Supporting Sector Strategies In The District Of Columbia

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  • 1. Supporting Sector Strategies in the District of Columbia June 2011 Marco Crocetti, Greg Roth, Josh Wallish
  • 2. Executive SummaryThis report details the discussions at those three forums, as industry professionals providedunique insight into what makes their business successful and what challenges they face inassembling a 21st century workforce to ensure their competitiveness and prosperity. Thefindings from these forums provide a road map for the business community and the broaderworkforce development community to ensure that the talent pool in the nations capital is notonly of the highest quality, but also meets the immediate and future demands of its ever-changing job market.Recommendations to advance the sector initiatives in the District of Columbia 1) Partnerships: In order to maximize workforce development efforts, the quantity and meaningful utilization of public-private partnerships must be increased because they help to address the challenges that DC residents face in accessing the workforce. In order to affect change, the District must also integrate practices from successful neighboring regions to improve the return on investment for its own collaborative efforts. 2) Policies: The region must develop and enact policies to increase and enhance employment opportunities while simultaneously establishing and retaining an adaptable workforce. The workforce must be prepared to meet the needs of an evolving economy, which requires flexibility to accommodate the rapidly changing needs of current and prospective employers. 3) Programs: Strategies for developing tomorrow’s workforce specifically indicate hands- on programming to link future workers with the opportunities and demands of their prospective workplaces. Employers must work closely with the nonprofit community and educational institutions to train and place students in healthcare, hospitality and tourism, and financial employment opportunities. 4) Populations: Certain sectors of the population can be viewed as untapped resources, some of which are currently excluded from consideration for employment. Three historically underutilized populations include: workers with disabilities, citizens on public assistance, and ex-offenders. Including these populations in a targeted workforce strategy should be a priority. 5) Performance: Stakeholders must be vigilant and honest about broad returns on investment. By establishing performance standards and measures, and by monitoring and evaluating results against goals, the region can demonstrate the effectiveness of workforce development policies while simultaneously improving them.In conclusion, the DC Chamber of Commerce’s vision for the 21st Century workforce inWashington DC is for government, business, education and community-based organizations tocollaborate and achieve a common objective: a workforce that has the skills businesses need tofill current and future job opportunities. Additionally, in this vision, nonprofits, school systems,community colleges and other institutions of higher learning teach students skills employerswant and issue credentials employers recognize. Community-based organizations shouldleverage their unique ability to remove barriers to employment and cultivate the skills needed tojoin the workforce. The public workforce system needs to provide the necessary resources tofund training and provide a mechanism to convene all relevant stakeholders on a regular basis.Supporting Sector Strategies in the District of Columbia 2
  • 3. IntroductionDespite taking a backseat in the headlines to the economic struggles of the past few years, akey component of the economic success of the District of Columbia remains effective workforcedevelopment. As the economic bases of regions evolve, emerging industries require theirworkers to have new knowledge, skills, and abilities. In turn, these workers need access totimely education and training that will successfully prepare them for the high-growth careeropportunities of tomorrow.When the DC Chamber of Commerce issued its state of business report on the DC economyand infrastructure in 2010, it found a resilient local economy weathering an extended economicdownturn. Since that time, regional employment numbers have improved but numbers for theDistrict have not. According to the US Bureau of Labor Statistics, as of May, 2011, the laborforce in Washington DC was 335,000 people strong with about 33,000 unemployed yielding anunemployment rate of 9.8%. With a regional unemployment rate of 5.5%, unemployment in theDistrict is significantly higher than the rest of the region.As a 501(c) (3) affiliate of the DC Chamber, the DC Chamber of Commerce Foundationsmission is to provide education and information to increase the quality and quantity of leadersavailable for tomorrows businesses and to grow a stronger economy by strengthening viablesmall and mid-sized enterprises throughout the District of Columbia. Translating this mission toaction in 2010, the Foundation identified three high-growth sectors in the District’s economy andconducted a series of forums examining the state of talent development in each of those threesectors: hospitality and tourism, healthcare, and banking and financial services.Though government and professional and business services employ more than half of allworkers in the District, the three sectors that were the subjects of the forums contribute 122,000jobs and are among the highest growth sectors in the economy: leisure and hospitality has59,000 employees, healthcare services has 37,000 employees, and financial services has26,000 employees. (Bureau of Labor Statistics, July, 2011)This report details the discussions at those three forums, as industry professionals providedunique insight into what makes their business successful and what challenges they face inassembling a 21st century workforce to ensure their competitiveness and prosperity. Thefindings from these forums provide a road map for the business community and the broaderworkforce development community to ensure that the talent pool in the nations capital is notonly of the highest quality, but also meets the immediate and future demands of its ever-changing job market.Each forum followed a similar template for discussion. After the moderator gave an overview ofthe industry, a panel of industry professionals was asked to identify challenges and solutions inthe following seven areas:  Overall trends in the industry  Implications of these trends on employment opportunities  Impact of globalization and technology  Emerging employment opportunities that will grow  Misconceptions about working in the industry  Skills needed for today’s workforce  Industry strategies for developing tomorrow’s workforceSupporting Sector Strategies in the District of Columbia 3
  • 4. As each forum came to a close, panels and attendees were asked to offer recommendationsand consider next steps in order to address trends within their sector; strategies for attracting,retaining, and developing qualified and motivated employees, and partnering to meet thesector’s workforce needs. Finally, panelists were asked to offer their vision for growth over thecoming 18 months.In summation, this report should be viewed as the beginning of a strategic visioning process.The DC Chamber, Chamber Foundation, and industry partners will consider the best solutionsfor the District of Columbia to provide and coordinate resources, programs, research efforts andother activities in order to establish a world-class talent pipeline: a quality education systemworking seamlessly with a citywide economic and workforce development system to provide theemployer community with top-notch, highly skilled workers.Banking and Financial ServicesOn May 5, 2010, the DC Chamber of Commerce convened a forum at Holland & Knight LLP todiscuss the workforce trends and challenges in the Banking and Financial Services Sector. Thepanel included Kate Carr, President, Cardinal Bank; Lyles Carr, III – Senior Vice President, TheMcCormick Group, Inc.; Mike Harreld, Regional President, PNC Bank; and Bryant Ruiz Switzky,Washington Business Journal (moderator).The panelists noted a number of overarching sectoral trends, beginning with the trend towardconsolidation. This is happening within the sector as banks and financial service providersmerge. It is also happening across sub-sectors as products and services that were traditionallyoffered by one financial services sub-sector are now being offered by related sub-sectors. Tocompete in an increasingly consolidated arena, these businesses are marketing themselves byselling the impact of their business values on the quality of life and their workplace culture.Finally, panelists noted that banks and other financial services providers are expanding intominority and underserved markets.The panelists identified key employment trends, including the fact that the industry is requiredby law to educate and ensure the necessary credentialing of its employees. They went on tonote that the hiring philosophy in the financial services sector is that the company can teach theproduct but the employee has to have the soft skills that translate into sales. For this reason,the sector looks to hire the top 25% of graduates who are culturally astute. Terminations are,predictably, generally centered around an inability to get along with other staff and clients.Given the nature of the skills employers are looking for, there is a tendency to promote staff fromwithin. Promoting from within also serves as a key retention strategy. Those who leave theirpositions tend to do so due to a lack of recognition.The impact of technology and globalization in the banking and financial services sectorcannot be overstated. Financial services businesses that are web-based are transforming boththe demands of customers and the business models of the service providers. In response tothis, financial services businesses are increasing web-based services to both improve customerconvenience and to target clients who are constantly mobile. A move toward technology-basedservices has caused a growth in tech support jobs.Globalization has resulted in the movement to off-shore jobs in IT, claims processing, financeand accounts payable, and call centers. This has been facilitated by an increasing tendency tosegment business processes.Supporting Sector Strategies in the District of Columbia 4
  • 5. The jobs that are growing in the sector were identified as direct customer service jobs: banktellers, investment advisors, retail banking and those who can sell the company’s financialservices to a broad base of clients needing complex transactions requiring brokers,underwriters, and actuaries.There are a number of common misconceptions about the banking and financial servicessector. Banking is not the same industry it was 25 years ago. It is no longer a “9 to 5”operation. With the advent of web-based services, customers expect and get 24/7 service.Often, the potential workforce is unaware of the excellent compensation and benefits that goalong with the pleasant work environment.The panelists were clear about the skills and traits that are needed for today’s workforce inthe banking and financial services sector. Notably, they do not include the hard skills of knowingthe product (which employers can teach) but are instead soft skills:  Customer service; specifically having the ability to relate to and communicate with a broad range of customers, from those who are very sophisticated to those who are not well educated or financially astute  Being people oriented  The ability to maintain confidentialityBeyond these skills, fluency in a foreign language is highly valued by employers in this sector.Finally, the panelists noted that many of those recruited do not show up for their drug screeningor cannot pass the background check necessary for having them bonded.The panelists concluded with their recommendation for developing the workforce of thefuture, which is to create a partnership between the banking and financial services sector andhigher education. Community colleges can offer certificates in the sector-specific skills that willallow employers to put graduates to work with less training. In developing any such program,the sector will want to see the college training program emphasize the importance of relationalskills as key to success in the banking and financial services industry.HealthcareOn July 15, 2010, the DC Chamber of Commerce convened a forum hosted by Holland & KnightLLP to highlight the workforce challenges and trends in the healthcare industry. The panelincluded: Stephen Burns, Sr. Vice President, Patient Care Services, Providence Hospital; EdithWestfall, Deputy Director, Workforce Strategy Center, Community College of the District ofColumbia; Peter E. Lavine, MD, President, Medical Society of the District of Columbia; Robert A.Malson, Esq., President, District of Columbia Hospital Association (moderator).The panel highlighted four major trends in the healthcare industry: the increasing use oftechnology, especially pertaining to filing health records electronically; the increasing push touse community-based healthcare; the increasing need for a national level credentialing policy;and the increasing level of staff diversity.The panel explained that the types of employment and occupational growth opportunities inthe healthcare industry include many jobs below the nurse and physician level. Thus, there is anincreasing emphasis on more techs and nurse practitioners. All nursing positions and thoseSupporting Sector Strategies in the District of Columbia 5
  • 6. who work with people with disabilities will be expanding. For example, Providence Hospital wasone of 50 institutions across the country that received a 4.9 million dollar grant for workforcedevelopment. They intend to use that grant to educate 500 workers over the next three years atthe certificate level. This is an example of how healthcare is able to move away from thehospital to community-based settings.In the healthcare industry, technology has had a significant impact on business processes,client services, workforce need, and customer demands. Customers now expect thehealthcare industry to be completely wired. For example, many customers now want toschedule appointments online. This has become problematic because the healthcare workforceis still behind digitally. Thus there is an increasing need to train workers -- specifically the oneswho have not attended college -- on how to operate computers effectively. It is important to notethat although a portion of the younger population will want to take advantage of healthcaredigitalization, many patients are elderly, disabled, or come from limited means. Thus thehealthcare industry must be able to account for patients who have limited computer skills.Some hospitals have been hesitant to make records electronic because they have not seen areturn on investment. The cost for trained staff and additional IT support to support electronicrecords can significantly increase a hospital’s staff costs. In some cases technology transitions,in addition to increasing costs, have proven to be ineffective. For example, the increasing trendof iPad use in the hope of providing better input and responses for diagnostics has yet toachieve its goals. Finally, the lack of uniformity in software programs implemented by varioushospitals for electronic records has created inefficiency. Thus, the economic benefits ofdigitalization have yet to be realized.The impact of globalization on the recruitment of new workers has resulted in an increasinglevel of staff diversity. For example, the staff at Providence Hospital is made up of people fromover 38 different countries. It is important to note that different cultures have differing views onmedicine and healthcare, and bridging such gaps has proven to be challenging. Additionallyglobalization has created an increasing problem of outsourcing, which can be detrimental toregional-based workforce development.Public understanding is plagued by misconceptions about working in the healthcareindustry, more specifically the changing roles of physicians, assistants, and techs. Assistantsand techs are now qualified to perform many of the tasks only a physician was previouslyqualified to perform. Not understanding this, many patients still prefer to have their physicianprovide many direct care tasks that assistants can provide. Thus, there is a need to inform thepublic that high-quality care does not require their physician to be physically present duringevery procedure. It is important to note that when developing healthcare policy reform, thelargest cost in the healthcare sector is labor.The panel stated that the necessary skills needed in todays healthcare workforce include:proper education for the position, technical skills, customer service skills, and knowledge of thejob responsibilities and limitations.One of the most important strategies for developing tomorrows workforce is maximizing thepotential of available talent. It is extremely important to educate available talent about possiblecareer opportunities. Additional potential sources of available talent are ex-offenders and peopleon public assistance. According to figures recently produced by the DC Department ofEmployment Services, there is a 25% unemployment rate in Ward 8. This figure includes manySupporting Sector Strategies in the District of Columbia 6
  • 7. ex-offenders that are excluded from some healthcare jobs by law. People on public assistanceoften require positive reinforcement to enter these jobs because they are pessimistic about theirqualifications and their economic strains seem insurmountable to them. Finally career laddersmust provide a clear path to opportunities to attract entry level workers.However there are concerns about the skills of people entering the healthcare workforce: Poorsoft skills, such as poor customer relation skills, can often be an issue. Occasionally the desirefor purely economic incentives overcomes the goal of wanting to help people which cancompromise the quality of care. Thus, it is important to note that with whatever strategy is beingdeployed, the quality of care must not falter.To develop a workforce, employers also need to collaborate more with educational institutionsutilizing tools such as training, to incorporate students into clinical rounds. Additionally, hospitalsmust reverse the trend that limits the amount of available opportunities to non-traditionalstudents for clinical rounds.The Healthcare Workforce Industry Forum prioritized the recommendation that there is astrong need for tort reform to bring doctors and jobs back to the District. In DC, medical liabilityis a huge issue because resident doctors cannot afford liability insurance. Thus, doctors areleaving the city and taking their staffs with them. In some cases these relocations are completelydepleting parts of the District of vital types of health care professionals. For example, there arecurrently no OB/GYNs in Ward 8. This migration is hindering the ability of DC’s health sector togrow. One panelist noted that, to date, the DC government, which includes the Council and theExecutive office, has been reluctant to waver on this issue. Democrats control tort reform in thiscity and getting it passed is extremely difficult. The panelist stated that the DC governmentneeds to understand that tort reform is not a partisan issue.Hospitality and TourismOn October 6, 2010, the DC Chamber of Commerce convened a forum at Holland & Knight LLPto shed light on growing workforce challenges, trends, and prospects that face the hospitalityand tourism industry. The panel included: Paul Cohn, Senior Executive Officer & Co-Founder,Capital Restaurant Concepts Ltd.; Amanda Hyndman, General Manager, Mandarin Oriental,Washington, DC; George Brown, J.D., Director, Center for Workforce Strategies, CommunityCollege of the District of Columbia; and Elliott Ferguson II, President & CEO, Destination DC(moderator).Hospitality and Tourism is one of the fastest growing industries in DC. In 2010, it wasprojected that the industry would stagnate; instead it has generated over $5 billion dollars inrevenue from visitors, making it the second biggest industry in DC for 2010. According to onepanelist, there are currently 285,000 people employed by the industry in the DC region, withabout 66,000 of those jobs located in the District itself.The panel highlighted six major trends within the hospitality and tourism industry:  Customer Service has always been paramount for the hospitality and tourism industry, because consumers appreciate recognition and personal attention.  Social Media grants real-time opportunities to respond to customers. This tool has been growing exponentially due to the increasing level of technical literacy by consumers.Supporting Sector Strategies in the District of Columbia 7
  • 8.  Recently product diversification has gained a renewed importance due to the transition in focus from business to leisure travelers. This transition is necessary to accommodate the specific kind of customer service desired by leisure travelers.  Value perception has become a new focus due to the industrys realization that customers have different ways of defining value. Different consumers define value variously as: low price, quality of product for price paid, quantity of products for price paid, or getting a particular experience they wanted independent of the products and services offered. The challenge for the industry is to accommodate all these definitions of value.  The changed perception of DC as a safe and vibrant city has yielded results opposite to the low expectations for the hospitality industry for 2010. Georgetown is no longer the epicenter of the restaurant business--other options include Adams Morgan, U Street, H Street, etc. This, along with the plethora of museums and long list of activities available in the city, has sparked a revitalized interest in visiting DC.  Concurrent to this change in perception, the increased number of rallies held by TV personalities and issue advocates has contributed to increased visitor traffic. Although these rallies have posed a challenge to hotels by increasing accommodation needs and shortening response time, they have proved to generate a lot of business.According to one panelist, employment/occupational growth opportunities in the Hospitalityand Tourism Industry are predicted to increase by at least 40,000 by 2016. More specifically,front of the house guest service will grow significantly. One employer on the panel noted thatshe does not anticipate that employers will significantly increase the number of employees foremerging needs like social media and risk management.The impact of globalization on the recruitment of new workers has resulted in increasedworkforce diversity and mobility. The mobility of the hospitality industry workforce has becomean asset vital to the promotion of growth. The large variety of jobs and opportunities for upwardmobility within the hospitality and tourism industry helps to promote a stable workforce. Forexample, if an international hotel chain has problem filling all the positions in one of its hotelsoverseas, it can offer certain incentives to employees to switch locations.The greatest impact that technology has had on the industry is through social media whichhas allowed for increased feedback to business and increased access to more offers anddiscounts for consumers. This allows the workforce to seek efficiencies through technology. Ithas become so popular that the industry must now have someone constantly responding toTweets, Facebook posts, and various other social media tools. Additionally, websites are nowcompletely interactive. These technologies allow businesses to capture guest feedback, such ascustomer likes and dislikes, and subsequently analyze the data. Thus it has becomeincreasingly important to promote technology education and analysis.Despite the rapid increase in social media, there has not been any push back from guests aboutthe information that is being collected. All the feedback that the industry has received has beenoverwhelmingly positive. Guests like to be, and appreciate the opportunity to be heard.The three major misconceptions about working in the hospitality and tourism industryrelate to employee hours, wages, and job diversification. It is commonly believed thatSupporting Sector Strategies in the District of Columbia 8
  • 9. employees work endless hours for extremely low wages and operate as bellhops, waiters, orcleaners. On the contrary, there is a fair amount of upward mobility. Employees work an averageof 40 to50 hours a week, and there is a large variety of jobs, many of which are not apparentbecause they operate behind the scenes (for example: technicians).The most important skill needed for today’s hospitality and tourism workforce is goodcustomer service. The hospitality and tourism industry is analogous to theater. For instance, ahost or a doorman is the first impression guests have at an establishment, and first impressionsare often the most important. Employees must be knowledgeable, know how to up-sell, andmust be excited about the product. Thus to be successful in this industry, one must thrive on thetempo and be extremely extroverted and driven.The two major strategies for developing tomorrow’s workforce include attracting qualifiedand motivated employees and developing and retaining employees.The panelists acknowledged that to attract qualified and motivated employees, employersmust first provide incentives, such as desirable work atmospheres and conditions, opportunitiesfor upward mobility, and education and training opportunities.Training and education are vital to developing and retaining employees within the hospitalityindustry. For example, the Community College of the District of Columbia has begun aninnovative training program. It begins with a 10 week training program for about 100 individualsthat follow a national curriculum certified by hoteliers. The program provides training in back-of-the-house duties, front-of-the-house duties, technology, and soft skills. After the trainingprogram, there is a certification exam then a 12-week internship program that allows participantsto gain actual work experience. What is also unique about the program is that it allows non-violent ex-offenders to participate.RecommendationsThe following action steps have been constructed by the DC Chamber, Chamber Foundation,and its industry partners as a result of the industry-specific forums, and with the knowledge thatfuture forums could provide additional strategies:Partnerships: In order to maximize workforce development efforts, the quantity and meaningfulutilization of public-private partnerships must be increased because they help to address thechallenges that DC residents face in accessing the workforce. In order to affect change, theDistrict must also integrate practices from successful neighboring regions to improve the returnon investment for its own collaborative efforts. Currently, the dialogue within the region betweenstakeholders in the business, education, training, human and social services, economicdevelopment, and government sectors is insufficient. Part of the solution should be theWorkforce Investment Council (WIC), a federally mandated entity charged with settingworkforce development policy and overseeing workforce development programs, over half themembers of which must come from the business community. The DC WIC functions as both astate and local-level board.In 2008, the DC Council passed legislation requiring the city to create a workforce intermediaryto meet hiring goals for the Southwest Waterfront initiative. The workforce intermediary conceptof establishing a workforce broker should be further developed to help connect residents to jobsof the future with employers.Supporting Sector Strategies in the District of Columbia 9
  • 10. Whether through the DC Chamber Foundation, the WIC, or another avenue, the businesscommunity must be in communication with the regions major stakeholders in a results-focusedstrategic workforce investment plan. Meaningful partnerships with the nonprofit sector andhigher education in which community based organizations and community colleges offertargeted training and certificate programs can more effectively pave the pathway to college andcareer.Policies: The region must develop and enact policies to increase and enhance employmentopportunities while simultaneously establishing and retaining an adaptable workforce. Theworkforce must be prepared to meet the needs of an evolving economy, which requiresflexibility to accommodate the rapidly changing needs of current and prospective employers.The major roadblocks to substantial workforce development policy reform include: (a) thecontinuing public discourse that characterizes workforce development as a First Source hiringproblem; (b) the severe education and social pathologies that affect the chronic unemployedand underemployed; (c) the DC-centric nature of workforce development policy prescriptions;and (d) the detrimental trend that DC workforce development advocates do not look atemployment possibilities beyond the confines of the District.Programs: Strategies for developing tomorrow’s workforce specifically indicate hands-onprogramming to link future workers with the opportunities and demands of their prospectiveworkplaces. Employers must work closely with the nonprofit community and educationalinstitutions to train and place students in healthcare, hospitality and tourism, and financialemployment opportunities. Virtual learning has the potential to be a valuable tool for trainingsuch employees. Finally, workforce development strategies must focus on employmentincentives, rather than the current tendency of imposing penalties to failure to hire.In order to create positive workforce development reform, workforce development initiativesneed to embody a more regional collaborative approach among policy decision makers withinthe DC government. This is the case because employment and unemployment issues are notcentered in the District; they must be viewed as regional issues. The key is to expand access forDC residents to regional employment opportunities.Populations: Certain sectors of the population can be viewed as untapped resources, some ofwhich are currently excluded from consideration for employment. Three historically underutilizedpopulations include: workers with disabilities, citizens on public assistance, and ex-offenders.Including these populations in a targeted workforce strategy should be a priority.Moving forward, the District as part of the region will be experiencing new opportunities for longterm sustainable wage employment. Although many of those opportunities will be outside theDistrict’s borders, they are still very important opportunities to DC residents. For example, theGreater Washington Board of Trade stated that it will increase its focus on development in thegreater Baltimore and northern Virginia area in the sea and rail transportation industry. Both ofthese emphases will sponsor a trained workforce. These jobs will provide livable wages that aresufficient enough to sustain a family. This highlights the important distinction between theworkforce compositions of the region compared to those of the District. While the Districtpredominantly utilizes a “knowledge” workforce, the region employs both “knowledge” and“skilled” workforces. The District must find a way to access and take advantage of the skilledworkforce within the city, and to connect to regional opportunities.Supporting Sector Strategies in the District of Columbia 10
  • 11. Performance: Stakeholders must be vigilant and honest about broad returns on investment. Byestablishing performance standards and measures, and by monitoring and evaluating resultsagainst goals, the region can demonstrate the effectiveness of workforce development policieswhile simultaneously improving them.The DC Chamber believes it can play a key role in future workforce development through thefollowing initiatives:  Facilitating partnerships and collaboration;  Uniting stakeholders to meet their common objectives;  Working to advance the interest of local employers, community-based organizations, and governmental agencies that provide workforce development services;  Address regional needs. The Chamber believes it is uniquely positioned to carry out such a task because it is not bound by jurisdictional lines, and can thus serve the interest of business in the entire Washington DC area; and  Address the need to standardize credentials. Credentials do not serve their purpose if they are not helpful to and recognized by businesses and employers. Thus, business needs should drive the credentialing process. To facilitate this, businesses need to speak with a common voice on the imperatives of credential requirements.In conclusion, the DC Chamber of Commerce’s vision for the 21st Century workforce inWashington DC is for government, business, education and community-based organizations tocollaborate and achieve a common objective: a workforce that has the skills businesses need tofill current and future job opportunities. Additionally, in this vision, nonprofits, school systems,community colleges and other institutions of higher learning teach students skills employerswant and issue credentials employers recognize. Community-based organizations shouldleverage their unique ability to remove barriers to employment and cultivate the skills needed tojoin the workforce. The public workforce system needs to provide the necessary resources tofund training and provide a mechanism to convene all relevant stakeholders on a regular basis.Supporting Sector Strategies in the District of Columbia 11