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Job Retention and Skills Analysis among Newly Hired Workers in Montana Presented at the C2ER/LMI Institute Annual Conference June 10th, 2015 Amy Watson Economist MT Dept. of Labor and Industry Hiring the Right Workers New Hire Retention Rates, 2006 to 2009 Percent of Workers Remaining with Employer After Hire After One Quarter After Four Quarters Montana Wyoming Montana Wyoming 2006 66% 63% 24% 26% 2007 64 64 22 26 2008 63 64 24 27 2009 67 67 A new hire is a worker that is receiving wages from that business for the first quarter since 2000. Turnover of New Hires 2009 New Hire Employment Duration by Industry Financial Activities Professional, Management, and Information Services Only 1 Quarter 2 Quarters 31% 23% 23% 31% 21% 14% 11% 12% 12% Trade and Transportation 26% 35% Education and Health Care 27% 33% Manufacturing 27% 31% Mining and Utilities 27% 34% 15% Other Services 28% 32% 20% 11% 9% Public Administration 28% 34% 18% 12% 8% 3 Quarters Leisure Activities 4 Quarters Administration and Support Over 1 Year 21% Construction Agriculture 33% 20% 21% 18% 37% 39% 41% 46% 12% 10% 33% 27% 9% 14% 10% 11% 12% 18% 38% 7% 14% 9% 4% 6% 4% 16% 7% 3% 16% 6% 4% More Information Required a Survey Observation: Low job retention rates • Varies by season and industry • Likely to vary by worker demographics 1. Is it a problem? • Good worker turnover versus bad turnover • Cost to public assistance and worker training programs 2. Are there certain characteristics or skills associated with job retention / wage progression? Possible Job Match Outcomes Position was Seasonal or Temporary Both worker and employer are better off. Job Retention: No Skill Shortage: No Worker Leaves for Better Options Worker better off; employer’s welfare depends on costs of hire vs. gains from work provided. Job Retention: No Skill Shortage: No Worker is Fired Both worker and employer are worse off. Worker Remains Employed Both worker and employer better off. Job Retention: No Skill Shortage: Yes Job Retention: Yes Skill Shortage: No Things other than Skills that Matter to Job Retention • Worker education and training level • Matching was done with available records from education and labor agencies, but 71% of new hires had missing education information. • Age (experience), gender, race, veteran status • Difficulty obtaining driver’s license data • Some matching with Montana jobs database indicated new hires were younger than workers overall. • Job characteristics: wage, benefits, full-time status • Employer characteristics: provide training to workers Survey Details • Initial funding was provided by a competitive grant. • Sample drawn from newly hired workers based on UI wage records. • Sent to both private and public businesses. • 94% to private sector, 5.4% to local government, 0% to federal government • Not sent to Public Administration Industry or private household workers. • After 1st Panel, excluded those earning less than $150. Response Rates and Number Mailed 80% 70% 60% 50% 40% 30% 20% 10% 0% 3,950 740 1,000 644 300 800 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 New Hire Job Outcomes After Two Quarters (Same Employer) Other/ Unknown 4% Laid off for Economic Reasons 2% Seasonal or Temporary Work 14% Still Working 41% Let go due to poor performance 8% Not New Hire 5% Worker Left Voluntarily* 26% *3% had poor skill ratings. Job Outcomes of Newly Hired Workers, Two Quarters after Hire, by Job Type Outcome Temporary or Seasonal Workers Permanent Full-Time Permanent PartTime Still Working 24% 46% 49% Poor Performance 5% 10% 8% Temporary or Seasonal Position 49% n.a. n.a. Voluntary Leave 20% 20% 38% * 2% 3% Economic Reasons Job Outcomes (Any Employer) Seasonal and Unemployed 7% Unknown and Employed 3% 80% Employed by some Employer Seasonal and Employed 7% Unknown/ Other and Unemployed 1% Laid Off and Employed 1% Let Go and Still Unemployed 2% Let Go and Employed 6% Employed 41% Not a New Hire 5% Left and Employed 17% Left and Still Unemployed 10% 43% had Wage Increases Likelihood of Wage Increase by Job Outcome 70% 60% 50% 40% 30% 20% 10% 0% Employed Fired and Employed Laid Off and Employed Left and Employed Preliminary data – not tested for significance. Seasonal and Employed 1st Question: Is it a problem? • While only 41% are with the same employer, 80% are re-employed elsewhere. • Employers may still have losses for hiring and training costs. • Employees may have costs in transitional work. • Mostly concerned with the 20% of new hires that are unemployed after being hired two quarters ago. • Voluntary leave (10%) – School? Retirement? Left State? • Seasonal (7%) • Fired or laid off and still unemployed (3%) -- Retraining? What Characteristics/ Skills are Associated with Job Retention/ Wage Progression? Service Orientation/ Customer Service Critical Thinking Reading Comprehension Operating Equipment Communication Following Instructions Time Management Safety Actively helping people and providing customer service Using logic and reasoning to identify approaches to problems Understanding written sentences and paragraphs Controlling operations of equipment or systems The ability to communicate effectively with others The ability to follow oral or written instructions Ability to manage time and stay on task The ability to maintain a safe work environment Job-Specific Technical Skills Skills specific to an occupation, such as drafting, special software, installation, maintenance, etc. Work Ethics Shows up on time, honest, positive attitude, appropriate personal appearance Number Skills Adding, subtracting, division, multiplication, fractions, statistics Physical Skills The use of physical strength and/ or stamina, skill in using one's hands What Skills are Important to Employers? Work Ethic 99% 1% Following Instructions 98% 2% Communication 95% 4% Time Management 95% 4% Safety 88% Critical Thinking 83% Service Orientation/ Customer Service 72% Reading Comprehention 70% Physical 68% Operating Equipment 12% 12% 17% 17% 63% Number 17% 61% Job-Specific Technical Skills 10% 20% 30% Neither Preliminary not weighted results. 50% 60% Unimportant 70% 6% 17% 14% 15% 18% 26% 40% 4% 20% 21% 54% 0% Important 9% 21% 80% 90% 100% Skill Importance Varies by Occupation Skill Important to Less Important or Unimportant to Work Ethic All Occupations Customer Service Sales and Related Occupations Farming, Fishing, and Forestry Occupations Production Occupations Critical Thinking Legal and Management Occupations Life, Physical, and Social Science Occupations Reading Comprehension Legal and Healthcare Practitioners Occupations Farming, Fishing, and Forestry Protective Services Operating Equipment Installation and Repair, Production, and Computer Occupations Community and Social Services Safety Protective Service, Construction and Extraction, Production Occupations Legal Job-Specific Technical Skills Healthcare Practitioners, Computer and Mathematical, Architecture and Engineering Transportation and Material Moving Protective Services Number Skills Management, Architecture and Engineering Building and Grounds Workers Percent of Workers with Inadequate Skills Skill Retained Workers Poor Performance * 35.6% Critical Thinking 6.3% 50.2% Operating Equipment 0.9% 14.9% Communication 5.1% 34.5% Following Instructions 5.1% 61.1% Time Management 5.9% 43.5% Safety * 11.4% Job-Specific Technical Skills * 24.9% 4.9% 46.5% * 9.8% Service Orientation/ Customer Service Work Ethics Physical Skills Preliminary based on first two panels. QUESTIONS? MORE INFORMATION AVAILABLE AT WWW.LMI.MT.GOV Amy Watson [email protected] 406-444-3245