Workers with the right set of skills remain difficult to come by. The talent challenge is not new, but it has gained greater primacy as a concern for economic development leaders.
State economic development agencies are being called upon to help existing and relocating companies find the right talent for available jobs. Economic developers also help bridge workforce development system gaps and strive to strengthen the talent pipeline. As states add or refocus talent development programs and capabilities, economic development agencies are expanding their toolkit for attracting and retaining business.
For example, to encourage companies to expand their operations within state borders, state agencies may provide talent recruitment and training services at no or low cost. Many state economic development agencies help connect businesses to just-in-time talent recruitment and training services. These are often customized for larger companies as a location or expansion incentive, reducing the costs and risks associated with making investments within the state borders and rewarding companies creating jobs with resources to ensure that their new talent is ready to perform as quickly and cost-efficiently as possible. Some programs help companies improve the skills of existing employees when companies make large capital investments, coinvesting with the firm as it introduces new technologies or equipment.
Talent initiatives are continuing to evolve. These three questions can help economic developers determine if their talent programs are moving in the right direction.
Do incentive and talent development programs encourage paid work experience?
Economic development professionals can fund training that combines classroom training and on-the-job learning in partnership with industry and the public workforce system. These programs reach new employees and can be further extended to those who may be unemployed or newly entering the labor market. Structuring these opportunities through internships and apprenticeships, for example, reflects a promising approach that economic development leaders are taking to help companies find skills and talent.
Several states offer tax credits to encourage companies to hire interns while other states opt to provide grants to companies for these purposes. Others focus on matchmaking directly or through online job boards. In some states, the economic development agency plays a central role in state apprenticeship programs, and a few states have set up grant programs and tax credits to encourage companies to sponsor apprenticeships.
Do incentive programs foster cooperation with workforce development and education partners?
Economic development organizations foster cooperation through incentives that help businesses respond to and plan for technological, organizational, and other strategic changes and investments that will affect talent requirements. Depending on how they are designed, incentives can align the interests of economic development, workforce/education partners and companies.
Are talent programs aligned with industry and cluster development strategies?
State economic development agencies often focus their talent development resources on training for in-demand or strategic occupations, industries, or clusters. Economic developers play a key role as conveners for industry cluster and sector strategies by bringing together the business community and an array of stakeholders to ensure that businesses have access to a trained workforce pool or worker training programs.
Through these efforts, economic developers can help entire sectors identify structured long-term solutions to talent pipeline development. States can direct resources to these sectors, such as by funding collaborative initiatives, offering competitive grant opportunities to organizations supporting workforce strategies in targeted sectors, and providing loans or grants to students or trainees.
This blog article is adapted from the CREC report, Repositioning Economic Development Incentives Post-Pandemic, prepared in collaboration with Smart Incentives for the State Economic Development Executives Network.