Planning Model

facilities & site visits

assessment

benchmarking

touchstone meetings

cluster analysis

visioning

goal setting

consensus building

priority strategies

priority projects

specific actions

resources

responsible parties

milestones

budget

metrics

process for updating

Evolution of Economic Development Goals Talent and Quality of Place Knowledge Higher Wages More Jobs Buildings 2010 2000 1990 1970 1980 evolutionary scale

Talent and Place Talent – the individuals that possess the skills and values to make organizations effective Quality of Place – viewing the assets of your community through the eyes of the talent you wish to attract and retain

Talent – the individuals that possess the skills and values to make organizations effective

Quality of Place – viewing the assets of your community through the eyes of the talent you wish to attract and retain

US manufacturing vs. services Source: US Bureau Labor Statistics; Economy.com

US mfg: output vs. employment Source: US Bureau Labor Statistics; US Bureau of Economic Analysis; Economy.com

US Employment Forecast 2006-2016

Two-thirds of all new jobs from just three major sectors.

Global Working Age Population SOURCE: U.S. Bureau of the Census, International Database population age 15-64 (in millions) 0 20 40 60 80 100 120 1990 2000 2010 2020 2030 2040 2050 Germany Japan Russia UK projection

US Working Age Population SOURCE: U.S. Bureau of the Census, International Database population age 15-64 (in millions) The generation ahead: expect a tight labor market since we won’t be adding workers at the pace with which we are accustomed. 2007: you are here projection 0 50 100 150 200 250 300 1990 2000 2010 2020 2030 2040 2050

US Labor Shortage? Since 1990, the US has added more than 1.5 million jobs annually . However, we are nearing a point when the annual net increase in the working age population will fall to about 500,000. SOURCES: TIP Strategies; U.S. Census Bureau; U.S. Bureau of Economic Analysis net chg in population age 18-64 0 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000 1,750,000 2,000,000 2,250,000 2005 2010 2015 2020 2025 2030 2035 2040 Projected Net Annual Change in the Working Age Population (18-64) Average Annual Job Creation Since 1990

Texas Labor Projections Since 1990, Texas has added more than 184,000 jobs annually . That’s about the level of growth our working-age population will experience when the Baby Boomers start retiring. Factor in a labor force participation rate of 2/3, and yes, Houston, we may have a problem. SOURCES: TIP Strategies; U.S. Census Bureau; U.S. Bureau of Economic Analysis net chg in population age 18-64 0 50,000 100,000 150,000 200,000 250,000 2005 2010 2015 2020 2025 2030 2035 2040 Projected Net Annual Change in the Working Age Population (18-64) Average Annual Job Creation Since 1990

US Working Age Population by Generation SOURCE: U.S. Bureau of the Census, projections based on 2000 Census population age 18-64 2011: The Baby Boomers reach retirement age 2030: Gen X reaches retirement age 2018: Gen Y makes up half of the working age population projection 0 25 50 75 100 125 150 175 200 225 1990 1995 2000 2005 2010 2015 2020 2025 2030 (in millions) pre-Boomers (born before 1946) Baby Boomers (born 1946-1964) Generation X (born 1965-1977) Generation Y and beyond (born post-1977)

US Labor Force Participation by Gender SOURCE: U.S. Bureau of Labor Statistics women men labor force participation rate (%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1950 1960 1970 1980 1990 2000

US Bachelor’s Degrees by Gender SOURCE: National Center for Education Statistics women men Bachelor’s degrees conferred projection 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Texas Working Age Population by Generation population age 18-64 At the surface, the generational pattern in Texas looks (and is) the same as the US. The difference is that the working age population in Texas will grow at a faster pace. SOURCE: U.S. Bureau of the Census, projections based on 2000 Census projection 0 5 10 15 20 1990 1995 2000 2005 2010 2015 2020 2025 2030 (in millions) pre-Boomers (born before 1946) Baby Boomers (born 1946-1964) Generation X (born 1965-1977) Generation Y and beyond (born post-1977)

Texas Contribution to Net Population Growth SOURCE: Texas State Data Center contribution to net population growth (%)

Texas Educational Attainment 2005 SOURCE: U.S. Bureau of the Census, American Community Survey 2005 % of population age 25+

Source: US Census Bureau "Importers" & "Exporters" of Domestic Migrants, 2000-2006 Top & Bottom Ten States

Components of Population Change in West Texas Metros, 2000-2006 Ranked by Percent Change Source: US Census Bureau Migration Natural Increase Total Change -9,885 381 -9,195 13,208 -4.0% -5,996 Wichita Falls MSA -7,320 490 -9,617 14,775 -1.4% -2,182 Abilene MSA -3,770 434 -6,370 10,036 0.0% -29 San Angelo MSA -3,340 1,961 -12,719 25,551 4.7% 11,711 Lubbock MSA -2,175 1,416 -6,679 14,152 5.2% 6,339 Odessa MSA 1,842 3,515 -12,762 23,226 6.6% 14,993 Amarillo MSA 1,623 1,186 -5,731 11,716 7.2% 8,371 Midland MSA Domestic Int’l Deaths Births % #

Growth in China Low cost competitor? Yes, but also competing for: Investment Resources Talent

Low cost competitor?

Yes, but also competing for:

Investment

Resources

Talent

Foreign National Engineering Degrees (% of graduates)

What are Employers Saying? “ Keep your tax incentives and highway intersections. We will go where the highly skilled people are.” — Carly Fiorina, former CEO of Hewlett Packard

“ Hot Jobs – Cool Communities” Rebecca Ryan of Next Generation Consulting says: “Communities work dog-hard to attract companies to their location, but that's only half the deal. Today, companies also rely on … community leaders to attract talent .”

Rebecca Ryan of Next Generation Consulting says:

“Communities work dog-hard to attract companies to their location, but that's only half the deal. Today, companies also rely on … community leaders to attract talent .”

Air and Water Quality Recycling Rates Car Pools, Commute Times Traffic Public Parks, Trails, and Recreation Areas Sunny Days Farmers Markets Natural Foods Stores “ Hot Jobs – Cool Communities” Fitness Centers Vegetarian Restaurants Rates of Crime Rates of Cancer Heart Disease Obesity Smoking Life Expectancy

Air and Water Quality

Recycling Rates

Car Pools, Commute Times

Traffic

Public Parks, Trails, and Recreation Areas

Sunny Days

Farmers Markets

Natural Foods Stores

Fitness Centers

Vegetarian Restaurants

Rates of Crime

Rates of Cancer

Heart Disease

Obesity

Smoking

Life Expectancy

Fruit and Vegetable Consumption Work Sick Days Rates of Depression High Blood Pressure Unemployment Charitable Donations Cost of living Poverty “ Hot Jobs – Cool Communities” Concentration of Designers, Artists, Authors, Musicians, Actors and similar Professions Percentage of Community Under 40 Population Diversity (ethnic, religious, sexual orientation) Number of Bars, Nightclubs and similar per capita Number of Art Galleries, Museums, and similar per capita

Fruit and Vegetable Consumption

Work Sick Days

Rates of Depression

High Blood Pressure

Unemployment

Charitable Donations

Cost of living

Poverty

Concentration of Designers, Artists, Authors, Musicians, Actors and similar Professions

Percentage of Community Under 40

Population Diversity (ethnic, religious, sexual orientation)

Number of Bars, Nightclubs and similar per capita

Number of Art Galleries, Museums, and similar per capita

The War for Talent *by Ed Michaels, Helen Handfield-Jones, & Beth Axelrod Harvard Business School Press - 2001 Talented people are scarce Jobs are scarce People are mobile and their commitment is short term Employees are loyal and jobs are secure People demand much more People accept the standard package they are offered Better talent makes a huge difference Better talent makes some difference Talented people are the competitive advantage Machines, capital, and geography are the competitive advantage Companies need people People need companies The New Reality The Old Reality

Generations Veterans (aka Radioers) - Born 1922 to 1945 - 75 million Boomers – Born 1946 to 1964 – 80 million Generation X – Born 1965 to 1980 – 46 million Generation Y – Born after 1980 – 76 million Source: Mary Alice Burkhart - Austin Peay State University

Veterans (aka Radioers) - Born 1922 to 1945 - 75 million

Boomers – Born 1946 to 1964 – 80 million

Generation X – Born 1965 to 1980 – 46 million

Generation Y – Born after 1980 – 76 million

Millennials Born after 1991 Not yet in the workforce, but we need to anticipate their relationship with work Source: Mary Alice Burkhart - Austin Peay State University

Born after 1991

Not yet in the workforce, but we need to anticipate their relationship with work

The Veterans are . . . 75 million workers age 60+ Defining events – Great Depression, WWII, Korea, Radio Age, rise of labor unions Frugal and resourceful Loyal to the company Respectful of order, rules and authority Value lessons from the past Believe in the virtue of hard work, patience and thrift Require tangible recognition of achievement Source: Mary Alice Burkhart - Austin Peay State University

75 million workers age 60+

Defining events – Great Depression, WWII, Korea, Radio Age, rise of labor unions

Frugal and resourceful

Loyal to the company

Respectful of order, rules and authority

Value lessons from the past

Believe in the virtue of hard work, patience and thrift

Require tangible recognition of achievement

Baby Boomers are . . . 80 million workers ages 42 – 60 Defining Events – Television, suburbia, Woodstock, Viet Nam, civil rights movement, the Cold War Optimistic and team oriented Socially and intellectually involved Take pride in working long hours to get ahead Carefully plan and monitor projects to completion Enjoy receiving public recognition and other rewards for their accomplishment Source: Mary Alice Burkhart - Austin Peay State University

80 million workers ages 42 – 60

Defining Events – Television, suburbia, Woodstock, Viet Nam, civil rights movement, the Cold War

Optimistic and team oriented

Socially and intellectually involved

Take pride in working long hours to get ahead

Carefully plan and monitor projects to completion

Enjoy receiving public recognition and other rewards for their accomplishment

Generation Xers are . . . 46 million workers ages 26 to 41 Defining Events – Computers, MTV, Watergate, energy crisis, fall of Berlin Wall, social change Trust authority only if accompanied by competence Focused on developing skills to enhance marketability Self-reliant and independent Confident in their technology based skills Work smarter, not harder Job motivation – challenging and fun Source: Mary Alice Burkhart - Austin Peay State University

46 million workers ages 26 to 41

Defining Events – Computers, MTV, Watergate, energy crisis, fall of Berlin Wall, social change

Trust authority only if accompanied by competence

Focused on developing skills to enhance marketability

Self-reliant and independent

Confident in their technology based skills

Work smarter, not harder

Job motivation – challenging and fun

Generation Y is . . . 76 million workers under age 26 Defining events – Advanced technology, Oklahoma City bombing, school violence, multiculturalism, 9/11 Access and process information faster Extensive users of technology at home and at work Group oriented problem-solvers Seek opportunities to explore new paths Seek flexibility and freedom on the job Optimistic, sociable and achievement-oriented “ Generations at Work: Managing the Clash of Veterans, Boomers, Xers and Nexters in your Workplace” by R. Zemke, C. Raines and B. Filipczak

76 million workers under age 26

Defining events – Advanced technology, Oklahoma City bombing, school violence, multiculturalism, 9/11

Access and process information faster

Extensive users of technology at home and at work

Group oriented problem-solvers

Seek opportunities to explore new paths

Seek flexibility and freedom on the job

Optimistic, sociable and achievement-oriented

“ Generations at Work: Managing the Clash of Veterans, Boomers, Xers

and Nexters in your Workplace” by R. Zemke, C. Raines and B. Filipczak

Return to Roots is a campaign aimed at the estimated 15,000 alumni who have graduated from Southwest Virginia’s high schools in the last 20 years and may have moved away from the region. Return to Roots is an information portal highlighting the exciting job opportunities that exist today in Virginia’s Great Southwest region.

Return to Roots is a campaign aimed at the estimated 15,000 alumni who have graduated from Southwest Virginia’s high schools in the last 20 years and may have moved away from the region.

Return to Roots is an information portal highlighting the exciting job opportunities that exist today in Virginia’s Great Southwest region.

Greater Killeen Area OPERATION ECONOMIC TRANSFORMATION A BLUEPRINT FOR ADVANCING ECONOMIC OPPORTUNITIES IN THE FORT HOOD REGION Veterans Inventory

SURVEY OF POST-MILITARY SERVICE INTENT

Quality of Place Factors

Rio Grande Valley: Generational Research Project Goal : To better understand how different generations relate to work and place and to each other in order to make better decisions about human resource management, education and training, and other initiatives designed to prepare, retain and attract talent. Three components: National and regional data Pilot survey and focus group meetings Findings and recommendations

Goal : To better understand how different generations relate to work and place and to each other in order to make better decisions about human resource management, education and training, and other initiatives designed to prepare, retain and attract talent.

Three components:

National and regional data

Pilot survey and focus group meetings

Findings and recommendations

Findings from Pilot Survey Relationship with work: Baby boomers were more interested in benefits Generation X was more interested in career opportunities and work schedule flexibility Relationship with place: Baby boomers were more interested cost of living and access to higher education Generation X was more interested in access to employment opportunities and entertainment options

Relationship with work:

Baby boomers were more interested in benefits

Generation X was more interested in career opportunities and work schedule flexibility

Relationship with place:

Baby boomers were more interested cost of living and access to higher education

Generation X was more interested in access to employment opportunities and entertainment options

Retiree Impact Center for Economic Development (CED) at Jacksonville State Univ. reports that retirees: control 77% of the nation’s assets maintain 80% of savings account balances own 68% of all money market accounts buy 48% of new automobiles According to one estimate, the economic impact of one relocating retiree on a community is equal to 3.7 factory workers .

Center for Economic Development (CED) at Jacksonville State Univ. reports that retirees:

control 77% of the nation’s assets

maintain 80% of savings account balances

own 68% of all money market accounts

buy 48% of new automobiles

According to one estimate, the economic impact of one relocating retiree on a community is equal to 3.7 factory workers .

Retiree Trends & Attitudes Working retirement is more common . Retirement is more of a transition than a sudden event. Active in community Life experience and connections make them important resource. Aging in place Only one in five will relocate. Most prefer to stay near family, friends, & familiar places. Technology use AOL-sponsored study found that almost half of people age 55+ have been on-line for 4 years

Working retirement is more common .

Retirement is more of a transition than a sudden event.

Active in community

Life experience and connections make them important resource.

Aging in place

Only one in five will relocate. Most prefer to stay near family, friends, & familiar places.

Technology use

AOL-sponsored study found that almost half of people age 55+ have been on-line for 4 years

Yes, but we have much work ahead… Anticipate a tight labor force in the coming years Adapt to (and learn from) the needs of Gen Y Recognize that women may be our best underutilized human resource in the competitive years ahead Prepare new generations to enter the workforce with solid and complete educations Can Texas Compete ?

Yes, but we have much work ahead…

Anticipate a tight labor force in the coming years

Adapt to (and learn from) the needs of Gen Y

Recognize that women may be our best underutilized human resource in the competitive years ahead

Prepare new generations to enter the workforce with solid and complete educations

Thank you 7000 N. MoPac, Ste. 305 Austin, TX 78731 512.343.9113 tel 512.343.9190 fax www.TIPstrategies.com TIP Strategies, Inc. << T heory I nto P ractice >>