Study: Hidden workforce could help new companies staff up

As Bill Fredrick was packing to leave his New Jersey office for a business trip to Reno last winter, co-workers asked if he was getting a divorce.

And that, Fredrick says, is a problem that Northern Nevada needs to address as it seeks to shift the base of its economy to software, financial services, clean energy and similar high-paying sectors.

Fredrick, the president of Wadley-Donovan GrowthTech LLC of Springfield, N.J., oversaw a wide-ranging study of the Northern Nevada workforce commissioned by NV Energy, the workforce development agency Nevadaworks and the state department of employment.

The picture Fredrick's research drew is a combination of bright spots and trouble spots for the region's economy, particularly as new companies to the area attempt to determine if there are enough skilled workers to meet their needs.

For most companies that are looking to relocate, Fredrick said, the availability of enough skilled workers is the single most important issue.

On one hand, there are a lot of folks available to go to work - particularly as the region's unemployment rate has topped 11 percent in the past year. And another pool of potential workers includes nearly 188,000 people who are underemployed, part-timers who are looking for fulltime work, recent high school and college graduates and the like. That pool, Fredrick says, includes folks with strong management skills, and about 20 percent of those in the pool hold at least a bachelor's degree.

In fact, the survey found that the so-called "hidden workforce" accounts for more than 60 percent of the entire labor force that lives within 40 miles of Reno and Sparks. That percentage, Fredrick said, is not unusually high in comparison with other parts of the country.

Between the hidden workforce and currently unemployed workers, Wadley-Donovan GrowthTech LLC projects that a new employer who moved into South Meadows and paid competitive salaries could staff up to 1,840 workers within a year.

A manufacturing employer, meanwhile, could staff up to more than 1,700 workers without breaking a sweat.

On the other hand, Wadley-Donovan GrowthTech found that the unemployment figures and the large hidden workforce can be misleading.

About 12 percent of the unemployed people who are looking for work, for instance, were laid off from construction jobs.

"Retraining these residents into other occupations will be difficult," Wadley-Donovan analysts wrote.

Despite high levels of unemployment, employers surveyed for the study said they need to routinely recruit elsewhere in the country for technical talent - engineers, researchers, mathematicians - as well as experienced managers.

The region already lags behind national figures in the number of workers in six of 10 key knowledge-based occupations groups, such as computer specialist, engineers and healthcare professionals.

"Companies seeking locations for new facilities requiring these occupations could be more attracted to other locations with a deeper talent base in these knowledge-based skills," analysts wrote.

Recruitment of skilled professionals is difficult in the San Francisco Bay Area, northern Nevada managers told Fredrick.

Employers told researchers that the quality of education is critically important - both for the employees they hire directly out of school as well as their effort to recruit skilled workers from elsewhere in the country.

"Employers frequently voiced concern about the absence of popular support in the area and at the state level for education. This lack of real support results in low quality school systems," researchers wrote "Widespread employer concern was indicated over the underfunding of public schools."

Recruitment efforts are hurt, too, by the region's image, Wadley-Donovan's researchers found.

"The area is widely viewed as a remote desert town focused on recreation, tourism and gaming," they wrote. "This image runs counter to the region's goal to develop into a more technologically advanced center and attracting younger talented residents."

Fredrick said the region clearly needs to develop concerted efforts to:

• Improve the quality of schools and widen the reach of employee-training programs. "You're going to have to look vigorously as improving your educational system," Fredrick said.

• Create a "Come Back Home" program to recruit skilled workers.

• Take steps to make the region more appealing for young, educated professionals.

• Develop a stronger brand for the region as a business center in addition to its recreational offerings.

Graying workforce

Despite the likelihood that 11 percent of the northern Nevada workforce expects to retire within the next five years, research by Wadley-Donovan GrowthTech LLC found it's not a major concern of employers.

"Most employers are confident that they will be able to successfully hire new replacement employees," the firm found.