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The Future of Workforce Development

September 28, 2012

By Victoria Ogier

How is our workforce changing? What challenges are we going to face in the coming years? The Federal Reserve Bank of Kansas City and the Federal Reserve Bank of Atlanta recently sponsored a two-day conference on “The Future of Workforce Development” to explore these issues. Keynote speakers, experts and researchers discussed the changing worlds of economic and workforce development.


So what does our future workforce look like?

  • We have an aging workforce.
  • A growing number of Generation Y, millennials and digital natives are entering and changing the workforce.
  • We have an increasingly diverse workforce (especially among young Latino immigrants).
  • There is an intensifying need to better educate K-12 students and connect them to the employment world.


A recurring theme throughout the conference was education. The U.S. is lagging in education, with an average 31-percent dropout rate among high school students. Our demographics are changing rapidly as we are losing young people in the workforce and gaining 65-and-older workers. By 2018, we will see a net reduction in manufacturing jobs but will have approximately 2 million vacancies due to retirements.


On top of these future workforce trends, there are several economic challenges that will require employers to look at employment differently. Currently, many employers are paying lower wages, making it more difficult to get individuals — especially the long-term unemployed — back into good-paying jobs. In 1970, 95 percent of males with only a high school education had jobs, earning an average of $50,000 per year (in current dollars). By comparison, in 2010, only 75 percent of male high-school graduates had jobs and they earned an average of $26,000 per year.  According to futurist Glen Hiemstra, one in five adults currently work in low-wage jobs.


And what about entrepreneurship? Our fastest-growing entrepreneurship sector is in the information technology field; but even though our growing digital economy may create more wealth, it is creating wealth for fewer people.


Sounds pretty scary, doesn’t it? But the conference wasn’t all doom and gloom. There were also plenty of suggestions on how we can solve these problems:

  • We need to prepare workforce replacements. Train young adults for higher productivity to replace the baby boomers who will be retiring in the next 10 years or so.
  • Employers need to rethink hiring and pay more.
  • We need to take advantage of immigration to grow the workforce.
  • We need to create more entrepreneurship opportunities for people over the age of 50.
  • Young people need to better understand career options and connect to the employment world at a younger age.
  • We need a workforce system that responds quicker to employer needs. Employers often do not know what workforce needs they’ll have six months from now; they know what they need today.
  • We should consider opportunities to consolidate workforce operations and we need new workforce institutions for a new environment. As local Kansas City workforce investment board leader Clyde McQueen said, we need to “reconstitute the whole system.”
  • Regions need conveners at the local level to discuss system changes.
  • Economic development organizations need to look at how we are spending economic development resources to create new jobs. A recent study shows that on average we create 14 million new jobs a year. Of those, 66 percent are created in a location where a business currently existed; 32 percent are in new start-ups and only 2 percent are from companies relocating.
  • Create an educated population in STEM fields (science, technology, engineering and math) that will be attractive to companies. Employers like Boeing consider workforce a number-one priority when choosing locations. They look at the education pipeline starting at the third-grade level, because that is when students make decisions to go into math and science. They look at graduation rates, elementary activity and use of ACT WorkKeys (job skills assessment). “It is all about workforce, not incentives,” said Steve Hendrickson, director of government operations with The Boeing Company.


So what can the Kansas City region do to begin preparing a well-educated workforce? Is Kansas City facing these same changes in demographics locally? We’ll take a closer look at some of our local trends over the next couple of weeks and identify areas we need to focus our efforts.


The Mid-America Regional Council and other partners are working together through the Regional Workforce Intelligence Network. Visit for current labor market data and workforce news.



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