Where Indiana leads, too many workers don’t follow
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As Indiana competes with neighboring states for computer-chip and electric-vehicle production plants, some state leaders remain concerned that Hoosiers are ill-equipped to fill the jobs of the future should those corporations decide to locate here.
Indiana is a leader in the national advanced manufacturing and logistics sectors, yet employers continue to struggle to find candidates to fill open positions, according to a new report from Conexus Indiana, a statewide organization that supports and promotes Indiana’s advanced manufacturing and logistics industries.
Workforce development is still the “top challenge” for many employers, said Sam Charron, director of government affairs for the Indiana Manufacturers Association.
“There’s still a big demand for more skilled workers, and that’s where the focus is for our members,” Charron said.
Labor economists attribute the nation’s labor shortage to a confluence of factors, including a surge in retirements since the pandemic, a lack of skilled workers and a dearth of affordable child care.
In Indiana, the volume of job postings for Industry 4.0 skills—artificial intelligence and machine learning, data visualization, cybersecurity, cloud computing, to name a few—is roughly on par with that of neighboring states, according to the Conexus study.
Manufacturing and logistics account for one in five private jobs in Indiana and nearly a third of GDP, making Indiana the most manufacturing-intensive state in the country. At the same time, the state’s industry turnover rate, which is the number of job separations compared with the number of jobs, was 50% in 2022. The turnover rate for the logistics industry alone was a staggering 85%.
Those rates are reason for concern because they are much higher than the nation’s rates, which stood at 39% for the overall industry and 70% for logistics, according to the U.S. Bureau of Labor Statistics.
Hoosiers make everything from automotive parts and jet engines to pharmaceuticals and electronic components. About one in four workers in these industries is at or near retirement age, increasing a sense of urgency for employers.
To inspire more Gen Z Hoosiers to enter these careers, Conexus launched a Make IN Move initiative that uses digital advertising and marketing campaigns on social media to tout the average salary for careers in the industries. The average total compensation for a manufacturing job, which includes wages and supplements, is $89,000; the average logistics job pays $67,000.
It’s part of an effort to ensure that younger generations are prepared for advanced manufacturing jobs that will become even more widespread in the next several years.
According to the Conexus study, the manufacturing subsectors anticipated to grow the most over the next three years are transportation equipment manufacturing, fabricated metal product manufacturing and machinery manufacturing. In the logistics industry, warehousing and storage are expected to see the largest growth, followed by truck transportation, and couriers and messengers.
In the works
Thousands of those kinds of jobs and billions of dollars of investment in advanced manufacturing are slated to come to Indiana, putting an even greater spotlight on the need for trained workers.
Since President Joe Biden took office in January 2021, Indiana has secured $7.6 billion in commitments from original equipment manufacturers, projected to bring 5,800 jobs, according to the White House.
The Indiana Economic Development Corp. is pursuing several advanced manufacturing projects that together would exceed $55 billion in investments and result in thousands of well-paying jobs.
Indiana is in the running for a $50 billion semiconductor plant, and an unnamed auto-parts maker is considering the state for a $3.2 billion manufacturing facility in north-central Indiana, according to IEDC officials. State officials are also courting a $3.2 billion data-center project.
Other projects are already in the works. Minnesota-based semiconductor manufacturer SkyWater Technology is building a $1.8 billion R&D and production plant adjacent to the Purdue University campus in West Lafayette. Amsterdam-based automaker Stellantis is constructing a $2.5 billion electric-vehicle battery plant in Kokomo, and General Motors is partnering with South Korea-based Samsung SDI to build a more than $3 billion EV battery-cell plant in northern Indiana.
Indianapolis-based Eli Lilly and Co. is investing $3.7 billion in a manufacturing site in Boone County and will serve as anchor tenant of the IEDC’s LEAP Lebanon Innovation and Research District, a planned 9,000-acre advanced manufacturing and tech hub. LEAP is an acronym for “Limited Exploration/Advanced Pace.”
To ensure that employers will be able to fill these jobs, business executives, education leaders and government officials are working to remove barriers to entry for workers, increase the number of Hoosiers seeking college degrees and provide students with the skills they need to secure jobs of the future.
Conexus officials said continued state funding for manufacturing-readiness grants and more emphasis on manufacturing jobs in middle school and high school could help fill the gap.
“It’s really making sure that we’re keeping workforce development and education development in lockstep with tech adoption,” said Brad Rhorer, Conexus chief operating officer and chief talent officer. “We’re seeing a lot more exposure in our postsecondary network, but we want to see more in the [high school] space.”
Legislative help
In the most recent legislative session, the Indiana General Assembly passed several bills designed to bring more students into the STEM workforce.
State lawmakers created a program that allows eligible high school students to receive up to $5,000 for career scholarship accounts. Students can use the funds to pursue work-based learning experiences and earn postsecondary credentials before graduation.
As part of that legislation, Indiana’s authority for both secondary and postsecondary career and technical education moved from the Governor’s Workforce Cabinet to the Indiana Commission for Higher Education, a change that was intended to prepare more students for high-skill, in-demand careers in fields such as advanced manufacturing, information technology and agriculture.
“It’s a big benefit because it continues to engage students in the workplace,” Rhorer said. “I know our employers are incredibly encouraged by more opportunity for students to enter the workforce and at least experience the new technologies that are being adopted.”
State legislators also allocated an additional $40 million in the next two-year budget for manufacturing-readiness grants, which help Indiana companies invest in new technologies.
To draw more talent to Indiana, lawmakers also dramatically increased funding for the Indiana Destination Development Corp., a state agency formed in 2019 to replace the Office of Tourism Development. The agency’s mission has since expanded from primarily tourism to include attracting and retaining students and temporary workers.
Legislators also gave unprecedented levels of funding to the IEDC, including $500 million for a deal-closing fund; $500 million for READI 2.0, a third wave of regional economic development grants; and $150 million for a revolving site-acquisition fund.
Indiana’s higher education institutions are also stepping up to the challenge. Purdue University last year launched the country’s first semiconductor and microelectronics degree program, and Ivy Tech Community College offers a smart manufacturing and digital integration degree, preparing students for careers in robotics, autonomous systems and highly technical fields.
“There’s another level coming to Indiana as we look at electric vehicles, semiconductor chip manufacturers and battery manufacturers because of all of the technology involved,” said Sue Griffith Smith, Ivy Tech’s vice president for advanced manufacturing and applied sciences. “Those processes are becoming very automated. That is what we are preparing our workforce for.”•