“We have been working vigorously to improve our tax climate, our business climate and our regulatory climate”

Indiana’s workforce pipeline is leaky and in need of repair, according to the Indiana Chamber of Commerce. While businesses have a comfortable tax and regulatory environment, the state’s poor educational attainment and lack of amenities hinders efforts to attract and retain businesses or employees.

“Yes, business climate is important and we’re fortunate to be among the top states in that regard,” said Jason Bearce, the chamber’s vice president of education and workforce development, in a Tuesday press conference. “At one time, (that would) have been sufficient to attract that outside private sector investment but today – it’s a must-have, but it’s not sufficient in and of itself.”

Indiana continually lags behind its peers in terms of workforce even as it tops the list in overall business climate. That unqualified workforce means that Indiana has twice as many open jobs as it does job seekers, according to a chamber report.

“We have been working vigorously to improve our tax climate, our business climate and our regulatory climate,” said Kevin Brinegar, the chamber’s president and CEO. “But where we haven’t made the progress we need to make to stay… as competitive as possible is in our education and workforce rankings.”

Students not getting the education they need

Problems with the workforce pipeline start early, with the poor availability of quality preschool or childcare, according to the chamber. Coupled with continuing poor state test results compounded by pandemic-related learning losses, huge swaths of students that do graduate high school leave with waivers – especially students of color.

Indiana Chamber of Commerce President and CEO Kevin Brinegar (Courtesy of chamber)

“We’re spending billions of dollars on our K-12 system and getting results that are not adequate to serve our economy in the future,” Brinegar said. “We have a lot of employers who want to expand and diversify their hiring (with) talented African American and Hispanic students but the reality is this overall system is not producing very many of them.”

Additionally, having 289 individual school districts doesn’t serve students well, the chamber concluded. Over half, 54%, of corporations have less than 2,000 students and are too small to offer the appropriate coursework, putting them behind their peers academically.

The majority of the smallest districts, those with less than 1,000 students, don’t even offer physics to students, Brinegar said.

In their report on the workforce pipeline, the chamber urged the General Assembly to establish a fund to incentivize merging districts in order to improve class offerings – emphasizing “intentional career exploration” previously discussed by House Speaker Todd Huston (R-Fishers).

Children with access to quality childcare and preschool perform better in school – this shortage could be alleviated by expanding existing program eligibility but would need to be coupled with higher wages for underpaid childcare workers. Just as importantly, those opportunities allow their parents to rejoin the workforce.

“We saw a lot of people pulled out of the workforce during the pandemic and the available data suggests that, to a large degree, is attributed to individuals not being able to find affordable or accessible childcare,” Bearce said.

Indiana needs to increase the workforce pipeline by encouraging more Hoosiers – adults included – to pursue higher education, whether through a traditional four-year university or advanced certificate like welding. Brinegar suggested making college more accessible, and affordable, by auto-enrolling eligible students into the 21st Century Scholars

Program and federal Even after receiving financial aid programs. their degree, most educated

Jason Bearce, the Hoosiers choose chamber vice president to relocate elsewhere in of education and the country – further workforce development exacerbating the leaking (Photo from the Indiana workforce pipeline. Chamber of Commerce) Less than half of the

But perhaps due to 60,000-plus who do Indiana’s history as an graduate from Indiana agriculture- and manufacturing-intensive institutions stay in the state five years later. state, many Hoosiers Two-in-five students, may believe that a 40%, leave within one high school education year of graduation. is enough for a career. “Those 23,000 lost But, in reality, nearly all graduates each year new jobs require further could go a long way education. towards addressing

“I think there’s some Indiana’s talent shortages,” wishful thinking… (that) the chamber students might not be report said. “Our graduate going on to some sort retention strategies of higher education but must be enhanced and they’re going to work – I incentives for graduate wish I could say that’s retention should be the case,” Bearce said. seriously considered.” “But the labor participation When the state first for students today started making efforts to who aren’t going on to improve its post-secondary postsecondary (education education attainment is) on the decline. in 2012, 33% of They’re not working, Hoosiers had at least they’re not going an associate’s degree or to school and – in the high quality credential. long term – they’re not A decade later, Indiana employable.” has improved to 48%

Just over half of but that means less Indiana’s high school than half of Hoosiers graduates pursue a have that additional postsecondary education, education. 53% in 2020, Most states fare better which corresponds with than Indiana in their the number of job openings workforce pipeline – the left unfilled due state ranks 37th in the to a lack of qualified nation for education applicants. In 2022, attainment. The U.S. 74% of companies told average sits at nearly the chamber they left 52%, with some states jobs open because they as high as 61%. couldn’t find someone Indiana will likely fall to fill the position – with short of its goal to hit 83% saying talent needs 60% before 2025 but are a challenge. Brinegar said that progress

Problems needed to be made post-college regardless. Looking persist at current numbers, Hoosiers with higher levels of education are more likely to participate in the workforce. Nearly three-quarters, 72%, of Hoosiers with a bachelor’s degree or higher work while just over half, 54%, of those with a high school diploma do.

Even worse, for those thousands of students who don’t finish high school, the majority aren’t part of the workforce. Of that group, just 39% were working.

“If we could lift up the skills of these individuals (who have a high school diploma or didn’t finish high school), we could fill a lot of the open jobs that we have right now,” Brinegar said.

Both men seemed optimistic about chances for legislation addressing these issues in the 2023 session, noting that many lawmakers were already aware of the shortages and their importance.

But Bearce said the state “needed to put its money where its mouth is” and make investments to fix the workforce pipeline.

“We think that there are smart, targeted investments that the state can make that will spur additional investment from the private sector… (in) talent development and talent retention,” Bearce said. “We don’t believe that government alone can solve these problems.”