By: Rachel Madison
A business conference held by the Round Rock Chamber in late October focused on a variety of current hot topics centered around the greater Austin and Round Rock area’s current and future workforce and economy, and what that means for the future of the area. Read on to find out what experts had to say about the future focus of Central Texas.
State of the Central Texas Economy and Future Trends
Dr. Ray Perryman, president and CEO of The Perryman Group, an economic research and analysis firm based in Waco, shared his insight on current and future economic trends in the Central Texas region. The current economy is obviously affected by the pandemic, he said.
“To get to anything even close to this, we have to go back to the Spanish flu pandemic,” he said. “From what we know to date, that was a much worse pandemic than this one. But there’s not a lot to help us as a lens as to what might happen. In 1918, we were not a major world power, the Federal Reserve System was only five years old, and we didn’t know a lot about economic policy. It was a very different time from what we’re seeing today.”
Normally when the United States experiences a recession, it’s because of a “structural problem in the economy that we’ve brought on ourselves,” Perryman said, adding that the housing crisis was part of the last recession, and before that it was the dot-com pricing as the internet was beginning to take off.
“Because we’ve been going for 10 years and we have no structural problems in the economy, it’s not one of those situations this time around, and that’s a good thing,” Perryman said. “If we keep the structure together, we can come back from this quickly. This is a health crisis that started an economic crisis, and we can’t get a handle on the economy until we get a handle on health. We don’t know exactly what that will look like yet.”
Perryman added that the world is so integrated right now, that even if the virus hadn’t gotten to the United States, it still would have had a big economic disruption. Before the virus hit the greater Austin and Round Rock areas, it disrupted the oil industry in Texas, and then brought a big hit to the tourism and hospitality industries, he said.
“The global demand for oil dropped over 25 percent percent in less than 30 days, and that showed the world was shutting down,” Perryman added. “And now the virus has lasted longer than we thought it would. Texas has lost $75 billion of gross product and 550,000 jobs. In Austin, we’ve lost about $5.88 billion of gross product and 55,000 jobs. But we think there will be a strong comeback next year.”
Perryman estimates it’ll take about two years for the economy to totally recover, but he expects gross product number to rise in 2021 and jobs to be back at the levels they were pre-pandemic by early 2022. Looking at the long-term forecast paints an optimistic picture, Perryman added.
“We will continue to grow and prosper as a country and world, but patterns are likely to be different,” he said. “For example, we know there was already a major trend toward online retailing, but obviously this year that went up a lot all of a sudden. Some of that will pull back, but we’ve increased the speed of that transition to some extent. Traditional stores will have to respond and give better online and in person experiences.”
Real estate and construction are other industries that will continue to thrive in the future, as well as technology and economic development, Perryman said.
“All the things that mattered before will still matter, but our priorities will change,” he added. “Quality of school system and health systems will be more important than ever, and onshoring or reshoring will be a big thing, as some manufacturing will be coming back to the U.S.”
Overall, Perryman said the fundamental demographics of the country haven’t changed, and the cost factor over the years hasn’t changed dramatically, which means a lot of patterns seen before will come back, just in different ways.
“The challenges we face are still there, but the pandemic gave us perspective on some of them,” he said. “We will come back from this once the health crisis is under control, and I think a lot more rapidly than you think we will. We have a resilient economy and an economy that innovates. That’s been the core of our country for a long time.”
The Future of Workforce and its Impact on Economic Opportunity
The biggest competitive conundrum the United States is facing today is workforce, according to Ted Abernathy, managing partner of Economic Leadership LLC, a consultancy that works to develop economic and workforce strategies.
“One of the top issues for every [industry] is workforce,” he said. “A top factor for location decisions for companies is if there is enough skilled labor and competitiveness of labor, and a strong quality of life for employees. That’s what allows companies to be successful.”
Because this issue is such an important one that spans every industry, Abernathy said solutions to finding a skilled, competitive workforce are what most companies are looking to fix, but that’s not always an easy process.
“There are too many moving parts for it to be a simple fix,” he said. “We hear everywhere that our workers need better skills, so how do we do that?”
Abernathy added that many companies get stuck on just teaching job skills—the skills needed for each specific occupation—but workers need many more skills than just on-the-job knowledge.
“The first skills you need include basic knowledge, like reading and writing,” he said. “You also need life skills, like responsibility, self-motivation, and those things that are part of what determines how you do at work and how you live life. You also need work skills, like problem solving and knowing how to work in teams. Basic work skills transfer across all types of occupations.”
Each of these skill sets is equally important, Abernathy added, and the way a company or community addresses each of these skill sets will set workers and future workers on specific learning paths.
“We need to build a good talent pipeline in the community, and it starts out really early,” he said. “By the time kids are in kindergarten, their work skills and life skills have already been seeded.”
That’s why it’s important to work on growing a talented workforce from the very beginning, Abernathy added, by assessing where each community or company’s strengths and weaknesses are and going from there to make improvements. There are several workforce trends he expects to see in the future, due to economic and pandemic-based developments, that can help organizations decide the best skills to focus on for their future workforce.
The first trend is “remote everything,” Abernathy said, meaning people will use technology to do everything from get an education to order groceries. Relocations is the second trend, because the United States is growing so quickly. For the last decade, the workforce has been shifting from big cities, due to cost, and moving to midsize cities that are more affordable.
The third trend is robots, which will be emphasized more in America than ever before in the future, Abernathy said. This will change the workforce dramatically because robots aren’t subject to stay-at-home orders. The final trend is the reserve workforce, or those who are available for on-demand projects and part-time or temporary work.
Because of these trends, Abernathy said the future of education is also changing, and children at much younger ages will be learning more job-centric skills.
“Change in our workforce is accelerating, and competition across the country is increasing for workers and companies,” he said. “Serendipity is not a strategy. You have to be aggressive about your workforce and remember it’s a team sport.”
Panel Discussion on the Future of Workforce
During the event, a panel of local experts weighed in with their thoughts on the future of workforce in the Central Texas area.
Aaron Demerson, commissioner for the Texas Workforce Commission, led the conversation. Amy Atsumi, vice president of human resources for Dell Technologies; Sarah Beadle, vice president of brand marketing and communications at Emerson Automation Solutions; and Scott Staton, senior manager of operations at TDIndustries, Inc., each provided insight on everything from how to fill the talent pipeline to promoting diversity in the workplace.
Demerson: Nobody would have predicted manufacturing would be automated, or social media platforms would be such a big part of our workforce. How can companies and academic institutions prepare for changes ahead?
Atsumi: Technology is moving faster than we realize. Future workforce skills are not just about technological acumen, but also about speed, agility, relevancy and a lot of personalization. Society wants a voice and personalization, and customers want that for their products and services in their industries as well.
Beadle: People hear automation and get scared of the impact it has to humans. Automation drives improvements in the world. It’s just going to change the skill sets and kinds of jobs, by taking away menial or repetitive tasks. In the future, skills have to be enhanced to include more technical abilities and knowledge in the software space.
Staton: The construction part itself is going toward 3D models, making it easy to do prefab and modularization off site. We’re getting bodies off site and into controlled environments.
Demerson: When there are not enough talented workers, how do companies plan to fill the talent pipeline?
Atsumi: There will be 1.1 million computing related jobs by 2024. It’s not just a United States issue, it’s a worldwide issue. One thing we’re doing is getting creative. We’re working with schools and universities to create talent pools early on by partnering and influencing the curriculum and doing reskilling programs. We’re building more of a STEM pipeline into the future workforce. We’re also looking at how we can continue to employ remote-based team members. We’re also bringing in internships and opportunities to work with companies like Dell and turning those into multiyear rotational programs so people are developing those skills in early years.
Beadle: We do a lot of partnering with universities in Texas and nationwide. Internships, even throughout COVID, have remained robust. That’s got to continue. It’s going to be a little more challenging to assess and interview candidates and do virtual internships. It’s going to be a little different, but we’re making it work. It’s giving young workers a good experience to understand what is needed in the future.
Staton: We as businesses and institutions needs to do better at getting options in front of students earlier so they know what they want to do. College isn’t nearly as important as it used to be. High school students can learn job site skills and graduate ready to go. We’ve partnered with Round Rock Independent School District and Austin Community College on apprenticeship programs. These are extended internships programs through the schools that give students experience earlier. This way they are ready to go when they come out of high school and know the programs.
Demerson: It used to be that a four-year college degree was the most popular. Now we are seeing a trend for technical and skill trade professions in high demand. There has been a shifted perception of technical certifications. What advice would you give to parents and teachers in promoting a culture that caters to both?
Atsumi: There are skills and knowledge that come through four-year, two-year and vocational schools, as well as certifications and so forth. We see and acknowledge that the same type of college experience isn’t suited for everyone. Individuals across communities are making different choices. Many programs have become quite adept and more nimble at producing and teaching technological skills, and people can learn those skills through so many different variations and sources now.
Beadle: We had a strong bias in the past. We’d look at the top MBA programs across the country and say we need those MBAs to come in and be our future leaders. That’s still an element of our recruitment, but we also see our four-year degree candidates are great. They have skills and aptitude to be leaders. We have leaderships programs that we’re doing them with people straight out of four-year programs, so we can expedite their learning opportunities to develop future leaders. For parents and students, I’d say you can never go wrong investing in your education. I’m a big fan of getting into a company and seeing what’s needed.
Staton: We’re starting to market to those not geared toward going to college, because it’s not for everyone. It is important, but you can make a good living graduating high school and going into the skill trades. We’re trying to get success stories out to parents and high school students, as well as community college students, to show them a pathway to success. As an ESOP company as well, someone can come in as a plumber, get ownership of the company, and make a great life for themself. There’s a lack of knowledge around how much salary can be paid as a skilled trade worker.
Demerson: Many companies are putting in efforts to promote diversity and inclusion in the workforce. How important is this in your own recruiting efforts?
Atsumi: We believe diversity helps us do what we need to do for our customers every day. We focus on providing a strong sense of inclusion by helping team members feel connected with each other, our customers and the business. Team members can learn from each other and work together, and we have groups made just for that. From an attraction perspective, we look at talent with different skills and abilities. We also launched an autism hiring program, which helps provide career readiness training for individuals on the autism spectrum.
Beadle: We have been measuring how we are doing with diversity and inclusion since 2012. As a company we kicked off courageous conversations, which is a company-wide broadcast for people to share conversations to help others understand what shoes everybody walks in. The LGBTQ community shared their experiences most recently. It’s going to help a lot. We’re building on that and getting some more momentum. We also do employee town halls, so while everybody is remote, we can keep everybody connected this way. In those town halls we are bringing up diversity as a priority.
Staton: Diversity has been a core principle of ours since our founding. We track all of our diversity goals on a yearly basis. Once a month all our leaders in the company have a “cup of joe” meeting, where they invite workers in from all over the company to share their viewpoints on what’s going on and to have their voice be heard at every level of the organization. One thing construction struggles with is women in the workplace. That’s one thing we are making a big push on. We want to go out and find more females that can join our industry. It’s not like it used to be back in the day.
Demerson: We are currently at 6 to 7 percent unemployment right now in Texas. What challenges and opportunities do you anticipate companies will see as economy begins to recover and companies begin to grow, in relation to COVID-19?
Atsumi: We’ve been offering remote work for team members for the last decade. More than 60 percent of our employees have shared that they tended to work remotely on a frequent basis. Moving to full virtual work was fairly easy for us, but we’re learning there’s both opportunities and challenges. We’re looking for appropriate ways to bring workers back on campus with the challenge of social distancing, but on the opportunity side, we’ve been able to reconfigure our facilities to be more collaborative, and leverage technology so employees can stay productive wherever they are.
Beadle: We are learning a lot. We were well suited from a tech standpoint to go fully remote, and even we didn’t know how well we were established for that. After many months of this work from home environment, we’re also yearning for a return to office. We’re learning agility for the workforce. We’re doing things we’ve never done before and asking employees to do things and learn things they’ve never had to. We’re learning to be more resilient as well.
Staton: The main challenge is rethinking the workplace. We’re seeing two different ways. Some companies are moving fully remote, and then we’re seeing the opposite where large corporations are giving more space to each employee to maintain social distancing. The opportunity has been a large push of figuring out the virtual workforce. Not every employee has to be close. We’ve actually had virtual designers recruited in from other states to help us in Texas, because they don’t have to actually be physically here.