2008 Lehigh Valley Workforce Report


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The 2008 Lehigh Valley Workforce Report was presented to the region\'s business community on January 28, 2008 by Kevin Flemming, President of Integrity Personnel, Inc.
The 2009 report is available on www.lehighvalleyworkforce.com

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2008 Lehigh Valley Workforce Report

  1. 1. 2008 This report was originally presented Lehigh Valley Workforce Report to the Lehigh Valley business community during the GLVCC Annual Economic Outlook on January 29, 2008. Introduction T he statistics that are commonly used to measure the health of a region’s labor market are important, but limited. Numbers like unemployment, new jobs, and wage growth are lagging indicators. They tell us what happened yesterday, but are less effective at predicting the future. When you run a firm that lives and breathes workforce strategy – you have to find other means of analyzing the factors that affect the availability & affordability of labor. These elements include more subtle trends that may not be obvious in the raw data. We hire employees for practically every industry in the Lehigh Valley. We review and interview thousands of candidates per year. Over time, we see patterns in the way that the labor market behaves and observe the subtle changes in the demographics of our workforce. When we see evidence of a shift in the market’s behavior, we go back to the data to see if we can validate our experience. This report highlights three significant trends in the local workforce environment that impact business’ ability to hire and retain strong employees. In ThIs Issue 1 Introduction Lehigh Valley Workforce Trends 2 The Evolution of a Competitive • Increasing competitiveness with Workforce & Wage Gap surrounding metropolitan areas 3 Performance Expectations • Competition within local talent market is 4 Higher Learning producing a higher quality workforce Sectors • Unrealized potential from the region’s higher education sector copyright 2008 INTEGRITY Personnel, Inc. Allentown, PA
  2. 2. 2 2008 The evolution of a competitive workforce W hether they’re aware of it or not, Lehigh Valley businesses are competing for talent with employers from outside of the Valley. From entry-level workers to experienced professionals, the ease of travel from here to New York City, Competitiveness with surrounding Philadelphia, and New Jersey metropolitan areas makes our local workforce highly mobile. • Mean annual salaries in LV, NYC, & Additionally, Philadelphia MSA’s the workforce itself is • Wage gap has been shrinking over past 10 competing with a wider pool years of people than ever before. • Effect seen across all labor sectors So we’ve copyright 2008 INTEGRITY Personnel, Inc. analyzed how Allentown, PA this increased population is affecting the quality of labor. Finally, this labor market includes a largely untapped resource of high-skill talent among the current student population. This trend points to our future competitiveness as much as our current challenges. Wage gap is shrinking I t’s common knowledge that a wage gap exists between our market and the surrounding metropolitan areas. An accountant in the Lehigh Valley makes less that an accountant doing the same job in Philadelphia or New York. But we’ve seen a striking shift in this wage differential. We looked at mean annual salaries for several occupations over the past 10 years, and compared them across three Metropolitan Statistical Areas: ABE; Philadelphia; and NYC. We’ve observed that the gap between those regions has been consistently shrinking during this period. Lehigh Valley vs. NYC Accountants still earn more in NY than in the Lehigh • 1998 wage gap Valley – but the spread is significantly less today than 16.95% it was in 1998. • ACCOUNTANTS • 2006 wage gap Lehigh Valley vs. NYC 7.75% • 1998 wage gap copyright 2008 INTEGRITY Personnel, Inc. Allentown, PA • EXECUTIVE 30.3% SECRETARIES Lehigh Valley vs. NYC • 2006 wage gap 11.85% • 1998 wage gap • WAREHOUSE 8.63% copyright 2008 INTEGRITY Personnel, Inc. Allentown, PA LABORERS We’ve seen the most dramatic movement in the • 2006 wage gap 1.42% mid-level occupations of administrative and office professionals. copyright 2008 INTEGRITY Personnel, Inc. Allentown, PA
  3. 3. 2008 Unskilled occupations have also experienced a decline. These are the least portable jobs in the market, which explains why the gap is not as wide. This shift means that there is less financial justification for an individual who lives in the Lehigh Valley to commute to another city for work. It opens up that segment of the population to local employers. Employees entering the region are raising performance expectations W hile the next trend we’re observing is related to the wage differential, it is a wholly different force in the labor market. It was revealed when we began to hire more employees whose previous jobs were outside of the area. These include both people who had been living in the Lehigh Valley while commuting to other cities, and new arrivals to the region. These individuals have brought an entirely new level of competition to our candidate pool. Because they generally have more years of direct experience, and have worked for fast-paced, competitive firms – these employees have exceeded the expectations of our Lehigh Valley clients. The effect of this new group of employees on the local labor pool is a general increase in productivity and overall job performance. One piece of evidence that we obtained was through a comprehensive survey of our temporary workforce a year and a half ago. Even we were surprised to find that over 62% of our temporary employees held a Bachelors degree or higher. These are office professionals who choose to work in temporary or contract positions. The reasons they choose temporary work over traditional jobs vary. Some state that they want new experience or new skills, while others prefer having flexibility in their work lives. In all labor sectors, the influx of new workers from New Jersey, New York and elsewhere is improving the quality of our local workforce. Competition within local talent market • More candidates entering from other markets (like NYC Phila.) • Bringing education, experience professionalism. • Raising performance expectations. copyright 2008 INTEGRITY Personnel, Inc. Allentown, PA Unique higher learning sector provides new resources F or those smaller employers who are concerned that they may be priced out of this new labor market – there is opportunity to be found through tapping into an underutilized pool of new workers. The Lehigh Valley is home to 6 independent colleges, 2 state colleges, and 2 community colleges. All combined, these schools register over 40,000 students per year according to LVEDC. To date, there has been no real cooperative effort on the part of the Lehigh Valley business community to leverage the flock of new grads coming out of these schools every year. One reason has been that new graduates are often overlooked for positions that don’t require a college degree. A second reason is that many employers overemphasize the need for work experience in their hiring criteria.
  4. 4. 2008 There are two important concepts that small employers should integrate in their hiring strategies. First, in a competitive labor market, there is no such thing as being overqualified. These younger workers are eager to take jobs that have Unrealized potential from our own traditionally been considered institutions of higher education support or paraprofessional. • In 2007, region’s colleges produced over 6,000 Second, the new graduates with Bachelor Master degrees. members of • Current grads are very flexible – willing to take the Millennial Generation (or on entry-level positions in exchange for learning Generation Y) opportunities. are the most flexible and • There is a disconnect between LV business fast learners community and LV colleges. we have ever copyright 2008 INTEGRITY Personnel, Inc. worked with. If Allentown, PA employers keep them challenged and offer them opportunities to contribute to the organization, they will become productive quickly. If you think you missed something – don’t worry. You haven’t read about any of these trends yet. Our firm has been working with this for the past 18 months because it’s our responsibility to be on the leading edge of any changes to the workforce. For traditional employers, there are easy-to-implement tactics available that will prepare their organizations to manage these changes effectively. By focusing on both retention and promotion, a company can save enormous costs while maintaining a competitive advantage during the toughest economic cycles. We believe that these trends will continue for the foreseeable future. The Lehigh Valley workforce will only become better skilled and Action Items for 2008 more expensive for employers. By adjusting their recruitment • Retention is critical to every employer and retention • Benchmark your compensation levels to strategies, local companies can current wage data leverage the business benefits • Focus on developing your existing that result from a superior labor employees through training promotion force. copyright 2008 INTEGRITY Personnel, Inc. Allentown, PA About the Author Kevin F. Flemming is the President of INTEGRITY Personnel, Inc., a business services firm based in the Lehigh Valley, PA. Integrity delivers recruitment staffing, business administration, and workforce planning to companies throughout the region. Mr. Flemming joined the firm in 1997 and developed its first integrated service model, blending traditional temporary staffing with complex project management services. A Certified Staffing Professional (CSP) and graduate of DeSales University, Kevin has been a featured speaker on workforce topics for such groups as Lehigh University’s Graduate Studies program, the Greater Lehigh Valley Chamber of Commerce, and the Manufacturers Resource Center. He has been closely involved with economic development in the Lehigh Valley since 2004, © 2008 INTEGRITY PERSONNEL, INC. and has published several articles on the region’s economics and workforce. Allentown, PA 610-433-3500