Kentucky spends hundreds of millions of dollars training workers each year, but it's not getting the job done for employers, says a new report from the Kentucky Chamber of Commerce.
The problems are numerous, ranging from recent controversies over management and control of workforce funding to finding enough employees who are drug-free. The problems are so severe that the report recommends an immediate review of the entire system when the next governor takes office in December.
Five years ago, Kentucky employers were most worried about the economy and the new health care law, but today, "workforce has emerged as the top concern among most employers large and small in Kentucky," Chamber president Dave Adkisson said. "We found a significant amount of confusion and frustration, and we found a maze of federal and state programs that are hard for businesses to navigate, particularly small businesses."
In a survey of employers, only 8 percent said they were satisfied with the skill level of the state's workforce. Ten percent said employees had good overall skills but needed retraining for specific technical jobs.
Adkisson said he has met with Republican gubernatorial candidate Matt Bevin and has scheduled a meeting with Bevin's Democratic rival, state Attorney General Jack Conway, to discuss the matter.
A spokesman for Conway's campaign said Tuesday that Conway would support a review.
"Jack Conway's top priority is growing Kentucky's economy and creating good-paying jobs, and a top-to-bottom review of Kentucky's job-training programs is an important part of that to ensure workers have the skills they need for the jobs of the future," spokesman Daniel Kemp said.
Bevin's campaign did not respond to a request for comment.
Gov. Steve Beshear asked the Finance and Administration Cabinet this year to audit workforce training programs administered by the Education and Workforce Development Cabinet. That audit request was prompted in part by citizen complaints and another report by state Auditor Adam Edelen that questioned whether the workforce cabinet was charging staff time to the wrong federal workforce grants. Education and Workforce Development administers approximately $47 million in federal workforce training dollars.
Pamela Trautner, a spokeswoman for the Finance and Administration Cabinet, said Wednesday that the audit was continuing and that a completion date had not been determined.
Beshear said Wednesday that he appreciated the Chamber's engagement on the issue and that his "highest priority is to build a workforce in Kentucky that companies cannot wait to hire."
The Chamber's report identifies 39 local, state and federal programs for workforce development that spend about $900 million annually, although that includes state appropriations for the entire Kentucky Community and Technical College System, which by statute is charged with workforce training.
Many of those programs are administered through regional workforce investment boards, which are mostly run by local area development districts. However, an audit of the Bluegrass Area Development Board showed that its board members exerted disproportionate control over workforce board members and budgets. Under new state and federal rules, regional workforce boards will have to conduct competitive bidding before hiring managers and workforce service providers.
"That should help provide some new accountability," Adkisson said, but the report also recommends that Kentucky adopt what's called an "asset map" to identify all funding sources and provide a framework for showing whether those programs work.
"Another critical piece for the employer community is, what's the return on investment?" said Diana Taylor, senior policy analyst for the Chamber. "In some cases it's clear; in other places it's not. An asset map shows: Here's the money, here's where it's being spent, here are the outcomes and results."
The report also surveyed about 480 large and small employers and asked them their opinions of the state's workforce. About 27 percent said they have trouble finding people with good "soft skills," which include personal responsibility, communication and an ability to work well with others. Twenty-three percent have trouble finding people with the right technical skills, 17 percent identified a generational difference in work ethics, and 15 percent said potential employees could not pass a drug test.
"You can train them with best possible skills, but if they can't pass a drug test, it's all for nothing," Taylor said.
The report calls on the state to incorporate drug screening into the application for workforce training programs. That's allowed under federal law and is used by some other states but not n Kentucky, Taylor said.
The report also recommended that local chambers of commerce have a bigger role in appointing members to regional workforce boards, and state workforce officials and business leaders need to make sure employers are more involved in local workforce boards and their plans.
Kim Menke, director of external affairs and government relations for Toyota Motor Engineering and Manufacturing, said that in past years, many business leaders became frustrated that their needs weren't being met and left regional workforce investment boards.
"We were talking at each other, but we weren't listening to each other," Menke said.
Workforce trainers and business leaders can work together, Menke said.
After struggling to find skilled employees who understood advanced manufacturing, Toyota and Bluegrass Community and Technical College teamed up to start an advanced-manufacturing degree. Students in the program, now in its fifth year, attend classes to learn skills two days a week and work three days a week at a manufacturing plant. The concept has proven so successful it is being duplicated in other parts of the state and in other states with Toyota manufacturing plants.
"We've expanded it to include other manufacturers," Menke said. "This is one example of what works when business and education collaborate."
The report also looks at education as a critical piece to workforce development, including putting "soft skill" preparation into K-12 and higher-education curriculums, and expanding early-childhood programs.
"The business community has consistently, at least for five years, been calling for better, more strategic investments in early childhood," Adkisson said. "There's a better return on investment if you put money into early childhood and avoid costs on the back end."