Budget cuts take bite from job training programs

  • Journeyman Lineman Stephen Horwatt talks to Denali Elementary School students about electrical safety at the Tom Cashen Electrical Training Facility. With state and federal budget cuts eating into job training programs, the private sector of employers and unions must find ways to replace aging skilled workers in Alaska’s major industries such as oil and gas, mining, and fishing. Photo/Courtesy/IBEW Local 1547

Budget cuts to state and university training programs have become a major concern for industry leaders who worry about the “graying” the workforce in Alaska’s key industries, and having enough future skilled workers. The concern is across-the-board, from oil and gas to mining, maritime, seafood — you name it.

The skilled-worker gap is actually a problem now, even with the state facing economic uncertainties.

“In many Alaska industries, from oil to mining, construction and health care, jobs remain difficult to fill due in part to a lack of qualified Alaska workers. All of these industries have challenges hiring in Alaska and must therefore recruit employees from outside the state,” Juneau-based McDowell Group, a consulting firm, wrote in a workforce report published this spring.

Meanwhile, the state Department of Labor and Workforce Development, which coordinates much of the state and federal money for training, has seen its budget cut sharply, from $33.4 million in state funds two years ago to $22.4 million in the current year, state Labor Commissioner Heidi Drygas said.

 State funds to three rural regional training centers, in Kotzebue, Nome and King Salmon have been cut sharply, as has money for the Alaska construction academies, which are in larger communities, Drygas said.

The rural training center cuts are particularly unfortunate, she said.

“These are areas with high chronic unemployment, and the training is focused mainly on jobs available in those region, like health care, construction and transportation, where workers now come mainly from other parts of the state,” Drygas said.

There are other funds available to these centers, which are operated by nonprofits, but the state funds provide a base for operations.

“They helped keep the doors open,” Drygas said.

For major employers, however, a worry is that the rollercoaster ride down of commodity prices in resources like oil and gas and minerals may discourage young people from pursuing training they’ll need for jobs that will sprout again when the commodity cycle turns up.

For example, there have been layoffs in petroleum and young people may see this as a sign that there’s no future in the industry, says Dave Rees, a retired BP workforce development manager who now chairs the Business/Education Compact, a forum for employers and people engaged in workforce development.

“Young people may be discouraged, thinking that there will be no jobs. That’s not true, because there will always be people needed to operate the oil fields,” he said. “It is estimated now that a substantial part of the North Slope operations workers will retire in the next 10 years,” he said.

The skilled technicians needed to replace those workers should now be in craft or university programs or taking classes in high school to get prepared, Rees said.

In its report, McDowell Group said 6,566 resident workers in the oil and gas industry are expected to reach retirement age in the next five to 10 years.  The trend is similar in mining, where 47 percent of mechanics, 51 percent of mining materials engineers and 65 percent of mining machine operators are 45 or older, McDowell Group said.

But even if young people are interested in careers in petroleum or mining they may see fewer opportunities for training due to reduced funding.

The process feeds on itself because fewer applications made to training providers, whether private, union or university, will force training administrators to shrink or even cancel programs. Translated, this means that when an upturn comes trained Alaska workers won’t be available.

Rees believes that employers will have to step into this void themselves, funding more entry-level preparation and basic workforce training.

“We won’t be seeing a lot of state or even federal funding in this new era of tighter budgets,” he said.

Entry-level career preparation and vocational schooling were functions traditionally provided in public education in high school or the university and previously, employers concerned themselves mainly with focused training once a new hire is on the job with a basic set of skills. Basic preparation was left to schools of various kinds.

This model is changing, however. Workplace technology is more complex, requiring proficiency in computers, math and communication, both verbal and written, as well as skills generally related to an occupational field. With budgets under stress, schools and the university may be less able to provide these.

The problem is nationwide.

“Across many industries and across the nation a lot of employers face shortages of skilled workers even with rising unemployment. Workers that are available don’t have the skills,” McDowell Group said in its report.

Alaska employers began waking up on this about 10 years ago, becoming more active in promoting career awareness in middle schools and vocational programs in high schools, and funding for advanced training in universities.

Employers in key technology industries, such as oil and mining, realized also that they had to cooperate and find ways to share information, which can be sensitive because companies’ views of future business and workforce needs are highly proprietary.

Training providers needed estimates of future needs because without these they couldn’t gear up to meet employers’ needs. At the same time students had to gain confidence there would be jobs in the end, or at least good chances, at the end of several years of training.

Ways were found to do this. One initiative, led by the oil and industry, was the Alaska Process Industry Careers Consortium, or APICC, an alliance of industries that operate plants using process controls, were formed to work together and with training providers.

APICC was formed to provide a mechanism for companies using process control technologies to work together, share information and work with training providers, and it has become a model for other industries. One outcome of the effort was creation by the University of Alaska of a two-year associate degree in process technology, which has been highly successful.

About 200 have been enrolled in the process technology program in recent years at three of the university’s campuses, with about 70 to 80 graduates per year. Most of the graduates were snapped up by various companies, many looking to replace retiring skilled operations staff.

APICC’s success spawned similar efforts in other industries such as in mining, where the human resources committee of the Alaska Miners Association is active. A maritime industry working group has been formed. Both are becoming involved in APICC, so that this organization could wind up serving several industries.

Organizations that can facilitate collaboration are good because companies, and even industries, have not been good at translating the demographics of their workforce into projections for future needs, Rees said.

“How many welders are we going to need? How many people in their 20s and 30s are now in training to replace retirees?” Rees asks. 

Getting data has been difficult.

One industry, health care, is considered better at projecting and recruiting for its needs for higher-level professionals like physicians and skilled nurses, Ress said, but even health providers face challenges in recruiting lower-skill workers including certain types of medical technicians and administrative workers.

One health care initiative was the successful nursing program at the University of Alaska Anchorage.

Individual companies have their own initiatives, meanwhile. Continental Motors, in Anchorage, has an active apprenticeship program in automotive maintenance. Another firm, Vigor Industries, operator of the Ketchikan Shipyard in Southeast Alaska, has its own training program in place and works with the local high school on a pre-apprentice vocational programs.

Calista Corp., the regional Alaska Native corporation for the Yukon-Kuskokwim Delta, is meanwhile developing a maritime-related apprenticeship program with transportation companies like Crowley and Lynden Transport, which supply fuel and other services in the region.

In another initiative employers in the technical industries, working through APICC, are identifying skills that are commonly needed across several industries. Once these are identified the available training funds can be focused, which could be  very efficient.

Training, meanwhile, does pay off and sometimes fairly quickly.

“A pipeline training program organized several years ago in Fairbanks by contractors provided training to 1,646 individuals and three years later 80 percent of these people were still working,” McDowell Group said in its report.

Wage income for these workers increased 30 percent, or a total of $13 million in new income after the training. the report said.

All employers also agree in encouraging career interest and readiness programs in schools, and volunteers from many companies spend time in classrooms talking about their industries.

“All employers encouraging schools to develop programs on work readiness,” like being timely, dressing appropriately and learning communication skills, said Cary-Ann Carty, APICC’s executive director.

The traditional vocational classes in many high schools have fallen victim to budget cuts but many school districts offer programs in centralized facilities, like King Career Center in Anchorage. APICC has further extended the idea by helping high schools and the university organized dual-credit classes in high schools where students can take certain classes and earn university credits toward an associate degree in process technology.

Alaska Resource Education, a nonprofit widely supported by industry, works in elementary and middle schools to promote children’s interest in science and technology, and plans to expand into the high school levels.

Rees said such career-awareness programs in schools pays dividends for employers because they help young people know if they are even interested in a field before starting training or apprenticeships.

“It’s very inefficient for everyone if a young person gets into training or an apprenticeship and then decides the field is not a good fit. It’s better to find this out before hand through career programs in schools,” he said.

Tim Bradner is a correspondent for the Journal. He can be reached at [email protected].


07/27/2016 - 1:20pm