Report shows 'leaking talent pipeline' in Indiana

Nov. 30—SOUTHERN INDIANA — Improving the talent pipeline through increased post-secondary attainment is among the challenges facing the Southern Indiana region, according to Uric Dufrene, Sanders Chair in Business at Indiana University Southeast.

A recent report from the Indiana Chamber of Commerce says the state is facing a "leaking talent pipeline" when it comes to its workforce, and the report describes a need to improve postsecondary educational attainment levels and workforce participation rates across Indiana.

"We hear it from employers, and we see it in virtually every education and workforce statistic," Indiana Chamber President and CEO Kevin Brinegar said in a Tuesday news release. "It's that Indiana has a massively leaking talent pipeline."

Dufrene said on the regional level, he sees a need to instill a "culture of post-secondary education" to boost economic development, whether people are receiving certificates, 2-year degrees or 4-year degrees.

The Indiana Chamber of Commerce's report shows that just over half of Indiana residents ages 20 to 65 with only a high school diploma are employed, and more than 60% of those without a high school diploma are not participating in the workforce.

Across the country, workforce participation for those without a high school diploma declined by 2.2% since the start of the pandemic, and participation for those with only a high school diploma declined by 2.1%, according to data from the Bureau of Labor Statistics. In comparison, the decline was only 0.1% for those with a bachelor's degree and 1.5% for those with some college experience.

Dufrene said these statistics show the importance of education and skill development for the labor market, saying the demand for education and credentials "only accelerated after COVID compared to pre-COVID."

"I think it speaks to the importance of skills and education for the jobs of tomorrow, and it's certainly critical today," he said.

In June, the Indiana Commission for Higher Education released a report showing that only 53% of high school graduates pursued higher education or post-secondary training in 2020, a 6% decline from the previous year. Indiana's college-going rate has declined each year since 2015, when about 65% of high school graduates pursued college.

IUS enrollment has also declined over the past decade. However, the campus has seen increases in graduation rates, and more than 80% of IUS graduates remain in the region, Dufrene said.

"IU Southeast and other education providers in the region are in essence a talent pipeline," he said.

According to Dufrene, it is important to "grow local talent" through post-secondary credentials, as well as attract talent from the outside. He feels the region is succeeding in terms of quality of life and quality of place initiatives that bring people to live and work in Southern Indiana.

The Indiana Chamber of Commerce's report shows that the state's workforce participation is lower than it was before the pandemic, and there are twice as many job openings in the state as there are people seeking jobs.

In Southern Indiana, the labor force participation rate is actually at higher levels now than it was at the start of the pandemic, and Southern Indiana has seen strong job growth, Dufrene said. The region has recovered jobs lost during the pandemic and added an extra 10,000 compared to pre-pandemic levels.

Wendy Dant Chesser, president and CEO of One Southern Indiana, said she does not think Southern Indiana is necessarily facing a "leaky pipeline," since many who attend local higher education institutions such as IUS and Ivy Tech Sellersburg are staying in the area.

She said the workforce challenges Southern Indiana is facing today "are not different from the challenges we've seen over the past 10 years — they're just greater." She noted that supply and demand issues are a major factor.

"There have been more jobs added to the payroll in Southern Indiana than population growth, so it's a math problem," Chesser said. "The demand is growing faster than the supply is growing."

Chesser said education offers a "direct correlation to opportunities for employment and fulfillment," and she noted the variety of educational options and resources in Southern Indiana.

She also notes that there is a broad array of personal reasons why a person may choose not to participate in the workforce, including staying home to care for children or an aging family member.

Tony Waterson, president and CEO of Southern Indiana Works, emphasizes the need to look at the "bi-state footprint" in the Kentuckiana region. Southern Indiana Works is focused on workforce development in Clark, Floyd, Harrison, Crawford, Scott and Washington counties in Indiana.

Although workforce participation has increased in Southern Indiana, Waterson notes that Southern Indiana is seeing slower recovery in low-wage sectors, Watterson said.

"When you look at the jobs that are paying less than $14 an hour, they have been slower to rebound," he said.

Waterson said a local decline in postsecondary enrollment is a factor in workforce participation, but he notes that employers and job seekers are facing challenges beyond just educational attainment and talent development.

"The barriers certainly [include] skills gaps, but also the dynamics of child care, transportation and digital access — those were kind of exacerbated by the pandemic, and now as inflation continues and the economy is sluggish...those things are really taking hold," he said. "Those also need to be addressed along with skilling up the workforce."

The Indiana Chamber of Commerce's report states that "bold action" is needed and that the state "cannot compete effectively in a talent-driven global economy with our status quo."

"We first should concentrate our policy focus and state resources on improving the outcomes and skills of those at the bottom end of the educational attainment scale," Brinegar said in the release. "That's one of the very best ways to improve our overall workforce participation rate and fill the open jobs we have."

According to Brinegar, the chamber has shared the "Indiana's Leaking Pipeline" report with Gov. Eric Holcomb, the governor's workforce cabinet and legislators. The report identifies several ways of improving postsecondary outcomes.

One of the recommendations from the Indiana Chamber is to increase participation in programs such as the Free Application for Student Aid (FASFA) and 21st Century Scholars.

The report shows that Indiana has one of the lowest rates of FASFA completion in the country. The state has a 43.9% completion rate compared to a national average of 57%.

The 21st Century Scholars program provides free college tuition for students with low-income who graduate from college and complete the required activities, but in Indiana, participation is less than 40% for income-eligible students.

In addition, less than half of the Indiana students enrolled in 21st Century Scholars complete the activities needed to receive the scholarship.

The Indiana Chamber is suggesting that filling out the FASFA form be a requirement for graduating high school, and Brinegar recommends that all qualified students "be made aware and automatically enrolled" in 21st Century Scholars.

The Indiana Chamber of Commerce also outlines goals such as improving early learning opportunities across Indiana and addressing learning gaps that have occurred in recent years. It also calls for increased career exploration and work-based learning for middle and high schools students.

Dufrene said at IUS, there has been a major focus on work-based learning through the university's Employer Connect program, which allows for opportunities such as internships.

"Through work-based learning opportunities such as internships, we are really able to develop a talent pipeline," he said. "Many internships ultimately end as permanent employment, and students are retained after graduation. It's a great opportunity for employers and a tremendous learning opportunity for students."

Waterson said he wants to see a holistic approach to the topic of workforce participation, "whether it's resources to overcome barriers or [creating] vibrant communities." Southern Indiana Works has provided services to connect employers with job seekers who may struggle to enter the workforce, including people with disabilities and people in recovery from addiction.

Southern Indiana Works also provides digital literacy programs to help people learn the skills they need in the workforce and training programs to help workers "skill up," he said.

"Our workforce and workforce needs are complex problems that we are and have been addressing," Waterson said. "I think if you look at what has occurred since COVID is that we've really been able to mobilize and assist a number of folks in getting employment and help businesses be able to find those job seekers."