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Buffalo Region Struggles to Attract Highly Skilled Workers

The western region of New York is faced with an aging, shrinking and undiverse local workforce, and significant structural issues that make attracting and maintaining new workers a challenge. Revitalizing the workforce will be a large undertaking.

The skyline of Buffalo, N.Y.
The skyline of Buffalo, N.Y.
(TNS) — New York's Buffalo Niagara region's lingering people problem isn't getting any better.

Even with the economy cooling as prices soar and interest rates rise, local companies continue to look for workers.

They just have a really hard time finding the right ones.

And that's a big problem, not just for the companies, but for the region as a whole. Without enough workers, local companies won't be able to grow as fast as they otherwise might. They might even have to turn down work because they don't have the people to get it done.

But it goes beyond that. No company will move or expand here if it is going to be a struggle to find enough people to hire.

"Talent is the No. 1 priority for companies," said Rob Leteste, the business intelligence and workforce manager at Invest Buffalo Niagara, which last week released a report detailing the strengths and weaknesses of the local workforce. "It's the No. 1 thing that we are asked about from companies."

Unfortunately, the answers aren't encouraging.

"The labor market assessment lays out some pretty daunting challenges," Leteste said.

There continue to be structural problems with the Buffalo Niagara workforce, and last week's report bears that out.

The local workforce is aging — a long-term trend that was made worse by the wave of early retirements that occurred during the Covid-19 pandemic.

It's also shrinking, with about 15,000 workers dropping out of the labor pool since the beginning of the Covid-19 pandemic, partly because of a wave of early retirements.

Diversity is a problem, with mid-and upper-level positions largely filled by white workers.

"The Invest Buffalo Niagara region is home to an aging population and a declining labor force. These trends separate the region from its peers, which are younger, growing economies," the report said.

Training programs for skilled trades are offered mainly in areas that are predominantly white and not served by public transportation, although the Northland Workforce Training Center has helped close that gap. The training programs also tend to be small and scattered, which can be overwhelming to businesses and workers, the report said.

"The sheer number of programs makes it difficult for businesses and job seekers to easily discover and access these resources," the report said. "There is a critical need for greater centralized information, referrals and collaborations."

Suburban sprawl over the past 50 years means that many of the available jobs are on the region's fringes, in areas not served by public transportation and inaccessible for many city workers.

The labor participation rate among the region's Black workers is just 57 percent — the lowest among all metro areas with a population of 1 million or more, the report found. Across the metro area, the labor participation rate is 62.7 percent, which is in line with the national average, but the low rate among Black workers shows that there is a pool of untapped labor that could ease the hiring crunch, with the proper training and better public transportation.

"We have the folks already here," Leteste said.

But the challenge is to give workers on the fringe of the job market the skills they need, at least initially, to get and keep a job, and then take advantage of further training to advance to a better job.

It is also a matter of letting those workers outside the labor pool know that there are opportunities for them if they do start looking for work. Often, that comes from people watching their friends and neighbors get jobs and advance.

"Normally, you'd be relying on things like word of mouth — your neighbor or somebody who currently works at that company," Leteste said. "If your labor participation rate is substantially lower within a community, the likelihood of them having a neighbor who can be that referral to a new company or even describe what that career pathway looks like is lowered. So, increasing that awareness is something that we need to proactively be doing within those groups."

But there also are problems at the high end of the labor pool — and much of that is centered around the region's colleges and universities.

While those schools produce a lot of talented workers, especially in their four-year and post-secondary programs — the region still does a poor job keeping those workers here. A study by TechBuffalo found that nearly half of Buffalo Niagara technology graduates are international students, but seven of 10 tech grads take jobs outside of the region.

"We're attracting amazing talent to Western New York, but are we retaining it?" said Sarah Tanbakuchi, the president and CEO of TechBuffalo.

Sadly, the answer is no.

"We're giving away our talent that is highly trained and highly skilled," Tanbakuchi said.

Locally-based companies need to be the drivers of local workforce development efforts, she said.

"Engaged employers are absolutely critical," Tanbakuchi said. "It is important to have employer-led workforce development. It's absolutely absolutely essential. They need to not only show up when it comes to workforce, but they also need to drive the workforce strategy."

For tech workers, that could be stepping up efforts to help international technology graduates get the visas they need to stay — and work — here. For others, it could be working with local colleges — especially community colleges — to develop training programs that are tailored closely to their needs.

We're seeing more of that at both SUNY-Erie Community College and SUNY-Niagara County Community College, but there's the potential for much more.

That's because economists think the local labor market will remain tight, even as the economy cools.

"Where our unemployment rate has consistently been in the 3 percent range for months, we just don't have enough available workers to potentially fill some of the shortages that exist," said Julie Anna Golebiewski, a Canisius College economist.

So, they're already short-staffed entering a potential downturn, without the excess workers who they normally might cut in a recession. That's why Golebiewski isn't expecting unemployment to spike, even if the economy slows even more.

"Barring any significant downturn, I don't expect the unemployment rate to exceed what many economists would consider to be the natural rate," which is around 4 percent, Golebiewski said.

And there are signs of some slowing in the Buffalo Niagara job market.

The number of people filing for unemployment benefits for the first time fell sharply last week, but remained about 50 percent higher than the levels that were common during the summer and through most of October.

The number of people who are receiving unemployment benefits is 40 percent higher than it was a month ago — and is higher than it has been since April, according to State Labor Department data.

So it seems that some companies are cutting back, but so far, it is not enough to push up unemployment — a sign that workers who lose their jobs aren't having an especially hard time finding another one, said Timothy Glass, the Labor Department's regional economist in Buffalo.

"There are definitely firms that are feeling the pain of the start of an economic slowdown, and they're making their labor decisions accordingly," Golebiewski said. "I think we will continue to see that," especially as interest rates rise.

But so far, that modest slowdown isn't doing much to ease the region's people problem.

(c)2022 The Buffalo News (Buffalo, N.Y.) Distributed by Tribune Content Agency, LLC.
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