Chapter 4 – Workforce: Creating a Demand-Driven Workforce System

What is Transformative Economic Development?
A new periodic post about economic development from Greater New Orleans, Inc. President & CEO Michael Hecht. Inspired by questions about what economic development is, why it matters, and how it can have systemic positive impact, “Transformative Economic Development” is a handbook of best practices that can be used by anyone that wants to help create a thriving economy, and an excellent quality of life, for everyone in their community.

Many years ago, a prominent politician approached me at an event and clasped me on the shoulder. That’s never good. “Michael,” he said, “I am counting on GNO, Inc. for jobs.” I looked at him, and what crossed my mind to say was, “Well, I’m counting on you for safe streets, good schools, and responsive, effective, government.” But I didn’t say it, and that’s why I’m able to be here today, writing this chapter.

Regardless, it got me thinking. There seemed to be this pervasive view that businesses are essentially like Pez-dispensers for jobs. If you just bonk them on the head hard enough, the jobs will spit out. Frankly, only someone who has never made payroll could feel this way. For those of us who have signed checks that people rely on for their rent and food, we know that jobs are critical, but that they are also expensive and not easy to provide and sustain.

As I pondered Pez-dispensers, I realized that this misperception pervaded our entire workforce system. Businesses are typically taken for granted – as passive suppliers of jobs - while all of the focus is placed on training institutions and job seekers.

Training institutions (schools, non-profits and government programs) get the most attention, because they are the entities that are funded by government and workforce legislation, like WIOA (the Workforce Innovation and Opportunity Act). Students also get a lot of attention, because they are the future workers (and voters). Students are considered the “customer,” to whose interests and preferences should be catered.

But what if focusing on trainers and students is wrong?

The challenge with training institutions is two-fold:

First, government-sponsored training institutions are often more concerned about getting paid for “training” students, than the results of this instruction (i.e., sustained, well-paying, employment.) This is the result of financial incentives that reward “throughput” (i.e., number of students), as opposed to outcomes (success of graduates): institutions are paid per student - regardless of long-term success.

Then, the challenge with colleges and universities is that the classical liberal arts model is meant to teach students to “think,” as opposed to “get a job.” In fact, I once had the dean of the engineering school of a prestigious university tell me that “It is not the job of the university to help students get a job.” (Try telling that to a parent who is paying $75,000 per year for tuition, or a student who is racking up big debt to get that degree!)

Why aren’t we listening to the student, then? Aren’t they the worker of the future? The problem here is that most students don’t have the information to know what future employment opportunities look like, and how they align with their interests and skills. Just because the students are the customer, doesn’t mean they know what they really want.

These problems notwithstanding, this is how traditional workforce training systems are built: trainers with the wrong incentives are paid to teach students who don’t know what they want. The result is predicable: mediocrity. Students don’t get relevant training, and businesses don’t get the employees they needed. The only winner is the “workforce-training-industrial-complex.”

The answer seems clear: workforce training efforts should start with business. Training institutions should ask businesses what they need, now and tomorrow, and then develop curricula that meet these current and future needs. The result will be a triple-win: businesses will get the workers they need to grow, training institutions will offer market-relevant courses, and – most importantly – workers will be on their way to in-demand, well-paying jobs.

This was what GNO, Inc. set out to do with our “demand-driven” workforce program, “GNOu.”

Our first opportunity to try out the business-first “GNOu” process was with one of the most venerated companies in the world, GE. In 2012 GE opened a technology center in New Orleans, in order to provide internal tech services to GE divisions, like Aviation. In the words of GE’s New Orleans lead, “GE makes things that spin. GE Technology in New Orleans helps them spin faster.”

GE Technology was attracted to New Orleans for a number of reasons: our costs were lower than other, more established, markets; the Louisiana Software Incentive (35% cash back) was the best in America; and, our world-famous culture was attractive to programmers and tech types. The only problem that GE foresaw was, given that New Orleans was a newer technology market, would there be enough labor for GE to grow to its forecasted 300 positions?

Our proposed answer was a GNOu, demand-driven, program we called “SWEAP – Software Workforce Engineering Apprenticeship Program.” SWEAP would be a three-way, public-private partnership: first, the state would provide funding to the University of New Orleans (UNO); then, UNO would commit to developing and resourcing a new software training program; finally, GE would help develop the curriculum, provide some of the training, and then take summer apprenticeships from UNO. GE could “try before they buy,” and vet the UNO students over a summer internship, permanently hiring the students that they most wanted. It seemed to make sense: GE would get custom-trained workers; UNO would get a funded, market-relevant curriculum, and the overall labor market would benefit from new talent.

Over time, SWEAP fulfilled its promise, and the GNOu concept was validated. GE ended up hiring over 90% of the apprentices they trained via SWEAP, and the New Orleans office of GE became renowned as the high-productivity / high-diversity / low-cost office in the GE universe. Leadership from GE New Orleans began to travel around the country to teach the GNOu demand-driven model to other GE offices.

Over time, GNOu has expanded to over 25 programs, at 13 schools in the region. A few examples of programs and schools include:

Mechatronics Apprenticeship Program – Delgado, Northshore Tech., and Nunez
Bachelor of Science in Urban Construction Management – University of New Orleans
Applied Chemistry Degree Program – Xavier University
Amazon Web Services Cloud Computing – Louisiana Community & Technical College System
Certificate in Urban Water Management – Dillard University
Music Industry Career Development University Program – Delgado, Dillard, Loyola, Tulane, UNO
Bachelor of Science in Public Health – LSU Health Sciences
Renewable Energy Certificate Programs (Hydrogen, Solar, & Wind) – River Parishes Community College
Bachelor of Science Mechatronics & Robotics – Xavier University
Food Science – University of Holy Cross

The crown jewel of GNOu is our “Mechatronics” program; it is one of our most sophisticated, and proven, GNOu courses. But first… What is mechatronics? It is the confluence of manufacturing, robotics, and computers. Think of robotic automobile assembly lines – this is mechatronics. In this age of increasing manufacturing complexity, combined with labor scarcity, mechatronics is the wave of the present, and the future.

The need for more workers trained in mechatronics was first brought to us by Elmer, one of the oldest and largest chocolate manufacturers in America. Elmer ranks only behind Hershey’s for amount of chocolate sold for Easter and Valentine’s Day. The owners of Elmer wanted to remain and grow in Ponchatoula, a charming little city on the north shore of New Orleans, more known for strawberries than chocolate. But, they were under severe pricing pressure from competitors, including Hershey’s, who had moved production to Mexico.

Elmer’s answer was to invest in technology – namely, mechatronics – and to run the most sophisticated chocolate-packing line in the world. So, they invested millions in the new equipment. But, they still then needed workers to manage the new robotic chocolate line. Elmer 2020 would be a far cry from the days of I Love Lucy…

We spoke to Elmer, and wanted to set up a GNOu, but the number of workers needed per year by Elmer didn’t justify a full program. So, we approached other sophisticated manufacturers, to see if they had a similar need. We received an emphatic “yes” from Zatarain’s, maker of iconic New Orleans spices, and Laitram, one of the largest manufactures of conveyor belts in the world (including for Amazon). By pooling the three companies together, we could provide enough hiring demand to justify a full mechatronics program.

Then, we needed to find the right training provider. We first spoke with Northshore Technical Community College. They were excited to join, and were best positioned to provide training in the technical skills, such as process logistics controls, sensor technology, and laser cutting technology. They didn’t have the resources, however, to provide electrical and instrumentation, which were also critical needs expressed by the industry partners.

So, we spoke to two other community colleges, Delgado (New Orleans) and Nunez (St Bernard Parish). They were excited to join, and to provide training for manufacturing and machinist, and, electrical and instrumentation line work, respectively.

Finally, we seemed to have the mix: three companies + three schools. As for the structure, we thought a European-style apprenticeship program would work best. This would be a combination of on-the-job training, plus paid classroom time, on a rotating basis. The HR Director at Elmer happened to be German, with internship experience, and was happy to work with us designing a program.

Ultimately, the GNOu Mechatronics program was structured in this manner:

Apprentices interview and are hired by their respective employers, with employers working together on placement of the apprentices
Then, apprentices are all paid the same wage at each company and are paid on the job and in the classroom, going 8-weeks on the job site and 8-weeks in the classroom for two years, to graduate
Apprentices receive 20+ industry-based credentials over the two-year period and receive a certificate of completion recognized by each college

In the first year, we learned a lot, including:

It is important to start small when creating a training program, so that problems can be identified and quickly fixed
The program curricula and structure should be flexible, allowing the colleges to change as needed to meet industry skill needs – which are increasingly fluid in today’s environment
It is critical to listen to the student needs as they are going through the program. Each student is different and faces different challenges; individual case management is sometimes required

Today, Mechatronics is an established GNOu success. We are on to our fourth cohort, and new companies are looking to join Mechatronics, including Abita Brewing Co. and Associated Terminals, a large shipping company.

Ultimately, what we learned from Mechatronics that we are applying to other GNOu programs is:

Industry validation of the workforce needs is critical to begin implementing new training programs, and having multiple industry partners voicing the need is stronger than just one partner
Focus on skillsets (a range of applicable skills) when developing training programs, as it will help attract multiple partners from across multiple industry sectors
Make sure all partners in the workforce and talent ecosystem (schools, nonprofits, elected officials, etc.) are aware of industry demand and needs; it takes a village to create the talent pipeline for industry growth

The GNOu model has shown success, because it correctly identifies business as the customer. It is limited, however, by the fact that the focus has been on the college-age and adult worker. If we really want to institutionalize the GNOu model in America, and develop a demand-driven system, then the practice has to become pervasive. In practice, this would look like the following:

STEM, and particularly technology and engineering, would be taught with more rigor, and more applied methods, in primary schools
Learning would never stop. Integrating professional and continuing education organization and higher education departments into workforce training is critical to growing strong mid- to senior-level talent
College and universities would focus on job-readiness above all
Internships and career exposure opportunities would be embedded in the programming of nonprofit and community workforce organizations
All workforce ecosystem partners would be at the table when developing training, to ensure all resources are linked and leveraged.

It should be noted that simply because our system becomes more demand-driven, and business-focused, does not mean that we should not meet the needs of our workforce. Indeed, workers have a range of needs, some of which are new to the post-COVID environment. These include:

Access to strong childcare centers
Transportation to employment centers
Flexible, affordable, and earn-while-you-learn structures to meet the various “life-realities” of diverse students

Our training providers, as well, need support to be more effective. For nonprofits and government-supported trainers, these needs include:

Industry partnerships and connections, to help these training providers work directly with companies. This does not necessarily happen organically
Collaboration with other training partners and higher education institutions to ensure “hand off” opportunities exist for individuals to continue along the training pathway
Useable quantitative and qualitative data to understand current and future job demand

Colleges and universities are so important to the economic development equation that GNO, Inc. has placed all 13 of the region’s higher education presidents on our board of directors. We literally have the universities “at the table” when we are discussing strategy and execution. From our relationship with the universities, we have learned about their specific workforce training needs, as well, which include:

Recruitment of instructors and access to specialized equipment
Industry expertise and insights
Accurate labor market and economic data to drive resources and focus areas
An attitude of nimbleness. Traditional degree pathways are no longer a winning strategy; schools must be prepared to partner with the private sector and to experiment with different models, like work-study

Finally, we should end this chapter on demand-driven workforce with a reflection on the post-COVID phenomenon of remote work, previously mentioned in the first chapter. Post-COVID, business is still the customer. Business’s workforce needs as a customer, however, have shifted significantly, as a substantial portion of employees are now working remotely.

Remote work does not change the “what” of workers – the skills remain the same, but does shift the “where.” Per the Wall Street Journal, pre-COVID only 4% of businesses had remote workers in their business plan. Today, that number is above 40%. The implication for economic development is big:

Pre-COVID, economic development could have been described as “elephant hunting” – seeking to land large prey, like a corporate headquarters, because the jobs and tax revenue would all follow. The blunt instruments of economic development elephant hunting are incentives, infrastructure, and dinners at steakhouses.

Post-COVID, economic development is more about “creating a better butterfly garden,” to attract mobile (even flighty) remote talent. Those cities and regions that can provide the most attractive environment, in terms of quality-of-life for the money, will attract the talent, and win the economic development game. So post-COVID, the keys to economic development are affordable housing, culture and amenities, public safety, etc.

With this shift from “big game to beautiful gardens,” GNO, Inc. has started a range of initiatives to attract remote talent. These include:

DestinationGNO – a quality-of-life resource hub to help individuals understand all the aspects of living and moving to the GNO region. Destination GNO even has a neighborhood quiz to help match personal interests with neighborhood amenities
StudyNOLA - a higher education talent attraction tool showcasing Greater New Orleans as a higher education destination seeking to be a driver to cultivate and attract researchers, students, faculty, and industries to the region
GNO Professional Jobs Plan - a business development and attraction strategy that focuses on the recruitment and sustainability of professional jobs, especially remote jobs, to the GNO region

GNO, Inc. has even taken a lead role in public safety, recognizing this as the foundation of quality-of-life. We started the NOLA Coalition, a diverse group of now over 540 nonprofits and private businesses, all dedicated to creating a safer city. You can see more about the NOLA Coalition at www.NOLAcoalition.info.

Creating a demand-driven workforce system is intuitive, but it is not simple. It requires listening to companies who are not accustomed to being treated as the customer, or expressing (or even understanding!) their future needs. It requires working with schools that are set in the their traditional models and curricula. It requires working with training providers who have not traditionally been rewarded for results. Most of all, it requires a dynamic, flexible, case-management approach to the diverse workers of tomorrow.

However, we have seen in Greater New Orleans that the demand-driven model, built over time, can be the triple win – for companies, workers, and the economy – that we need for a prosperous future.