Homegrown Talent

With an aging workforce and significant expected job growth, a Midwest city taps a broad range of partners for a full-court press to train and recruit workers. Also, an enthusiastic take on tech training from a rapidly expanding innovation hub in Brazil. (If this newsletter was forwarded to you, subscribe here.)

Amplifier and Connector on Workforce

Jobs were scarce in Dayton, Ohio, after the Great Recession. When unemployment crested to nearly 13% in 2010, the region had just 12 open jobs for every 101 unemployed residents.

Now Dayton faces the opposite challenge, with almost twice as many unfilled jobs as unemployed residents—a labor shortage that’s conservatively projected to reach 59K open positions by 2030. That scenario would mean an estimated $6B or 6% hit to the regional GDP.

The Employers’ Workforce Coalition has been sounding the alarm about the potential workforce crisis while also tapping a broad range of partners to develop creative solutions for training and recruiting workers.

“We have to realize some blunt realities,” says Joe Sciabica, the coalition’s executive director. “I don’t believe employers have woken up to this yet.”

Dayton’s workforce challenges aren’t unique in Ohio or the broader region. At the statewide level, JobsOhio recently rolled out a relocation incentive that offers employers in targeted industries across the state $15K for each qualifying out-of-state STEM or technical hire they bring to Ohio.

However, the metro area of 815K residents has long been a national bellwether. What happens in Dayton over the next few years could be a fair representation of how much of the industrial heartland fares in trying to keep pace with a rapidly transforming labor market. (I grew up in a Dayton suburb, BTW.)

The region has an aging population and declining labor-force participation that roughly mirrors the 62.3% national rate, an indicator where the U.S. lags and is sliding compared to other wealthy countries, alarming policymakers on both sides of the aisle. 

Immigration policy also isn’t helping the Dayton region’s workforce challenge, which includes Springfield, say Sciabica and many other observers.

However, much of the projected talent gap is due to recent success, including more than $7B in capital investment during the last three years. For example, GM is spending nearly $1B to expand a diesel engine plant while Joby Aviation says it will spend up to $500M on an aircraft production facility that could create up to 2K jobs.

Overcoming the stigma of jobs in manufacturing remains a challenge. The Employers’ Workforce Coalition is trying to shine a light on career opportunities in the sector, says Sciabica, who previously held leadership roles across U.S. Air Force engineering and technical management. And he stresses that those careers are far better than gig economy jobs.

Homegrown talent will be the biggest part of the solution to the 59K labor gap. So the coalition, which was convened two years ago by the Dayton Foundation, is working on strategies to increase worker retention and labor participation. That includes serving as a concierge—a regional amplifier and connector—for projects that boost upskilling, apprenticeships, work-based learning, career coaching, and short-term credential production.

“It’s about building a constituency of employers who are supportive,” says Dan Foley, a former county commissioner who is a coalition fellow.

The group has plenty to build on, Foley and Sciabica say. For example, they point to United Grinding’s apprenticeship program and Sinclair Community College’s extensive and nationally recognized approach to correctional education.

Yet the group also is breaking new ground, including efforts to recruit workers from outside the state. One of the most promising projects has begun placing nurses from Puerto Rico in local hospitals. The coalition has worked to help the nurses get settled in Dayton and plans to ramp up the program.

A full-court press is needed to make a dent in the talent gap, which soon could lead to ripple effects across Dayton. For example, Sciabica and other observers predict that poaching of employees will be an increasing problem for the region and the state, one that will hit smaller firms the hardest. 

Getting HR divisions to recognize the scope of the challenge is a big part of the coalition’s work.

The Kicker: “They have been forever in a period of abundance,” Sciabica says. “It’s going to be a labor war for sure.”

Selling the Dream of Transforming Lives

The southern Brazilian state of Rio Grande do Sul is also wrestling with an aging population and a serious skills gap. Those challenges could limit the state’s participation in Brazil’s booming digital economy, which includes thriving fintech, AI, and startup scenes.

“We are the state that’s getting older faster,” Raquel Teixeira, Rio Grande do Sul’s education secretary, said earlier this month. “We need young people to be able to solve all the problems that we face.”

Teixeira was speaking at an event hosted by Instituto Caldeira, a tech innovation hub in Porto Alegre, the state’s capital and biggest city. I’ve written previously about Caldeira, which connects corporations, startups, universities, foundations, and state government. More than 2K people work each day in the former textile-manufacturing facility, where hundreds of students get free tech training, a stipend, and work experience.

The hub’s tech education push is about responding to hundreds of local companies that were unable to grow due to a lack of available talent, says Felipe Amaral, director of the institute’s Campus Caldeira. 

“Based on this need, we created a series of programs to identify, train, and employ thousands of young people from underserved backgrounds within the new economy,” he says. “We’re not creating something new. We’re replicating what works in other places.”

Philanthropy has played a crucial role in the growth of Caldeira, which opened in 2021. Its sponsors include locally based companies and foundations, including the philanthropic arm of Gerdau, a global steel producer.

U.S.-based Big Tech companies also are backers of the innovation hub’s training programs. Caldeira’s education partners include AWS, IBM, Microsoft, Nvidia, Oracle, and Salesforce, which during the event announced a $250K donation to expand the hub’s AI-related upskilling opportunities.

IBM has committed to training 2M learners globally in AI by the end of next year. That effort is part of a broader goal of training 30M people in tech skills by 2030.

The company’s collaboration with Instituto Caldeira reflects a shift toward essential AI skills in tech training, says Lydia Logan, IBM’s VP of global education and workforce development. “Every student, regardless of their path, earns an IBM SkillsBuild AI Fundamentals credential and explores key topics like generative AI, AI ethics, and prompt writing.”

While Caldeira in some ways resembles regionally focused tech training partnerships in the U.S., the hub brings together an unusual range of partners—a deep connection with local public schools, for example. The urgency of the work was palpable during the gathering, which pulled in 16K people and had a SXSW vibe.

“This global connection is so important for our state and for opening up future prospects,” said Eduardo Leite, the governor of Rio Grande do Sul and a potential presidential candidate. 

The location itself was part of the spectacle. Caldeira is expanding across warehouses and buildings in a former manufacturing district, and several of the spaces are operating while still under construction—and doing it with flare. The hub is named for two preserved coal-fired boilers that the former textile plant’s founder, A.J. Renner, brought over from Scotland a century ago and used to power parts of the city beyond the complex. 

Last year, Porto Alegre was hit by Brazil’s worst floods in over 80 years. The water was above head level across Caldeira and most of the city. Yet the facility was back in action and better than ever in just months, a pace that would be ludicrous to expect in the U.S.

Strong demand is driving Instituto Caldeira’s rise, says Amaral, among both the thousands of students who apply for training slots and the hundreds of companies that view the hub as a boost for their bottom line.

“We sell the dream to transform the lives of young people,” says Amaral.

Open Tabs

Warehouse Robots
Internal documents show that Amazon plans to automate 75% of its operations, potentially reducing the need for 600K new workers by 2033, Karen Weise reports for The New York Times. A Georgia warehouse could see a reduction of up to 1,200 workers. However, technician roles managing robots at Amazon’s advanced warehouses likely would pay more, and the company says roughly 5K people have gone through the company’s mechatronics apprenticeship since 2019.

Short-Term Credentials
Many details still need to be worked out on Workforce Pell, which is set to go into effect next July, writes the National Skills Coalition. But state leaders should be working now to prepare, including by setting the table to identify eligible programs and establishing data-sharing practices. Alabama is ahead of the curve in preparing, write Nathaniel Rankin and Amber Garrison Duncan, citing the state’s competency-driven ecosystem and the Alabama Talent Triad.

AI and Labor
Saying that AI poses an “existential threat to workers, the public, and humanity,” the AFL-CIO released a set of principles for the technology’s use in the workforce. The labor federation cited the potential for serious AI-fueled job displacement and called for the development of joint labor-management partnerships and high-quality job-training programs, including registered apprenticeships, that should be used when developing AI workforce training.

AI-Resistant Jobs
Skilled technical jobs that rely on human judgment and are hard for machines to replicate will be a “safe center” from displacement due to AI, says Matt Sigelman, president of the Burning Glass Institute, in an interview published in a newsletter from Allison Salisbury. Yet workforce training for these occupations is severely underfunded and often ineffective, Sigelman says. One solution is focusing more on skill adjacencies to help low-paid workers move into better jobs.

Wages in Healthcare
Intensive healthcare training programs in California that result in associate degrees offer high economic returns, including for registered nurses and dental hygienists, finds the Public Policy Institute of California. Shorter-term training for nurses or medical assistants does not tend to lead to significant wage gains. The shorter programs offer the possibility of pursuing more education and training, but few people seem to take advantage of those stepping-stones to higher-paying jobs.

Notable Gifts
A $3M award from the Blackstone Charitable Foundation seeks to increase access to training and workforce development in the Phoenix area, with a focus on construction and advanced manufacturing. Blackstone Skilled Futures will be developed in partnership with Arizona State University, Maricopa Community Colleges, and local nonprofits.

Google.org announced a $2M award to the National Applied AI Consortium, a national initiative led by Miami Dade College with Houston City College and Maricopa Community Colleges. The funding will support the consortium’s mentorship network, professional certifications for instructors, and the NAAIC AI Summit.

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