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

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Page 1: Attracting And Retaining Talent   By Tom Stellman 2007

Attracting & Retaining Talent:

Can Texas Compete?

July 12, 2007

Tom Stellman

TEDC Conference – Amarillo, TX

Page 2: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 3: Attracting And Retaining Talent   By Tom Stellman 2007

Representative ClientsSuburban• 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

Page 5: Attracting And Retaining Talent   By Tom Stellman 2007

• 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

Theory Into Practice Planning Model

Page 6: Attracting And Retaining Talent   By Tom Stellman 2007

Talent and Quality of Place

Knowledge

Higher Wages

More Jobs

Buildings

2010

2000

1990

1970

1980

evolutionary scale

Evolution of Economic Development Goals

Page 7: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 9: Attracting And Retaining Talent   By Tom Stellman 2007

US manufacturing vs. services

14.417.8 17.3

58.6

20.2

55.0

0

10

20

30

40

50

60

70

1970 1975 1980 1985 1990 1995 2000 2005

(Em

ploym

ent in

millio

ns)

ManufacturingServices

Source: US Bureau Labor Statistics; Economy.com

Page 10: Attracting And Retaining Talent   By Tom Stellman 2007

US mfg: output vs. employment

$4,312

$4,145

$2,793

17,26617,695

14,378

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

1990 1992 1994 1996 1998 2000 2002 2004

(Out

put in

$bil

lions

- cu

rrent

doll

ars)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000(Em

ployment in thousands)Output

Employment

Source: US Bureau Labor Statistics; US Bureau of Economic Analysis; Economy.com

Page 11: Attracting And Retaining Talent   By Tom Stellman 2007

US Employment Forecast, 2006-2016

13%-3%-2%

16%-3%

8%12%

9%25%

28%5%

25%16%

4%

-5% 0% 5% 10% 15% 20% 25% 30%

TOTALNat. Resources & Mining

UtilitiesConstruction

ManufacturingWhl.Trade & Transportation

InformationFinancial Activities

Prof. & Business ServicesHealth Services

Retail tradeLeisure & Hospitality

Other ServicesGovernment

(percent change in jobs)

Source: Economy.com

US Employment Forecast 2006-2016

Page 12: Attracting And Retaining Talent   By Tom Stellman 2007

Share of All New Jobs in US, 2006-2016

28.1%

24.3%18.5%

31.8% Health Services

Prof. & Business Services

Leisure & Hospitality

All Other Sectors Combined

Source: Economy.com

Two-thirds of all new jobs from just three

major sectors.

Page 13: Attracting And Retaining Talent   By Tom Stellman 2007

Global Working Age Population

SOURCE: U.S. Bureau of the Census, International Database

popu

latio

n ag

e 15

-64

(in m

illio

ns)

0

20

40

60

80

100

120

1990 2000 2010 2020 2030 2040 2050

GermanyJapanRussia

UK

projection

Page 14: Attracting And Retaining Talent   By Tom Stellman 2007

US Working Age Population

SOURCE: U.S. Bureau of the Census, International Database

popu

latio

n ag

e 15

-64

(in m

illio

ns)

0

50

100

150

200

250

300

1990 2000 2010 2020 2030 2040 2050

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

Page 15: Attracting And Retaining Talent   By Tom Stellman 2007

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.

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

SOURCES: TIP Strategies; U.S. Census Bureau; U.S. Bureau of Economic Analysis

net c

hg in

pop

ulat

ion

age

18-6

4

Page 16: Attracting And Retaining Talent   By Tom Stellman 2007

Texas Labor ProjectionsSince 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

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

net c

hg in

pop

ulat

ion

age

18-6

4

Page 17: Attracting And Retaining Talent   By Tom Stellman 2007

0

25

50

75

100

125

150

175

200

225

1990 1995 2000 2005 2010 2015 2020 2025 2030

(in m

illion

s)

pre-Boomers (born before 1946)Baby Boomers (born 1946-1964)Generation X (born 1965-1977)Generation Y and beyond (born post-1977)

US Working Age Population by Generation

SOURCE: U.S. Bureau of the Census, projections based on 2000 Census

popu

latio

n ag

e 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

Page 18: Attracting And Retaining Talent   By Tom Stellman 2007

US Labor Force Participation by Gender

SOURCE: U.S. Bureau of Labor Statistics

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1950 1960 1970 1980 1990 2000

women

men

labo

r for

ce p

artic

ipat

ion

rate

(%)

Page 19: Attracting And Retaining Talent   By Tom Stellman 2007

US Bachelor’s Degrees by Gender

SOURCE: National Center for Education Statistics

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

women

men

Bac

helo

r’s d

egre

es c

onfe

rred

projection

Page 20: Attracting And Retaining Talent   By Tom Stellman 2007

0

5

10

15

20

1990 1995 2000 2005 2010 2015 2020 2025 2030

(in m

illion

s)

pre-Boomers (born before 1946)Baby Boomers (born 1946-1964)Generation X (born 1965-1977)Generation Y and beyond (born post-1977)

Texas Working Age Population by Generation

popu

latio

n ag

e 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

Page 21: Attracting And Retaining Talent   By Tom Stellman 2007

Texas Contribution to Net Population Growth

SOURCE: Texas State Data Center

6.5% 8.0% 10.0%

34.1%20.3% 12.7% 4.2%

10.3%

11.5%9.5%

5.6%

49.1%60.3% 67.7%

77.6%

12.6%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1980s 1990s 2000-2005 2005-2040

Asian & Other Anglo Black Hispanicco

ntrib

utio

n to

net

po

pula

tion

grow

th (%

)

Page 22: Attracting And Retaining Talent   By Tom Stellman 2007

Texas Educational Attainment 2005

SOURCE: U.S. Bureau of the Census, American Community Survey 2005

13.2% 9.5% 16.7%

45.0%33.8%

57.6%

65.0%

44.6%53.0%

32.9%18.3% 10.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Asian Anglo Black Hispanic

Bachelor's degree or higherHigh school diploma but less than a 4-year degreeNo high school diploma or GED

% o

f pop

ulat

ion

age

25+

Page 23: Attracting And Retaining Talent   By Tom Stellman 2007

Top "Exporters" (in thousands)

-53

-66

-238

-239

-278

-290

-330

-474

-951

-1,243

-1,500 -1,000 -500 0

Connecticut

Kansas

Ohio

Michigan

New Jersey

Massachusetts

Louisiana

Illinois

California

New York

Top "Importers"

1,222

541

452

378

347

318

167

160

130

125

0 500 1,000 1,500

Florida

Arizona

Texas

Georgia

North Carolina

Nevada

South Carolina

Tennessee

Washington

Virginia

Source: US Census Bureau

"Importers" & "Exporters" of Domestic Migrants, 2000-2006 Top & Bottom Ten States

Page 24: Attracting And Retaining Talent   By Tom Stellman 2007

Net Domestic Migration for All Texas Metro Areas, 2000-2006-50,000 0 50,000 100,000 150,000

Dallas-Fort WorthHouston

AustinMcAllen-Edinburg

TylerSherman-Denison

TexarkanaLongview

AmarilloMidland

WacoOdessa

Brownsville-HarlingenLubbockVictoria

San AngeloLaredo

Killeen-TempleAbilene

Corpus ChristiWichita Falls

College Station-BryanBeaumont-Port Arthur

El PasoSource: US Census Bureau

Page 25: Attracting And Retaining Talent   By Tom Stellman 2007

Population Change, 2000-2006 West Texas Metro Areas

7.2%

6.6%

5.2%

4.7%

0.0%

-1.4%

-4.0%

-6% -4% -2% 0% 2% 4% 6% 8%

Midland MSA

Amarillo MSA

Odessa MSA

Lubbock MSA

San Angelo MSA

Abilene MSA

Wichita Falls MSA

(Percent change in population)

Source: US Census Bureau

Page 26: Attracting And Retaining Talent   By Tom Stellman 2007

Net Change in Population from Domestic Migration, 2000-2006 West Texas Metro Areas

1,842

1,623

-2,175

-3,340

-3,770

-7,320

-9,885

-12,000 -10,000 -8,000 -6,000 -4,000 -2,000 0 2,000 4,000

Amarillo MSA

Midland MSA

Odessa MSA

Lubbock MSA

San Angelo MSA

Abilene MSA

Wichita Falls MSA

Source: US Census Bureau

Page 27: Attracting And Retaining Talent   By Tom Stellman 2007

Components of Population Change in West Texas Metros, 2000-2006 Ranked by Percent Change

Total Change Natural Increase Migration

# % Births Deaths Int’l Domestic

Midland MSA 8,371 7.2% 11,716 -5,731 1,186 1,623

Amarillo MSA 14,993 6.6% 23,226 -12,762 3,515 1,842

Odessa MSA 6,339 5.2% 14,152 -6,679 1,416 -2,175

Lubbock MSA 11,711 4.7% 25,551 -12,719 1,961 -3,340

San Angelo MSA -29 0.0% 10,036 -6,370 434 -3,770

Abilene MSA -2,182 -1.4% 14,775 -9,617 490 -7,320

Wichita Falls MSA -5,996 -4.0% 13,208 -9,195 381 -9,885

Source: US Census Bureau

Page 28: Attracting And Retaining Talent   By Tom Stellman 2007

Growth in China• Low cost competitor? • Yes, but also

competing for:– Investment– Resources– Talent

Page 30: Attracting And Retaining Talent   By Tom Stellman 2007

Foreign National Engineering Degrees (% of graduates)

0%

10%

20%

30%

40%

50%

60%

70%

80%

TX NY FL CA MA

Masters

PhD

Page 31: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 32: Attracting And Retaining Talent   By Tom Stellman 2007

“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.”

Page 33: Attracting And Retaining Talent   By Tom Stellman 2007

• 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

Page 34: Attracting And Retaining Talent   By Tom Stellman 2007

• 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

Page 35: Attracting And Retaining Talent   By Tom Stellman 2007

The War for Talent

*by Ed Michaels, Helen Handfield-Jones, & Beth AxelrodHarvard Business School Press - 2001

The Old Reality The New RealityPeople need companies Companies need people

Machines, capital, and geography are the competitive advantage

Talented people are the competitive advantage

Better talent makes some difference

Better talent makes a huge difference

Jobs are scarce Talented people are scarce

Employees are loyal and jobs are secure

People are mobile and their commitment is short term

People accept the standard package they are offered

People demand much more

Page 36: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 37: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 38: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 39: Attracting And Retaining Talent   By Tom Stellman 2007

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 accomplishmentSource: Mary Alice Burkhart - Austin Peay State University

Page 40: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 41: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 44: Attracting And Retaining Talent   By Tom Stellman 2007

• 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.

Page 46: Attracting And Retaining Talent   By Tom Stellman 2007

Greater Killeen AreaOPERATION ECONOMIC TRANSFORMATION

A BLUEPRINT FOR ADVANCING ECONOMIC OPPORTUNITIES IN THE FORT HOOD REGION

Veterans Inventory

Page 47: Attracting And Retaining Talent   By Tom Stellman 2007

1. How many years of service do you possess?

2 or less 11 to 15 3 to 5 16 to 19

6 to 10 20+ 2. What is your reason for leaving the military?

Retirement ETS/Chapter 3. Are you planning to stay in the region (within 30 miles of Fort Hood) after your service ends?

Yes No Don’t know 4. Would you be willing to remain in the region if adequate employment were available?

Yes No Don’t know 5. What is your MOS Code? _________ 6. What is your highest level of education completed?

High School/GED Associates Degree Masters Degree Some College Bachelors Degree Ph.D.

7. Please indicate any technical/professional skills you possess?

General Computer Finance Medical Advanced Computer Administrative Communications

Management Construction Electronics Mechanical Transportation/Logistics Law Enforcement

8. What type of post-military employment do YOU desire?

Aviation Construction Maintenance/Repair Business/Finance Education Manufacturing

Computer/Software Healthcare Office/Administrative Communications Law Enforcement Transportation/Logistics

9. If married, what type of employment does your SPOUSE desire?

Aviation Construction Maintenance/Repair Business/Finance Education Manufacturing

Computer/Software Healthcare Office/Administrative Communications Law Enforcement Transportation/Logistics

10. Improvements in which other areas would positively affect your decision to remain in the region?

Higher Education Offerings Housing Child Care Healthcare

Retail/Shopping Entertainment/Recreation Other __________________________

SURVEY OF POST-MILITARY SERVICE INTENT

Page 48: Attracting And Retaining Talent   By Tom Stellman 2007

43% 41%

16%

0%5%

10%15%20%25%30%35%40%45%

Yes No Don't Know

All Respondents

Are you planning to stay in the region (within 30 miles of Fort Hood) after your service ends?

Page 49: Attracting And Retaining Talent   By Tom Stellman 2007

64%

23%

13%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No Don't Know

All Respondents

Would you be willing to remain in the region if adequate employment were available?

Page 50: Attracting And Retaining Talent   By Tom Stellman 2007

3%7%

8%

4%

11%

4%

13%

3%

9%

18%

5%

15%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

All Respondents

General Computer

Advanced Computer

Management

Mechanical

Finance

Administrative

Construction

Transportation/Logistics

Medical

Communications

Electronics

Law Enforcement

Please indicate any technical/professional skills you possess?

Page 51: Attracting And Retaining Talent   By Tom Stellman 2007

Quality of Place Factors

Page 52: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 53: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 54: Attracting And Retaining Talent   By Tom Stellman 2007

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.

Page 55: Attracting And Retaining Talent   By Tom Stellman 2007

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

Page 56: Attracting And Retaining Talent   By Tom Stellman 2007

Yes, but we have much work ahead…1. Anticipate a tight labor force in the coming

years2. Adapt to (and learn from) the needs of Gen Y3. Recognize that women may be our best

underutilized human resource in the competitive years ahead

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

Can Texas Compete?

Page 57: Attracting And Retaining Talent   By Tom Stellman 2007

7000 N. MoPac, Ste. 305Austin, TX 78731

512.343.9113 tel512.343.9190 fax

www.TIPstrategies.com

Thank you

TIP Strategies, Inc.<<Theory Into Practice>>