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What Birmingham can learn from Pittsburgh’s workforce development efforts

Pittsburgh and Birmingham are two cities with a number of similarities, deep historical ties and many connections.

Both are cities that were built on the steel industry, but are -places where the economies have evolved to also include heavy concentrations of health care and finance.

They each have major research universities that are crucial economic engines for their regions.

And, as Birmingham embarks on a bold plan to align and transform its workforce, Pittsburgh offers a unique chance for Birmingham to explore its past and its future.

In the Birmingham Business Journal’s inaugural Filling the Gap workforce event, PNC Financial Services Group Chairman and CEO Bill Demchak visited Birmingham on Oct. 30. Demchak, who also serves as chair of the Allegheny Conference – Pittsburgh’s equivalent of the Birmingham Business Alliance – gave a candid talk about his Pittsburgh’s Inflection Point initiative, which is his region’s equivalent of Birmingham’s Building (It) Together effort.

Like Building (It) Together, Inflection Point was powered by research into the workforce conducted by Burning Glass Technologies, so Demchak’s discussion provides some unique insights and lessons for Birmingham as its new effort takes shape.

Birmingham and Pittsburgh were the first two metros to receive the in-depth research.

Participating in a conversation with Rachel Harmon, who was recently hired to lead talent development for the city of Birmingham, Demchak covered a number of topics – from the role of the business community to new ways to approach education and beyond.

Here are five of the key takeaways from Demchak’s talk.

1. Rethinking the workforce formula

One of Demchak’s first suggestions for the Magic City was to think about workforce development in a different way.

As the CEO of a Fortune 500 company, Demchak said he initially viewed the topic from a numbers and growth perspective.

But the more he became involved, Demchak said his view changed.

Specifically, he realized more energy needs to be devoted to the supply side of the workforce equation rather than the demand side.

Within the supply of talent, he said the metro noted that an increasing percentage of the labor pool doesn’t have the skillset to succeed in the current economic climate.

That puts the onus on communities to find new and innovative ways to address the supply side of workforce development, whereas much previous energy was focused on the demand side.

“Until we match the demand side with the supply side, we will fail at this,” Demchak said.

And he made it clear that K-12 education is paramount to that effort.

2. High schools are a critical piece

One overarching theme of the talk was the importance of addressing the challenge Pittsburgh, Birmingham and other metros face in successfully engaging with their local high schools and maximizing their impact on the workforce.

As Pittsburgh has embarked on its effort, Demchak said it’s been a challenge to get into the school systems and make them aware of what opportunities are out there to align with the workforce effort.

He said bridging that communication gap – a challenge in many communities – is key.

“(Workforce) has to be solved in the high schools. You can’t solve it by retaining more graduates from our colleges or attracting more people to our city alone,” he said. “It’s really about figuring out how to get more kids out of our high schools.”

He reiterated the need to reach students at an early age and on their terms – particularly through technological means. Demchak said Pittsburgh has learned early engagement with high school students is key and that a higher percentage of employers need to embrace it.

He said those trying to build a workforce while operating in a traditional system focused guidance counselors face a nearly impossible task, given the number of students typically assigned to a guidance counselor.

 “I don’t see how we solve this until we solve it with technology and the way kids learn,” he said.

He said an ideal setup is one where students – and the influential parents or guardians in their life – are regularly communicated with via technology about their career progress and options.

Demchak said it all boils down to keeping hope and choices alive, so when students reach 12th grade, they have clear options, plans and choices – and a detailed path for how to pay for it and next steps.

“We have to keep hope alive and do it in a way that works for kids,” he said.

Given Alabama’s traditional challenges with funding, Demchak was faced with a question about how Pittsburgh approaches workforce development in high schools given funding constraints.

He suggested that simply using existing dollars in ways that are more targeted toward success in the workforce could be an attractive option.

“We tend to jump to this conclusion that our public schools are poorly run and teachers do a lousy job, and there’s not enough money. And that if we throw enough money at it to industrialize what we are already doing, we’re going to solve our problem,” he said. “But what I’ll tell you is, what I see in Pittsburgh, the teachers are dedicated. They are teaching what the state is telling them to teach, which in a lot of cases has nothing to do with the probability of (students) being successful in their professional lives. If we can take a lot of the dollars we have today and point them in a direction of what it takes to be successful in today’s economy, that’s our job.”

3. Engaging the corporate world

While workforce development is a regional issue impacting a wide range of companies and industries, he noted that some companies are more heavily affected than others.

Demchak said PNC is one of about 10 to 12 companies with large internal training programs that hire nationally. While Demchak and leaders from those large companies have been involved in Inflection Point, he said it was critical for the most impacted companies and industries to get involved.

They made it a point to look downstream from the traditional corporate giants and engage those front-line employers.

“What was happening in Pittsburgh was everybody was hiring from each other and no one was really willing to invest in junior talent in a programmatic way to build the workforce of the future,” Demchak said. “We laid all that out and engaged that set of companies.”

Like Birmingham, the workforce dynamics had lessened the pool of talent for many businesses. And there wasn’t the structure to upskill and develop future top performers to replace employees when they moved on to new companies or positions.

A coordinated workforce effort across the community creates opportunities to address those gaps through technical and trade programs and other means, without putting the entire cost burden on individual companies.

That’s not to say companies haven’t created their own innovative programs to boost workforce in Pittsburgh.

Demchak said many companies have started recruiting directly from high schools through technical programs that give graduates a direct path to employment.

PNC also has a large, competitive internship program that brings talent into the company. For his company, he said the internship program has played a pivotal role in its talent development effort.

“Kids do remarkable things. They are full of energy. They are fearless. They don’t know what they don’t know, and they aren’t afraid,” Demchak said. “We’ve kept our culture (across our footprint), because we’ve grown them here.”

As Birmingham embarks on its own workforce initiative, Demchak said it’s critical for employers to go into the process open-minded.

That’s because one of the critical factors in transforming the workforce is engaging the high percentage of individuals who are underemployed or unemployed. By sticking to rigid criteria or qualifications, companies could be overlooking potential employees who could be tremendous assets.

“That’s the biggest thing we’re trying to change in the corporate mindset in Pittsburgh,” he said. “Take a chance on someone and they will surprise you.”

Demchak said it’s important for companies and communities to find ways to integrate themselves into disadvantaged and disenfranchised populations that may have high percentages of unemployed and underemployed individuals.

He said that has proven to be a challenge because some of those populations are fragmented and difficult to reach through traditional means, so Pittsburgh and the Allegheny Conference have been investing dollars and resources into those communities to reach those individuals – with a hope of connecting them with new opportunities.

4. Pittsburgh’s process

Demchak said the first strategy for his region was broad-based communication about the research and the importance of the initiative.

“It was interesting. The people who reacted the strongest were actually the educators, particularly the two-year technical schools,” Demchak said.

He said the engagement of the educators allowed changes inside university systems to better align with what the jobs of the future will look like –something the Building (It) Together report noted is crucial for Birmingham.

While Pittsburgh’s experience with Burning Glass may prove beneficial for Birmingham – and representatives of the two metros have been working together – Demchak said there wasn’t one particular metro that Pittsburgh has looked to as it seeks to solve the workforce challenge.

“Everybody has partial solutions to it,” he said. “There are small bits and pieces we’ve taken from other places.”

While early involvement and discussions were important, Demchak said ongoing communication is extremely critical for ensuring the effort gets traction.

One component of that is regular updates about the process.

In Pittsburgh, a late 2017 update to Inflection Point called for accelerated action by the community. The report noted several specific and tangible areas of potential improvement, such as the percentage of employers that were considering engaging with K-12 education systems and limitations identified in job postings in the region.

The updates serve an important function.

“Once a year, you have a solid month of hard discussion about this every time (the update) comes out,” Demchak said.

5. Working together

Another area where Pittsburgh and Birmingham have similarities is governmental structure.

Both metros have a high number of local governments within their regions, and Demchak several times spoke of the collaboration between different constituencies necessary for taking on a complex issue like workforce development.

“The (Allegheny) Conference itself represents 10 elected counties – and they are all involved. And our political network — and this is just part of history—they recognize that they can get a lot more done if they are aligned with business. So we work together, maybe not always agreeing with each other, but we work together. And we fund together, and we promote together,” he said. “We rarely see a fight between government officials and business because we settle it long before it gets to that.”

When asked about his passion for workforce development, Demchak said the role he is playing in Pittsburgh’s workforce effort through the Allegheny Conference is important to the values of his business, which is one of its region’s largest employers and a critical piece of its economy.

As Birmingham pursues its own solution to the pressing workforce challenge that metros around the nation are grappling with, Demchak said it is important to have an influential business leader who can spark action in a community and lead the charge.

“Ultimately, the mayor can’t do that. The foundation can’t do that. A group of nameless people can’t do that,” he said. “You’ve got to have one loud, obnoxious person that has the ability to influence the community to do it, and that’s part of my job description.”

By  – Editor-in-Chief, Birmingham Business Journal