Workforce Occupations and Skills Projections

This study provides guidance for the counties served by the Upper Savannah Region in planning workforce development programming. Principal goals included:

A four step process was used to identify industries and occupations that were most likely to grow in both the Upper Savannah region and in proximate metropolitan counties.

Step 1: Identify Industry Clusters in the Region and Make Employment Projections by Industry. The industry targeting methodology of the Clemson University's EDA University Center for Economic Development was used to identify industry clusters in the Upper Savannah Region with good prospects for future growth and most favorable impacts on the regional economy. U.S. Bureau of Labor Statistics projections from 2006 to 2016 for expected growth across three digit NAICS industry categories were used to project industry employment growth in the Upper Savannah region and in proximate metropolitan counties, in both the targeted industry clusters and other industries in the region.

Step 2: Identify Occupation Growth Patterns in the Region. The industry employment estimates from Step 1 have specific occupational needs. U.S. Department of Commerce, U.S. Bureau of Labor Statistics data sources, and the South Carolina Industry/Occupation matrix were used to project the number of new hires in occupations associated with targeted industry clusters and with Jobs in Careers Clusters from the SC Department of Education.

Step 3: Identify Labor Force Skills Needed in the Region. The occupations identified in Step 2 have specific core knowledge and skill requirements. The desired knowledge and skills for principal occupational categories were identified using the U.S. Department of Labor ONET System and the WorkKeys scores needed for different occupations.

Stage 4: Identify Skill Gaps That May Impede Industry Growth. Labor skills available in the Upper Savannah Region ( using data from the South Carolina WorkKeys database) were compared with skills needed for the growth of industry in the region to identify skill gaps in the region. Interviews with area business leaders were used to refine and augment the findings from the data analyses.

Growth Industries. The industries expected to provide the most new job openings over the next decade in the Upper Savannah Region are identified in Table 1xs. Six industries were identified as “growing industry clusters” in the Upper Savannah Region: animal production (NAICS 112); heavy and civil engineering construction (NAICS 237); health and personal care stores (NAICS 446), warehousing and storage (NAICS 493); nursing and residential care facilities (NAICS 623); and religious, civic, professional, and similar organizations (NAICS 813).

Table 1XS. Targeted Industry Clusters, Upper Savannah Region, 2006

NAICS Code Industry

A. Growing Industry Clusters
112                                                                      Animal Production
237                                                                      Heavy and Civil Engineering Construction
446                                                                      Health and Personal Care Stores
493                                                                      Warehouse and Storage
623                                                                      Nursing and Residential Care Facilities,
813                                                                      Religious, Grantmaking, Civic, Professional, and Similar Organizations

B. Emerging Industry Clusters
236                                                                      Construction of Buildings
522                                                                      Credit Intermediation and Related Activities
541                                                                      Professional, Scientific, and Technical Services
551                                                                      Management of Companies and Enterprises
561                                                                      Administrative and Support Services
721                                                                      Accommodation
722                                                                      Food Services and Drinking Places
812                                                                      Personal and Laundry Services

C. Regional Strengths
111                                                                      Crop Production
311                                                                      Food Manufacturing
321                                                                      Wood Product Manufacturing
325                                                                      Chemical Manufacturing
331                                                                      Primary Metal Manufacturing
333                                                                      Machinery Manufacturing
335                                                                      Electrical Equipment, Appliance, and Component Manufacturing
447                                                                      Gasoline Stations
517                                                                      Telecommunications

_______________________________________________________________________________________

These industries have a significant local presence, positive employment change at the regional and national level from 2001 to 2006 and projected national growth from 2006 to 2016.

In the Upper Savannah Region, eight additional industries are “emerging industry clusters.” These industries are: construction of buildings (NAICS 236); credit intermediaries (NAICS 522); professional, scientific, and technical services (NAICS 541); management of companies (NAICS 551); administrative and support services (NAICS 561); accommodation (NAICS 721); food services and drinking places (NAICS 722); and personal and laundry services (NAICS 812). These industries lack a substantial regional presence but they exhibited employment growth at the national and regional levels from 2001 to 2006 and they have projected national growth for 2006-2016.
Nine industries were regional strengths with a strong presence in the region and strong regional growth from 2001 to 2006 but with negative growth nationally. The nine industries are: crop production (NAICS 111); food manufacturing (NAICS 311); wood products manufacturing (NAICS 321); chemical manufacturing (NAICS 325); primary metal manufacturing (NAICS 331); machinery manufacturing (NAICS 333); electrical equipment, appliance, and component manufacturing (NAICS 335); gasoline stations (NAICS 447); and telecommunications (NAICS 517).

Growth in Occupations. Projected job growth in the target industries (by occupations) is provided in Tales 2XS. Job growth in the Upper Savannah Region is expected to be most robust in the following occupations: healthcare services, food services, consumer services, and general services for businesses including lawyers, accountants, paralegals, and civil engineers.

Table 2XS Projected Employment by Occupation, Targeting Industry Clusters,
Upper Savannah Region, 2006-2016

___________________________________________________________________________________________________

Occupational opportunities in the proximate metropolitan counties showed a similar pattern. However, professional opportunities (such as financial managers) and skilled trades (such as electricians) had stronger projected growth rates in the metropolitan counties. Industry cluster development in the Upper Savannah Region offers few professional employment opportunities relative to the broad selection of employment opportunities in professional and skilled trade occupations available to residents willing to commute to nearby metropolitan counties.

In addition to target industries, the occupations expected to grow in the region include those in current industries that are not expected to be key players in the future of the regional economy. However, these “legacy” industries will continue to need employees over the next decade. Adding the target industry occupations to expected occupational growth in all other industries yields the projected occupational growth in all sectors of the regional economy. The fastest growth in new hires expected across all sectors in the region are displayed in Table 3XS. The new hires in the final column of Table 3XS include two components. First, there is either positive or negative job growth as the industry’s that hire these occupations grow or decline. Second, there is a expected retiree replacement component of the expected new hires over the decade.

Table 3XS. Projected Occupation Employment Growth, Upper Savannah Region, 2006-2016
New Hires From Job Growth and Retiree Replacement

Skill Gaps. Skill gaps exist where the number of jobs with specific skill requirements (the demand side of the labor market) exceeds the number of individuals with requisite skills to fill those jobs (the supply side of the labor market). Skills analysis focused on the three areas deemed as most critical (applied math (AM), reading for information (RI), and locating information (LI)).

Sample comparisons of skills supplies (labor force) and demands (jobs) are presented in Figure 1. First, employment prospects for individuals with low math and reading scores are not promising in the Upper Savannah Region or in the Commuting Area with 10.6% of tested individuals having very low scores in applied mathematics and reading for information, yet only 2.5% or less of job openings in the region and metropolitan areas within commuting distance are projected for occupations with those skill requirements.

Second, a potential shortage exists for individuals to fill jobs with “Below Average” scores (AM, RI, LI = 3 or 4) with about 58% of the projected job opportunities in such occupations but with only 30.1% of the individuals' test scores meeting (but not exceeding) these desired minimum scores. This job gap (demand for jobs exceeds the supply of appropriately skilled workers) can be reduced by (a) employers accepting workers with skills less than the desired minimum (from the “Low Math Skills” surplus labor), and/or (b) area workers taking jobs with skill requirements below the workers' skill levels (from the “Above Average” surplus labor).

Third, 27.5% of the labor force had above average or above average scores (AM, LI and RI of 4 or 5) but occupations requiring those score combinations (such as computer programmers, health technologists, tool and die makers, and teacher assistants) are projected to provide 12.8 % of need in the Upper Savannah Region. Many individuals with above average test scores will face the choice of commuting outside the region for jobs that need their skills or working in an occupation that does not use all of their skills.

Fourth, over 17% of the area workforce scored above average or high on math and reading (AM and RI = 5 or greater) but only approximately 4% of the projected jobs in both the Upper Savannah Region and the Commuting Area are in occupations that require these skills. Occupations in these two skill clusters include operations research analysts, numerical tool programmers, industrial engineers, electricians, and pharmacy technicians. These individuals with strong test scores but relatively few local employment opportunities represent prime candidates for a "brain drain" out-migration. This potential brain drain can be reduced if (a) new industries are attracted or developed (entrepreneurial activity) that are skilled-labor intensive, or (b) the skilled workers commute to nearby metropolitan areas for employment but they continue to reside in the Upper Savannah Region.

Finally, workforce supply and demand skills appear to be well matched in some cases. For example, our industry growth analysis indicates relatively strong growth in jobs in health care related occupations. Many of these occupations are in occupation-skill cluster AM 4, LI 4, RI 4 (e.g., radiological technologists, licensed practical nurses, medical laboratory technologists) and cluster AM 4, LI 4, RI 5 (e.g., registered nurses, dietitians and nutritionists, occupational health specialists). Approximately 20% of the individuals tested had WorkKey test scores consistent with the skills required for the health-related occupations. The supply and demand for skilled workers in these occupation-skill categories are a relatively good match.

Jobs in Career Clusters. High school Career and Technology Education (CATE) majors can be promoted that reflect the region's labor force needs in the future. Future occupational opportunities were projected for each of the “Jobs in Career Clusters” (SC Department of Education) for the Upper Savannah Region and proximate metropolitan counties. Figure 2 shows the expected distribution of new hires over the next decade in each of these Career Clusters for the Upper Savannah Region.

Figure 2 Career Clusters Ranked by Total New Hires

In the Upper Savannah Region, a minimum of 1,000 new hires are expected in the career clusters in Business, Management, and Administration (3,307), Not Considered Career Options (2,192), Manufacturing (2,003), Health Sciences (1,741), Transportation, Distribution and Logistics (1,600), Law, Public Safety and Security (1,519), and Architecture and Construction (1,122). The expected new hires in specific occupations within each career cluster are shown in Appendix Table A-13. The 20 occupations that are expected to have the largest numbers of new hires in the region through 2016 are displayed in Table 4XS.

**Table 4XS. Top 20 Occupations Across All Career Clusters, Ranked by New Hires, Upper Savannah Region**
Occupation name	Jobs in CareerCluster	2006 Occupation Employ	2016 Occupation Employ	Total New Hires
Office Clerks, General	Business, Management, and Adminstration	1485	1966	481
Laborers and Freight, Stock	Transportation, Distribution and Logistics	1688	2167	479
Cashiers	Non-Career Options	1662	2135	472
Retail Salespersons	Non-Career Options	1350	1730	380
Nursing Aides, Orderlies, and Attendants	Health Science	783	1138	355
Police and Sheriff's Patrol Officers	Law, Public Safety and Security	1175	1523	348
Waiters and Waitresses	Non-Career Options	1015	1362	347
Maintenance and Repair Workers	Manufacturing	1424	1766	342
Secretaries, Except Legal, Medical	Business, Management, and Administration	962	1278	316
Janitors and Cleaners, Except Maids	Business, Management, and Aministration	809	1107	298
Home Health Aides	health Science	737	1029	292
Combined Food Preparation and Serving	Non-Career Options	827	1108	281
Correctional Officers and Jailers	Law, Public Safety and Security	945	1196	273
General and Operations Managers	Business, Management, and Administration	923	1196	273
First-Line Supervisors/Managers of Office	Business, Management, and Administration	865	1137	272
Registered Nurses	health Science	617	860	243
Truck Drivers, Heavy and Tractor-Trailer	Transportation, Distribution and Logistics	829	1070	241
Bookkeeping, Accounting, and Auditing	Finance	765	1005	240
Customer Service Representatives	Business, Management, and Administration	760	990	231
Stock Clerks and Order Fillers	Marketing, Sales and Service	791	1016	225

Work Skill Needs Identified by Business Focus Groups. A needs assessment concerning barriers to growth, general strengths and weaknesses, and current and future gaps in regional labor skills was also conducted with local businesses in each of the Upper Savannah counties. While differences exist, communities share similar strengths and weaknesses regarding issues faced in workforce development, general economic growth, and K-12 and higher education partnerships. The majority of interviewed firms indicated expansion plans despite the current national economic downtown.

However, firms generally indicated that finding both good skilled and unskilled labor served as a challenge to expansion plans in several cases. Market demand and financial issues were also barriers to growth in some cases. In terms of labor skill gaps, a general theme was the lack of basic computing, math, and problem solving skills and even writing and verbal communication skills. Computer skills are critical now and in the future, but workers do not necessarily possess such skills. Certain industries faced problems in finding specialized labor, such as welders, who are in high demand across the region, and Registered Nurses (RNs) and other nurses for the healthcare sector. Workers with highly specialized skills, such as processing engineers, usually have to be attracted from elsewhere and firms generally have difficulty in competing for such people in a national market. Area firms are also drawing from the same, often shallow, labor pool.

The need for soft skills, including strong work ethic and enhanced leadership, is becoming increasingly important-in part due to reductions in the size of middle management. However, many new workers lacked soft skills. Several firms indicated a greater need for more focus on the K-12 educational system in meeting the needs of students who will not attend a four year college or university. Many felt that a strong partnership between local school systems, businesses and community colleges should be used to strengthen training efforts and to market a wide range of career and training opportunities to students at a younger age.

Firms felt that the general small town nature of their local communities was a strength and a weakness with aspects such as affordable housing and a safe, caring community serving as a plus, and the lack of urban amenities as a disadvantage. Some communities were somewhat isolated (viewed as a distinct weakness) while others had very good access through the Interstate Highway system with its accompanying benefits (such as ease of attracting outside firms) and problems (such as retail leakage to urban areas).

I. TARGETING INDUSTRY CLUSTERS: UPPER SAVANNAH COG COUNCIL OF GOVERNMENTS REGION

One of the principal goals of this project is to (1) to identify the industries and occupations for which future employment growth is most likely, and (2) document the WorkKey skills required in those occupations. The WorkKey skills needed in the future jobs may be compared to the region's current skill distribution to identify skill gaps or deficiencies. Regional education and training programs may then be targeted at specific skill deficiencies so that the region's labor force is able to take advantage of future employment opportunities.

The methodology for assessing future occupational opportunities and labor skill requirements focuses on industry clusters and consists of four principal steps.
Step I. The Clemson University UCED industry targeting methodology is used to identify the industries clusters with the strongest job generation potential for the region.
Step II. The occupation mix of the target industries of Step I are documented using the BLS industry-occupation matrix for the nation.
Step III. The baseline of regional jobs by occupations from Step II is projected to 2016 using the Bureau of Labor Statistics (BSL) 2006-2016 industry growth projections. Differences between current (2006) and projected (2016) jobs by occupations represent potential future employment opportunities in the industry clusters.
Step IV. Occupations are grouped by WorkKey skill characteristics. The number of future job opportunities by skill category is estimated by allocating the employment projections from Step III among the skill categories identified in the Gap Analysis section of the report.
The remaining discussion in this section provides detailed explanations of the four principal steps and summary findings regarding specific industries, occupations, and skills where employment opportunities in industry clusters are anticipated.

A. Step I: Identifying Industries with Strong Potential for Employment Growth

The objective of industry targeting is to identify industries in the Upper Savannah COG region and nearby metropolitan areas (Anderson, Greenville, Spartanburg, Aiken, Lexington, and Richland counties) with promising growth potential. An industry targeting program should focus on industries for which the region offers a competitive advantage in terms of labor skills and availability, location (proximity to input suppliers and product markets), and availability of public services. Regions often have a competitive advantage in attracting or growing businesses if those businesses are members of an "industry cluster." An industry cluster is a geographically bounded collection of similar and/or related firms that together create advantages for member firms and the local economy.
Industry clusters generally include firms with significant horizontal, vertical, and/or labor pooling linkages.

Firms in industry clusters may interact through purchase-sale relationships; interfirm collaboration in product development, marketing, or research; or a shared reliance on specialized services and labor markets.

Industry clusters provide a strong potential for job growth among cluster firms because the concentration of an industry at a particular location may result in significant cost savings to firms in the cluster. These cost savings are referred to as localization economies. Sources of potential savings include a greater availability of specialized input suppliers and business services; a larger pool of trained, specialized workers; public infrastructure investments geared to the needs of a particular industry; financial markets familiar with the industry; and an enhanced likelihood of interfirm technology and information transfers.

Industry clusters also enhance innovative activity, entrepreneurship, and small business development among cluster firms. The adoption of new production technologies is more prominent and easily attained among firms in industry clusters. Proximity between firms and their input suppliers and product markets also enhances the flow of goods through the production system. Finally, ready access to product and input markets enables firms to quickly adapt to market changes.

Selection Criteria. Industry clusters in the Upper Savannah COG counties were targeted at the three-digit NAICS level. A list of the three-digit NAICS codes is provided in Appendix Table A.1. To identify industry clusters with desired characteristics, five screening criteria were used:
1. Five or more establishments in the multi-county region in 2006.
2. Area industry employment was greater than 300 in 2006.
3. An industry specialization index--the Location Quotient (LQ)--for the Upper
Savannah Region exceeded 1.00 in 1006.

4. Industry employment growth was positive for the region and the nation for 2001 to
2006.

5. The industry's BLS projected national employment growth rate for 2006-2016 is positive.

Screening criteria 1 and 2 identify three-digit NAICS manufacturing industries that had a significant presence in the region in 2006. The employment generation potential (based on past and projected employment growth rates) and the "Location Quotient" criteria are used to identify industries for which the Upper Savannah region exhibited a competitive advantage in attracting or developing. The Location Quotient (LQ) measure is calculated as follows.

                                   Area Three-digit NAICS Industry Employment in Year t
Industry                                       Total Area Employment in Year t
Location        =           _____________________________________________
Quotient
                                    U.S. three-digit NAICS Industry Employment in Year t
                                                      Total US Employment in Year t

A location quotient (LQ) greater than one implies that the area is "specialized" in that industry compared to the nation as a whole. That is, the region has been, over time, relatively successful in attracting or nurturing employment in a specific industry. Alternatively, an LQ less than one indicates that the area has a relatively small share of the industry's employment compared to the U.S. average. Table 1.1 provides an example of an LQ calculation for Wood Products Manufacturing (NAICS 321). The data used in the industry targeting analysis (industry establishment numbers, employment, employment growth rates, and location quotients) are provided in Table 1.2.

Growing Industry Clusters. Six industries (three-digit NAICS classification) met the cluster screening criteria and were identified as regional industry clusters with a significant local presence and positive employment change at the regional and national level. These industries are animal production (NAICS 112); heavy and civil engineering construction (NAICS 237); health and personal care stores (NAICS 446), warehousing and storage (NAICS 493); nursing

Table 1.1. Example of Calculation of Location Quotient for NAICS 321, Wood Products Manufacturing

            - Area employment, NAICS 321                               1,528
            - Area private employment, total                              51,785
            - U.S. employment, NAICS 321                           555,352
            - U.S. private employment total                    112,719,300

                LQ =                           0.0295       =   5.99
                                 0.0049

and residential care facilities (NAICS 623); and religious, civic, professional, and similar organizations (NAICS 813).

Emerging Industry Clusters. Eight additional industries exhibited LQs less than 1.00 but positive employment growth at the regional and national levels for 2001-2006 and positive employment projections nationally for 2006-2016. We refer to these industries as emerging industry clusters because they are "under-represented" in 2006, but strong employment growth gives them the potential to develop into clusters. These industries are: construction of buildings (NAICS 236); credit intermediaries (NAICS 522); professional, scientific, and technical services (NAICS 541); management of companies (NAICS 551); administrative and support services (NAICS 561); accommodation (NAICS 721); food services and drinking places (NAICS 722); and personal and laundry services (NAICS 812).

Regional Strengths. Nine industries in the Upper Savannah COG region had strong regional employment growth from 2001 to 2006 and relative high LQ values, but the industries had negative employment change for the nation. These local industries are going against their national employment trends, and we refer to the industries as "Regional Strengths." The nine industries are: crop production (NAICS 111); food manufacturing (NAICS 311); wood products manufacturing (NAICS 321); chemical manufacturing (NAICS 325); primary metal manufacturing (NAICS 331); machinery manufacturing (NAICS 333); electrical equipment, appliance, and component manufacturing (NAICS 335); gasoline stations (NAICS 447); and telecommunications (NAICS 517). Table 1.3 provides a summary listing of industries in the three cluster categories (growing clusters, emerging clusters, regional strengths) for the Upper Savannah COG region.

Cluster Selection Criteria and Results: Contiguous Metropolitan Core Counties.

Six metro core counties are in the commuting range of the Upper Savannah COG region (Greenville, Spartanburg, Anderson, Aiken, Lexington, and Richland). Industry clusters in these counties were identified using five screening criteria.
(1) Fifty (50) or more establishments in the multi-county region in 2006.
(2) Regional industry employment exceeded 3000 in 2006.
(3) Regional LQ exceeded 1.00 in 2006.
(4) Industry employment growth was positive for the region and the nation for 2001 to 2006.
(5) The industry's projected employment growth rate (BLS) for 2006-2016 is positive.
Table 1.4 provides the establishment numbers, employment growth rates, and LQs for industries in Wthe metropolitan core counties. Fourteen three-digit (NAICS) industries met all five of the screening criteria and are classified as "growing industry clusters" (Table 1.5). Thirteen industries exhibited LQ's less than 1.00 but positive employment growth rates for 2001-2006 and positive growth projections for 2006-2016. These thirteen industries are classified as "emerging clusters" in the metro core counties (Table 1.5). Finally, nine industries exhibited positive employment growth in the metro areas for 2006-2016 and relatively high LQ's, but national employment growth was negative. These industry clusters are classified as "regional strengths" and industry types (3-digit NAICS) also are provided in Table 1.5.

The U.S. Bureau of Labor Statistics (BLS) provides national employment by occupation for 3-digit and 4-digit NAICS industries. For example, in the Textile Mill Industry (NAICS 313), employment data is provided for 14 specific management occupations (Soc 11-1011 through SOC 11-9199) and five engineering occupations (SOC 17-2041 through 17-3026). The BLS industry- occupation matrix also provides the percent of total national employment in the industry for each occupation. The national "industry employment shares by occupations" are applied to the Upper Savannah COG 2006 industry employment data for the identified industry clusters. For example, 10.46% of the nations Textile Mill (NAICS 313) workers are classified as "textile knitting and weaving machinery setters, operators, and tenders" (SOC 51-6063). Thus, we assumed that 10.46% of the textile mill workers in the Upper Savannah COG also are in occupation SOC 51-6063. The use of national occupation shares on local employment data relies on the underlying assumption that the production technology used by area industries is similar to the national average.
Next, employment numbers by occupation are summed across the industries clusters. For example, accountants in Telecommunications (NAICS 517) are summed with accountants in Credit Intermediation and Related Activities (NAICS 522). The 2006 employment estimates by occupation for the Upper Savannah COG region industry clusters are provided in Table 1.6. A similar methodology was used for the core metropolitan counties in the Savannah COG commuting area, and the 2006 employment estimates by occupation for the industry clusters in the commuting area are presented in Table 1.7.

C. Step III. Projected Job Changes by Occupation, Industry Clusters, Savannah COG Region and Commuting Area.

The 2016 employment in the Savannah COG and commuting area industry clusters was estimated by multiplying the 2006 industry cluster employment by the BLS projected rate of employment change for 2006 to 2016 (see Tables 1.2 and 1.4 for projected rates of change). Next, the 2016 projected industry employment levels are distributed among occupations using the 2006 BLS industry-occupation matrix. That is, the methodology followed in Step II for 2006 industry data was applied Step III for 2016 industry employment projections. The underlying assumption in this step is that the occupational distribution in the industry remains relatively unchanged from 2006 to 2016. The projected 2016 employment by occupation for the Savannah COG and Commuting Area industry clusters is provided in Tables 1.6 and 1.7.

Differences between the estimates for 2006 and 2016 jobs, by occupations, represent future employment opportunities as a result of projected industry cluster growth. Tables 1.8 and 1.9 provide job change projections by occupation sorted from largest to smallest, and employment change estimates sorted by occupation codes (SOC) are presented in Tables 1.6 and 1.7. Tables 1.10 and 1.11 summarize the projected employment change by major occupation categories (2-digit SOC).

The projected jobs change by occupation reflects the industrial restructuring from manufacturing to trade and services. The largest anticipated job growth in the Savannah COG industry clusters is in healthcare services (e.g. nursing aides, home health aides, practical and registered nurses); food services industry (waiters and waitresses, cooks, food preparation workers); and consumer services (cashiers, customer service representatives, office clerks, landscaping); and general services for businesses (janitors, security guards, secretaries, and receptionists). Professional employment opportunities also are projected for the regional industry clusters in the Savannah COG region. Relatively large employment growth is predicted for lawyers, accountants, paralegals, and civil engineers.

Projected job changes by occupation in the commuting area (Table 1.9) also are concentrated in the service and trade industries (janitors, waiters and waitresses, retail salespersons, secretaries) and in the healthcare sector (registered nurses, nursing aides, home health aides, dental hygienists, and medical assistants). Professional employment opportunities are primarily in the legal and financial careers (lawyers, accountants, insurance sales, claims adjusters, financial managers) and skilled trades (carpenters, electricians, plumbers, and truck drivers). In summary, industry cluster development in the Upper Savannah COG region offers relatively few professional employment opportunities outside of careers in finance, law, or medicine. A much broader selection of employment opportunities in professional and skilled trade occupations is available to Upper Savannah COG region residents if these individuals are willing and able to commute to nearby metropolitan core counties.

The underlying goal of this project is to determine if residents of the Upper Savannah COG region have the skill characteristics (as identified by WorkKeys) to take advantage of employment opportunities forthcoming in the industry clusters and other regional industries. Assessments of the skill requirements of the occupations demanded by the identified industry clusters are provided in the "Labor Mark Gap Analysis" section of the report. In addition, the "gap analysis" estimates whether the current labor force has the skill characteristics to take advantage of future job openings in the areas industry cluster. That is, will the supply of skilled labor fit the demands of the expanding industrial sectors over the next ten years.

The goal of this research is to identify skill gaps in the labor market of the seven county Upper Savannah Region. Skill gaps exist where the number of jobs with specific skill requirements (the demand side of the labor market) exceeds the number of individuals with requisite skills to fill those jobs (the supply side of the labor market). The skill gaps for the Upper Savannah Region labor market will be identified by occupation clusters where the clusters are groupings of occupations with similar WorkKey scores. The methodology for identifying skill gaps has four principal steps.

Step 1. Group occupations into clusters that have similar skill requirements (occupational profiles) based on (a) WorkKey scores for selected worker attributes and (b) the share of job profiles that provided a score for that specific task or attribute.

Step 2. Estimate 2006-2016 job creation for each occupation-skill cluster designated in Step 1.

Step 3. Estimate labor availability in the Upper Savannah Region by worker skills as reflected in WorkKey scores.

Step 4. Compare share of jobs creation by skill cluster with share of labor force with skills appropriate for that cluster. Skill gaps exist for clusters where the share of jobs created exceeds the share of labor with matching skills.

An explanation of the methodology and data used to identify skill gaps for the Upper Savannah Region follows.

The ACT WorkKeys database provides information on subject matter experts' (SMEs) perceptions of necessary skills for 434 occupations. SMEs conducted assessments of 4668 jobs, and the resulting 4668 job profiles were allocated among 434 occupations. Many of the occupation categories have multiple job profiles (e.g., combination machine tool operators (SOC 51-4081.02) listed 34 job profiles) while some occupations had skills assessments based on only one job profile (e.g. compensation and benefits manager (SOC 11-3041.00) and construction and building inspectors (SOC 474011.00)). Three examples of the WorkKeys’ occupation profiles are provided in Table 2.1. This study focuses on the three skill areas deemed most critical by the South Carolina Department of Commerce: applied mathematics (AM), reading for information (RI), and locating information (LI).

The metrics used to group occupations by WorkKeys skills is a function of the median scores for AM, LI, and RI, and the share of job profiles in an occupation that provided a score for AM, LI, or RI. For example, 26 job profiles were available for computer support specialists (SOC 15-1041), yet only 16 profiles considered AM important enough to provide a score and only 21 considered LI relevant enough to list a score. Thus, the median score for Applied Mathematics (5) was weighted by the share of profiles that provided AM scores (16/26 = .62, .62 x 5 = 3.1). The median score for AM for computer support specialists was adjusted down from 5 to 3 because only 60% of the job profiles provided scores for AM. Similarly, the median score for Locating Information (LI) was adjusted down from 4 to 3.2 (4 x .81) to account for LI scores in only 21 out of 26 job profiles. Table2.1 provides the adjustment rate and the adjusted median scores for the three sample occupations.

The adjusted WorkKeys scores for AM, LI, and RI for the 434 available occupations were grouped into "skills clusters" using the statistical procedure cluster analysis. Cluster analysis groups the occupations such that the "within group differences" in WorkKeys scores are relatively small and the "between group differences" in scores are relatively large. For example, 54 occupations with AM, LI, and RI scores of three (3) were grouped in one occupation cluster while 14 other occupations with AM = 3, LI = 4, and RI = 5 were grouped in another occupation cluster. A summary of the 25 occupation-skill groupings or skill clusters is provided in Table 2.2, and a list of occupations in each skill cluster is presented in Table 2.3.

The 2006 estimates for private sector jobs by occupation-skill category for the Upper Savannah Region and the commuting area are provided in Tables 2.4 and 2.5. Jobs by occupational skill category were derived using a three stage process.

The above three stage process also was followed for the 2006 employment in the Commuting Area. The 2006 total employment by occupation for the Commuting Areas is presented in Appendix Table A-4. The 2006 distribution of employment by occupational-skill cluster is provided in Table 2.4 for the Upper Savannah Region and in Table 2.5 for the Commuting Area.

The 2016 private sector employment projections for the 25 occupation - skill clusters were estimated as follows.

The reader should note that the 2006-2016 employment, occupation, and labor skill projections are based on two principal assumptions. First, there are no dramatic changes to the area industrial composition during the period. Second, the 2016 and 2006 occupational compositions in an industry are similar. These two assumptions are not unreasonable for a relatively short time period.

Jobs Creation, Private Sector. Job growth by occupation - skill cluster was estimated by the difference between the 2006 and 2016 employment estimates. The percentage of total job growth in each occupation-skill cluster is presented in Tables 2.4 and 2.5 for the Upper Savannah Region and Commuting Area, respectively. The largest share of job growth by occupation-skill cluster is cluster AM = 3, LI = 4, RI = 4 for both the Upper Savannah Region (15.08%) and the Commuting Area (16.38%). In general, however, job growth in the Commuting Area is estimated to occur in clusters with higher skill requirements (e.g., AM = 4, RI = 4, LI = 4, and AM = 5, RI = 5, LI = 5) then job change in the Upper Savannah Region. This finding is consistent with a concentration of knowledge-based jobs in metropolitan areas.

Job Replacements, Private Sector. Employment opportunities in a region are a function of industry growth. Employment opportunities also are created when workers retire or change jobs. The BLS projects 33.4 million jobs will become available nationally in the next ten years as a result of employment turnover. Total 2006 employment in the U.S. was 145 million, thus the average employment turnover rate for the nation is projected to be approximately 23% (33.4m/145m). The 2006 employment in each occupation - skill cluster was multiplied by .23 to provide estimates of jobs available due to replacements. Tables 2.6 and 2.7 provide the estimated employment change for job replacements by occupation - skill cluster for the Upper Savannah Region and the Commuting Area, respectively. The numbers of replacement workers by occupation are presented in Appendix Tables A-3 and A-4. Appendix Tables A-7 and A-8 provide the total employment change (job creations plus replacements) sorted by projected change in employment from 2006 to 2016. Job replacements in the two regions occur primarily in skill clusters with AM scores of 3 or less. Relatively few employment opportunities for high skilled jobs will be created through people retiring or leaving a job.

Total Job Change, Private Sector. New employment opportunities in the private sector for 2006 to 2016 are the sum of job creation plus job replacements. Tables 2.8 and 2.9 provide estimated total job change for Upper Savannah Region and the surrounding Metro Core counties. The total job change distribution by skill cluster is similar to the skills distribution for replacement jobs because our estimates for job replacements by occupation exceed those for jobs creation.

Employment Opportunities, Public Sector. Future job opportunities for residents of the Upper Savannah Region also will be available in the public sector (local, state, and federal government agencies). The methodology for estimating future employment opportunities in the public sector is identical to that used for estimating the 2006-2016 job growth and job replacements for industries in the private sector. The predicted public sector job growth by occupation-skill cluster is presented in Table 2.10 for the Upper Savannah Region and in Table 2.11 for the Commuting Area. Job opportunities created by retirees and job changes are again estimated as 23% of the base year (2006) employment. Tables 2.12 and 2.13 present the number of potential job openings for replacements for the Upper Savannah Region and the Commuting Area, respectively. Finally, the total job opportunities created in the public sector through job growth and replacements are provided in Table 2.14 for the Upper Savannah Region and Table 2.15 for the metro Commuting Area. Appendix Tables A-9 through A-12 provide the 2006 and projected 2016 employment by occupation for public sector jobs in the Upper Savannah Region and Commuting Area.

Public sector job openings (job growth and replacements) for the period 2006-2016 are estimated at approximately 4,900 for the Upper Savannah Region. The public sector employment opportunities are approximately one-third (4,866/14,568) the number of job openings predicted for the region's private sector. The distribution of public sector jobs by occupation-skill cluster is similar to that of private sector employers. The majority of jobs in both the private and public sectors have a minimum adjusted score of 3.0 on the three tests (AM, LI, RI).

C. Step 3. Labor Availability by Worker Skills as Reflected in the WorkKey Test Scores.

Labor availability by skill areas is estimated using test scores on the WorkKeys AM, LI, and RI tests for the Upper Savannah Region. Since 2002, more than 9,000 individuals have taken WorkKeys tests in the Upper Savannah Region counties (additional Upper Savannah area residents may have taken the WorkKeys exams outside the region). Among the 9,000 individuals, 4,032 people had recorded scores for the AM, LI, and RI exams. These 4,032 scores represent the "supply side" of labor skills in the region, and the individuals were assigned to an occupation-skill cluster based on their three scores. More than 2,000 of the individuals had scores identical to the occupation-skills cluster score (e.g., individual score was AM = 3, LI = 4, RI = 4, and an occupation-skills cluster adjusted score was AM = 3, LI = 4, RI = 4). The remaining individuals' scores were not perfect matches for the minimum adjusted scores for skills clusters. These scores were allocated to the skills cluster where the AM, LI, and RI was equal to or less than the individual's scores. For example, an individual with scores AM = 3, LI = 5, RI = 4 was placed in the category AM = 3, LI = 4, RI = 4. The individual met or exceeded the adjusted minimum scores for all three tests in the occupation-skill categories, thus, they were qualified for occupations in that occupation-skill cluster.

The distribution of the 4,032 individuals' WorkKeys scores among occupation-skill clusters is provided in Table 2.17. The occupation-skill clusters with the largest number of qualified individuals (supply of labor) are AM 5, LI 4, RI 4 (514); AM 4, LI 4, RI 5 (482); AM 5, LI 5, RI 6+ (359); and AM 6+, LI 4+, RI 4 + (355). Thus, more than 40 percent of the individuals in the sample qualified for occupations with moderate-to-high skill requirements. Alternatively, 257 (6.37%) of the individuals were allocated to the lowest occupation-skill cluster (AM = 0, LI = 0, RI = 0).

D. Step 4. Share of Employment Opportunities by Skill Cluster Versus Share of Labor Force

The final step in the labor skill gap analysis is to compare the relative supply of individuals with specific skills (percent of WorkKeys scores in occupation-skill cluster) with the relative demand for individuals with those skills (percent of projected job opportunities in the occupation-skill category). Table 2.18 provides the distributions of individuals with WorkKey scores and projected job opportunities in the Upper Savannah Region and the Commuting Area. Comparisons of skills supplies (labor force) and demands (jobs) present interesting observations regarding the Upper Savannah Region labor market.

(1) Approximately 7.0% of the individuals had very low scores in applied mathematics and reading for information (specifically, AM 0, LI 0, RI 0 and AM 0, LI 4, RI 0), yet less than 1.0% of job openings are projected for occupations with those skill requirements. Employment prospects for individuals with low math and reading scores are not promising in the Upper Savannah Region or in the Commuting Area.

(2) A potential shortage exists for individuals to fill jobs with low-to-moderate scores in the three critical areas (i.e., AM, LI, RI = 3 or 4). We estimate that almost 60% of the job opportunities (new jobs plus replacements) will be in occupations with test scores (AM, LI, and RI) of 3.0 or 4.0. Alternatively, only about 35% of the individuals' test scores met (but did not exceed) the desired minimum scores for those occupation-skill clusters. This job gap (demand for jobs exceeds the supply of appropriately skilled workers) can be reduced by (a) employers accepting workers with skills less than the desired minimum, and/or (b) area workers taking jobs with skill requirements below the workers' skill levels. For example, approximately 12% of the workers scored AM 4, LI 4, RI 5; but only 6% of area jobs are projected to require that skill mix. Many of these individuals may take jobs in the occupation-skill category AM 4, LI 4, RI 4 where a shortage of workers is predicted.

(3) Approximately 15% of the labor force had above average math scores (AM = 5) and LI and RI of 4 or 5. Occupations requiring those score combinations are projected to provide less than 5% of new jobs and job replacements in the Upper Savannah Region. Sample occupations include computer programmers, health technologists, tool and die makers, benefits managers, and teacher assistants. Many individuals with above average test scores will face the choice of commuting outside the region for jobs that need their skills or working in an occupation that does not use all of their skills. (Alternatively, some of the "noncluster" occupations may be a good skill fit for these individuals; however, WorkKeys test scores are not available for these other occupations in order to these this hypothesis.)

(4) Over 17% of the area workforce scored above average or high on math and reading (AM and RI = 5 or greater). Only 5% of the projected jobs in both the Upper Savannah Region and the Commuting Area are in occupations that require these skills. Occupations in these two skill clusters include operations research analysts, numerical tool programmers, industrial engineers, electricians, and pharmacy technicians. An absence of job opportunities for the highly skilled area workers may result in the relocation of these individuals to metropolitan areas with more knowledge economy employment opportunities. These individuals with strong test scores but relatively few local employment opportunities represent prime candidates for a "brain drain" out-migration. The Upper Savannah labor market area can reduce this potential brain drain if (a) new industries are attracted or developed (entrepreneurial activity) that are skilled-labor intensive, or (b) the skilled workers commute to nearby metro areas for employment but they continue to reside in the Upper Savannah Region.

(5) The industry targeting analysis of Section I of this report indicates relatively strong growth in jobs in health care related occupations. Many of these occupations are in occupation-skill cluster AM 4, LI 4, RI 4 (e.g., radiological technologists, licensed practical nurses, medical laboratory technologists) and cluster AM 4, LI 4, RI 5 (e.g., registered nurses, dietitians and nutritionists, occupational health specialists). Approximately 20% of the individuals tested had WorkKey test scores consistent with the skills required for the health-related occupations. The supply and demand for skilled workers in these occupation-skill categories are a relatively good match.

Educators and workforce planners need to identify occupations for which future employment growth is most likely in the Upper Savannah Region and proximate metropolitan counties. Regional education and training programs may then be targeted at occupations with good employment prospects, and high school Career and Technology Education (CATE) majors can be promoted that reflect the region's labor force needs in the future.

To assess occupational opportunities in Jobs in Career Clusters identified by the SC Department of Education, industry growth patterns are documented for each county in the region and occupational requirements identified for each industry in the Upper Savannah Region and the set of proximate metropolitan counties. The analysis consists of four principal steps.

Step I. The Office of Career and Technology Education (CATE), South Carolina Department of Education, identifies 16 groups of “Jobs in Career Clusters.” Within each career cluster, a list of 12 leading occupations (those with the largest number of statewide jobs in 2004) is provided. The O*NET / SOC codes were assigned to “Career Clusters” using the "Perkins IV Crosswalks: Table 4 ONETs in Pathways" from the States' Career Cluster Initiative (http://www.careerclusters.org/index.php) and www.careerclusters.org/crosswalks.cfm. For discrepancies in an occupation placement, preference was given to the CATE listing: (http://ed.sc.gov/agency/offices/cate/jobsincareerclusters/SCJobsinCareerClusters.html).

Step II. Regional jobs by industry are estimated for 2006 from 3 digit county CEW(ES202) employment data from the Bureau of Labor Statistics, U.S. Department of Labor as adjusted for South Carolina counties by IMPLAN. The IMPLAN adjustments, where needed, provide estimates for non-disclosed industry employment by county at the three digit NAICS level of aggregation. Industry employment estimates for 2016 are made using the Bureau of Labor Statistics (BLS) 2006-2016 industry growth projections (Employment Outlook: 2006-2016. BLS. Monthly Labor Review. November 2007. 53-85).

Step III. The occupation mix (by SOC code) for each of the three digit NAICS industries in Step II is documented using the 2006 South Carolina staffing matrix. The share of employment in each occupation for a given industry is calculated. The 2006 industry employment and 2016 projections of industry employment from Step II are used with the occupational shares by industry to estimate total number of jobs expected for each occupation in 2006 and 2016.

Step IV. Occupations are grouped by “Jobs in Career Clusters” categories from Step I. The number of 2006 and 2016 job opportunities by occupation for each of the 16 “Jobs in Career Clusters” groups is estimated by allocating the employment projections from Step III among the occupation estimates for the Upper Savannah Region and for the proximate metropolitan counties region.

Results for the Upper Savannah Region: Jobs in Career Clusters.
The South Carolina Department of Education allocates occupations into sixteen groups of “Jobs in Career Clusters” and one group of occupations that are classified as “Not Considered Career Options.” Figure 3.1 shows the ranking of these Career Clusters by the total number of new hires expected over the next decade.

At the other end of the spectrum in Figure 3.1, the career clusters with fewer than 1,000 new hires include Agriculture, Food and natural Resources (983), Marketing, Sales and Service (892), Hospitality and Tourism (826), Human Services and Consumer Services (816), Finance (690), Science, Technology, Engineering and Mathematics (476), Education and Training (451), Government and Public Administration (329), Information Technology (304), and Arts, A/V Technology and Communications (183).

Top 20 Occupations in New Hire Growth Across Career Clusters, Upper Savannah Region
Looking across all Jobs in Career Clusters, the 20 jobs occupations expected to have the most new hires over the next decade are shown in Table 3.1. Six of the top 20 occupations are in the Business, Management, and Administration Career Cluster. Four are in the Non Career Options cluster while three are in Health Sciences and two are in Transportation. All other Career Clusters have only one occupation in the top 20.

Generally, occupations with the largest number of expected openings per year over the next decade require only modest levels of skills. For example, the top three occupations in new hires are Office Clerks, Freight Handlers, and Cashiers, each expected to average about 47 new hires per year in the Upper Savannah Region. The AM, LI and RI scores needed are as follows:

SOC                                                                             SCORES   AM      LI        RI
43-9061.00      Office Clerks, General:                                             2.71     3.78     4.00
53-7062.03      Freight, Stock, and Material Movers                        2.85     4.00     2.85
41-2011.00      Cashiers:                                                                 3.00     3.50     3.00.
Alternatively, there are a handful of “top 20” new job hires that require higher scores. For example, Registered Nurses and Accounting Clerks, each expecting about 24 new hires per year, have the following AM., LI and RI score requirements:

SOC                                                                                 SCORES   AM      LI        RI
29-1111.00      Registered Nurses                                                      3.60     3.84     5.00
43-3031.00      Bookkeeping, Accounting, and Auditing Clerks           3.62     4.00    3.81.

The expected new hires in all occupations within each career cluster are shown in Appendix A-13.

Results for the Contiguous Metropolitan Core Counties: Jobs in Career Clusters.
Six metro core counties are in the commuting range of the Upper Savannah Region (Greenville, Spartanburg, Anderson, Aiken, Lexington, and Richland). Jobs in Career Clusters in these counties are listed in Appendix A-14. Figure 3.2 shows a ranking of the Career Clusters by the total number of New Hires expected over the next decade.

In the metro core counties, a minimum of 15,000 new hires are expected in the career clusters in Business, Management, and Administration (46,972), Not Considered Career Options (32,568), Manufacturing (22,709), Health Sciences (20,144), Transportation, Distribution and Logistics (19,854) and Architecture and Construction (16,780). The expected new hires in specific occupations within each career cluster are shown in Appendix A-14.

At the other end of the spectrum in Figure 3.2, the career clusters with fewer than 15,000 new hires include Law, Public Safety and Security (14,866), Marketing, Sales and Service (14,279), Finance (12,865), Hospitality and Tourism (10,310), Agriculture, Food and Natural Resources (8,409), Human Services and Consumer Services (7,665), Science, Technology, Engineering and Mathematics (5,927), Information Technology (5,123), Education and Training (4,822), Government and Public Administration (3,006), and Arts, A/V Technology and Communications (2,615).

Top 20 Occupations in New Hire Growth Across Career Clusters, Contiguous Metro Counties
The 20 jobs occupations expected to have the most new hires over the next decade, across all Jobs in Career Clusters, in the metro counties proximate to the Upper Savannah Region are listed in Table 3.2. Like the Upper Savannah Region, six of the top 20 occupations are in the Business, Management, and Administration Career Cluster. Four are in the Non Career Options cluster with retail and cashiers leading the list of new hires, while there are two each in Health Sciences and two in Transportation. All other Career Clusters have only one occupation in the top 20. The expected new hires in the contiguous metro counties across all occupations within each career cluster are shown in Appendix A-14.
The concordance in the types of job hires across the Upper Savannah Region and metro region is strong with retail and modest skill services dominating new hire opportunities. However, there is more need for higher level skills in the top 20 occupations in the metro region. For example, the metro region new hires for Registered Nurses ranks higher that in the Upper Savannah Region, while new hires for Nursing Aides and Home Health Aides are ranked higher in the Upper Savannah Region than in the metro region.

Throughout April, May, and June of 2008 a series of five focus groups and three telephone interviews were conducted across the seven county region served by the Upper Savannah Region. These seven counties represent communities of varying populations, job opportunities, education access, urban center access, and quality of life amenities; however, the results of these focus groups and interviews reveal that these communities share similar strengths and weaknesses regarding economic development and job expansion. Given these commonalities, there is considerable room for regional collaboration on a variety of issues related to general economic development, K-12 and higher education partnerships, and business and job creation.
The principal objectives for this phase of the project were to: (1) clarify barriers to regional firms’ expansion and growth; (2) identify concentrations of regional industries; (3) highlight regional gaps in labor skills now and in the future; and (4) confirm strength and weaknesses of these communities and the region as a whole. The 2005 passage of the Education and Economic Development Act (EEDA) makes the information gained from this study particularly relevant. One of the goals of this legislation is to determine gaps in traditional high school academic preparation and the requirements necessary to compete in a globally competitive economy. This knowledge will allow local communities and regions across the state to begin to work together with local business, higher education, and K-12 educators to put a system in place to ensure that all of South Carolina’s young people will learn a marketable skill that will enable them to live and work in a competitive global economy.

After the completion of the focus groups and interviews, a total of twenty-three participants had responded to a series of questions covering general economic development and job skills issues. The economic and industry sectors represented are presented in Table 4.1.

Table 4.1 Industry Sector Representatives

Industry/Sector	Representatives
Banking	1
Distribution	1
Economic Developers	3
Education	1
Food Processing	1
Healthcare	3
Housing	1
Lumber	1
Manufacturing	9
Municipal Utility	1
Retail	1
Total	23

Firm Production and Changes in Plant Expansion or Investments
Anecdotally, several economic developers in the region indicated that their communities experienced little, if any, of the effects of the recent national economic slowdown. Further, one economic developer indicated that rising transportation costs may work in favor of some industries as industry suppliers begin looking to move closer to clients. Another economic developer recognized that this year their community received a number of requests for information (RFI’s) for projects that have much larger capital investments than they have seen in the past.

The results from the first question appear to mirror these responses. Ten respondents said that they expect to see growth in their firms’ production over the next three years. Thus, over 50% of participating firms expect to see production growth in the near future. In general, several manufacturing sectors represented in the region are experiencing continued growth. Fabrication, composites, and advanced materials all continue to experience production growth.

Five firms indicated that they are planning physical plant expansion within the next three years. In all five cases these expansions will involve an increase in workforce. As well, all firms indicated there will be the implementation of new equipment and/or technology with these expansions. A number of additional respondents stated that they expect to see changes in firm investment over the next three years. Several of these firms acknowledged that it will be a challenge to find the skilled labor necessary to make these changes successful.
The industries that indicated a decline in production are those most closely associated with the housing industry. The lumber industry, construction suppliers, and residential development are all regional industries that have exhibited slower growth this year and may continue to experience slower growth in the near term if the housing slowdown continues. In addition, several respondents noted that higher fuel and electricity prices have begun to impact their production and will continue to impact production in the near- term.

Barriers to Firm Expansion and Industry Growth
One issue of commonality across the seven county region is the primary barrier to firm and industry expansion and growth. The majority of respondents indicated that labor supply issues are a primary barrier for their firm or region. Several respondents stated that finding skilled labor was a problem, while others asserted that finding good, unskilled labor was a challenge and in
some cases firms argued that both were a serious challenge. This particular weakness of the region highlights the importance of the 2005 EEDA, as well as supporting instruments, like this analysis, that can begin to fill these education and employment gaps across the state.
In addition to labor issues, Table 4.2 provides additional constraints that firms mentioned as barriers to firm expansion and industry growth. Not surprisingly, several firms noted the impact of rising fuel and utility costs, as well as rising transportation costs. This is an ongoing concern for all industries but one representative indicated that difficult choices would have to be made to cover these increasing costs if this trend continues. This respondent indicated that some of the choices firms may face in accounting for these rising costs include a continued shift to lean manufacturing, downsizing, steady outsourcing, and changes in equipment. Moreover, as fuel and utility costs continue to rise, sustainability issues may take on greater importance.

Table 4.2 Barriers to Firm and Industry Expansion

Barrier	Number of Times Cited
Financial	2
Fuel and Utility Costs	0
Labor Supply	8
Lack of Facilities	1
Language	1
Location	3
Market Demand	4
Regulation	1
Transportation Costs	1

Several firms mentioned that market demand and financial issues were also barriers to expansion and growth. One firm indicated that they were looking for a variety of additional market opportunities in new markets; another indicated that they had plans to change their plant focus from a specific product line to a machining facility of excellence, and another facility indicated that they planned to expand product lines to enhance their market coverage. In general, a lack of available facilities does not appear to be a big issue across the region. Finally, while federal and state regulation is an ongoing concern for a variety of industries across the region, this did not come up as a major constraint for regional firm expansion or industry growth.

Firm Concentration
Within the seven-county region there appears to be several well-defined local and/or regional concentrations of firms. The Newberry area has a composites industry concentration and while local collaboration is not formalized, there does appear to be considerable informal cooperation among these firms. Further, the fiberglass industry in Newberry is well established, as it began in 1965 and has continued to evolve to now include several additional firms. One respondent indicated that Newberry produced more fiberglass per capita than any other county in the state.

In addition to a composite concentration, there also appears to be a concentration of plastics manufacturing firms in the Laurens County area. Laurens County representatives estimate that 24% of Laurens County employment is in the plastics industry. However, a plastics industry concentration expands beyond Laurens County to the extent that there is a formal upstate plastics cluster. The Society of the Plastics Industry (SPI) was formed last fall and includes at least one Laurens County plastics firm. Currently, the industry is stable but it does not expect the growth that other regional firms may experience in the near future. One respondent indicated that the plastics industry is particularly hard hit by higher petroleum and fuel prices.
The entire region, with the possible exception of McCormick and Saluda, has a relatively high concentration of manufacturing firms. More specifically, the Greenwood and Abbeville area appear to have a strong concentration of machining and fabrication firms. One local firm that is not experiencing growth in its existing product line noted that it plans to become a specialized machining plant so that it can rapidly meet market demand and changing market conditions. Another firm stated that the fabrication industry is growing rapidly. While this industry is expected to grow in the near term, the major dilemma that local machining and fabrication firms appear to face is a shortage of skilled labor.

The healthcare industry is another important regional concentration of firms that was represented in this phase of the study. The healthcare sector is represented by a number of firms beyond hospitals; including assisted living centers, rehabilitation centers, surgical and out-patient clinics, physician’s offices, and home health care providers. One respondent noted that while there is competition among the healthcare providers in the region, there is also collaboration and referrals among healthcare providers and institutions. Many of these firms are in different but related sectors of the healthcare industry, thus the firms are not in direct competition with one another. This sector is also likely to experience continued growth as the baby boomer population ages and demands a greater variety of healthcare services.

Active adult residential development is another potential concentration of firms that was revealed by these focus groups and interviews. The representative of one residential development indicated that they did not view these firms as direct competitors but more as collaborators and partners. Their view is that the more regional developments in existence the more marketing of this region that occurs and the greater the potential for community visits by prospective new residents. Once prospective clients are visiting the region there is naturally a little competition, but this respondent also noted that these developments each have something unique to offer and they want potential residents to find the right neighborhood and lifestyle fit for their individual needs. Thus, while it does not appear there is formal collaboration among these communities, there does appear to be informal cooperation and an understanding that there are some economies of scale that can be achieved in marketing and promoting these communities.

Technical and Soft Skill Requirements
The question regarding specific technical skill requirements that are necessary for firms across the region brought a variety of responses. Some of these skills are necessarily specific to an industry or firm. Table 4.3 provides a summary of specific skills that were mentioned by respondents. One theme across all of the focus groups and interviews is that many employees need enhanced basic skills in computing, basic math and problem solving, and writing and verbal communication skills. Several respondents noted with concern the serious lack of math and problem solving skills that they continue to experience in their candidates for employment. In addition, more than one respondent noted that basic computing skills are required, and individuals will not get hired without these skills. However, we heard from more than one respondent the challenges of assuming that current or future employee’s possess basic computing skills. One firm recently went to an online benefits format and many employees were stressed and concerned about their ability to complete the necessary forms. In addition, one county indicated that they have many applicants that cannot complete an online job application. Thus, while computer skills may be necessary, they are not a given.

Table 4.3 Technical Skill Requirements

Technical Skill Requirements	Comments
AUTOCAD	2
Basic Computing	8
Basic Math/Problem Solving	6
Basic Writing and Communication Skills	3
Building Subcontractors; Plumbing, Electrical, and Brick Masons	1
Certified Nursing Assistants (CNA's)	1
Cut and Sew Skills	1
Electronics	3
Engineering (2 and 4 year)	4
Hospitality Management/Customer Service	4
Machinists/Mechanical	3
Medical Coding	1
Qualified Nursing Staff	1
Skilled Maintenance Staff	1
Universal Workers (cooking, housekeeping, and CNA)	1
Welders	4

With regard to other technical skill requirements, welders appear to be in high demand across the entire region. One firm stated that it foresees needing 90 welders in the near future. Piedmont Technical College has a welding program that one firm hired a few workers from, but the demand for welders in the region appears to outpace the number of welders that the region can produce. The region also appears to have similar challenges in keeping pace with the demand for CAD operators, machinists, two and four year engineering graduates, and employees trained in electronics.

The healthcare industry faces similar challenges as they seek specific healthcare related skills that are in demand across the region. Respondents in the healthcare industry noted the same primary concern as those in manufacturing: regional healthcare firms are all, basically, drawing from the same labor pool. Thus, when specific skills are in short supply, they all have challenges meeting the demand for these positions. One respondent indicated an ongoing need for RNs, LPNs, and CNAs. It was also noted that one local healthcare facility is training employees as “universal workers.” These are employees trained to work in any healthcare facility as a cook, in housekeeping, or as a CNA. This respondent also noted that employees are struggling to make the change from housekeeping and CNAs to “universal workers” and the firm may need to establish partnerships with PTC and local career centers to ensure that they can transition new and existing employees into this “universal worker” program.

The healthcare respondents noted that in competing for the same workforce they have had to be creative to attract new employees to their institution. One respondent noted that they have marketed a program where weekday employees can work 36 hours but get paid for 40, and weekend employees can work 32 hours but get paid for 40. To ensure that they get high quality employees who are focused on patient care, the healthcare industry has to continue to consider creative employment options to attract the best candidates.

Finding highly specialized skills appears to be a serious issue for many of the firms in the region. The challenge is that many of these skills are not in the region, thus firms have the additional challenge of attracting people to rural or small-town locations. Moreover, these individuals with specialized skills are difficult to attract because area firms and communities may have difficulty offering the national market wages necessary to be competitive. One respondent indicated that it took over eight months to find a specialized quality control person from out of state. In another example, it took nine months to find a processing engineer. One local community cannot afford to hire a specialized IT person, and even if they could, they claim that it would be difficult to attract someone to their location. Another firm has had ongoing challenges in hiring someone for a competitively paid engineering position. This firm attributes their inability to hire someone almost exclusively to location.

It was noted by several respondents that no matter what skills they are attempting to hire, the difficulty with the regional labor pool is that area firms are all drawing from the same labor supply. Thus, regional job competition across a wide range of skill sets enhances the challenge of finding these specific job skills. With regional labor competition and a shallow labor pool, employers across the region find it increasingly difficult to keep pace with the demand for a wide range of skill sets, especially those that are highly specialized.

One of the areas of most concern for local employers and economic developers is the attainment of soft skills before the point of hire. The overwhelming majority of respondents indicated that firms could not assume that a wide range of soft skills were attained by the point of hire. A sample of the kinds of soft skills that firms mentioned as important are presented in Table 4.4. A majority of respondents had concerns about prospective employees’ work ethic and general interpersonal skills. Several respondents indicated that one of their primary challenges was to find employees with a good work ethic. However, one group of firms said they do not experience problems with work ethic, and they have found excellent, hard working employees. One respondent stated that they also found hardworking and reliable employees, but they had to go into the Hispanic community to do so.

Table 4.4 Soft Skill Requirements

Basic Leadership

Change Management

Communication and Interpersonal Skills

Personal Healthcare Management

Personal Finance

Team Work

Work Ethic (punctuality, reliability, etc)

In addition to general work ethic issues, several respondents noted the increasing importance of soft skill and related issues that impact and overlap into the work environment. For example, two respondents noted the increasing use of credit and background checks at the point of hire. Thus, incoming employees need to have an understanding of their own personal financial situation and understand its impact on their potential employment. As well, one respondent mentioned that employees need to take greater ownership over their own healthcare and related healthcare benefits.

Many respondents also noted that employees need enhanced leadership, change management, and team work skills. It was noted that all of these skills are particularly important in the dynamic, global marketplace where employees will work. Further, one participant stated that with much of middle management trimmed or gone, leadership and management skills need to be incorporated across a diverse set of employee categories. For example, a healthcare representative noted that team work skills in healthcare are needed across all skill levels and are critical to effective patient care.
Another respondent indicated that area high schools do not focus enough on the workforce needs of the majority of children. These are the students that will not be attending a four year college or university. This respondent indicated that part of their labor problems stem from an inadequate focus at the K-12 grade levels on career development in areas other than those of a four year college. The K-12 education system, along with local community colleges and businesses, need to market these careers and career programs to kids at much younger ages to illustrate the wide range of career and training opportunities available to them. One respondent suggested that much stronger partnerships between local business needs, the high school career centers, and the local community college should be considered. Another respondent stated that local businesses should have a more active role in the decision making of local public schools, and the local schools should incorporate more business education across the curriculum.

When asked why these skills were so difficult to fill, none of the respondents indicated that this was specifically a local problem, and several indicated these were regional workforce issues that went beyond the locality. Several respondents indicated that they attribute most of these difficulties to location and the challenges in attracting and retaining high quality employees to rural, small-town locations. Several respondents noted that it was difficult to attract and keep young people in the region, and they further asserted that their goal was to keep and train or bring back as many skilled young professionals as possible.

Only one respondent indicated that wages were an issue in finding qualified workers to the region. However, several respondents noted that local education, or the education their potential hires had received, was a hindrance to the availability of qualified workers. Related to this, another participant stated that many potential hires had not received adequate or appropriate training. A different respondent noted that the high concentration of unskilled labor, with either no high school education or a GED, was a serious drawback to finding qualified workers. In addition, this is a continued detriment for local firm expansion and the inducement of new firms to the area.

Strength and Weaknesses of the Local Community
Quality of life issues were another common theme across this series of focus groups and interviews. In almost all of the discussions it was mentioned that the small town, rural nature of these communities was both a strength and a weakness. It is a strength in that these communities offer affordable housing, short commuting times, specialty stores and restaurants, access to recreation, and safe, caring communities. However, it is also a weakness in that many of these communities do not provide the amenities that a more urban center would offer. Many of these communities do not offer the full range of chain restaurants or retail outlets, or have access to a wide range of cultural, artistic, or athletic venues. Thus, when firms are trying to attract new firms or individual employees to the region, they have to work hard to sell the strength of these quality of life issues.

Other strengths mentioned are lower than average wages when compared against South Carolina metropolitan areas, as well as access to quality training opportunities through Piedmont Technical College. One respondent also said that their local community was proactive in attracting new firms to the areas, as well as assisting existing firms with expansion and growth opportunities. However, another respondent noted that their county was not aggressive in assisting existing business with expansion and growth opportunities. This respondent was, in fact, considering expansion plans outside the region. With this said, the majority of respondents indicated that the overall business climate in their community, and across the region, was supportive.
Several respondents mentioned climate and tourism as key strengths of the region. These individuals noted that local and regional tourism and recreation sectors could be more effectively marketed across the larger region. Most of these communities have easy access to lakes, quaint downtowns, and nearby hiking and biking trails. A recent strategic plan of one community revealed that its future lies in tourism and its economic development efforts should focus on strengthening this sector. The respondent from one regional active adult residential development indicated that their community planned to focus much more on the “active” outdoor lifestyle by linking hiking trails in nearby state and federal forests to their own community trails.

In addition, respondents also mentioned that their communities were cooperative, had good demographics with good quality people, and had ready access to natural resources. Several respondents mentioned that their location close to the center of the state and good access to the Interstate were important strengths. Access to the Interstate continued to come up in discussions as both a potential strength and a potential weakness. Those communities in the region that are very close to the Interstate see it as a strength in that it reduces transportation and travel costs for local residents and businesses. The proximity to urban centers also potentially makes these communities an easier sell to prospective new firms. However, for those communities close to the interstate, the interstate is also a weakness in that many community members go to the nearby urban center for much of their shopping, food, and entertainment options. Thus, many local residents leave the community to spend their disposable income in the larger, urban centers.

Several communities that are further from the interstate identify this as a weakness. As noted earlier, several respondents identified their rural location as a major weakness. Even though many of these communities can claim relatively close proximity to urban areas like Atlanta, Augusta, Charlotte, Columbia, or Greenville; some respondents said that their location continues to be a tough sell to certain types of potential residents and/or prospective businesses. Moreover, not all people like or appreciate the idea of small town environments where many people know your personal and professional business; these communities often do not lend themselves to anonymity. Related to this, a number of respondents noted that many of the individuals in upper management at local firms reside in nearby urban centers. While this occurs for a variety of reasons, it certainly makes it more difficult to attract certain skilled professions and new businesses to the community.

With new and existing businesses, the location and transportation issues are a concern for several reasons. Two respondents indicated that they have to go to Greenville or Columbia when they need emergency or specialized parts. This is time consuming and expensive for a firm if this happens on a regular basis. In addition, if the location increases transportation costs for the firm, location then becomes a serious consideration. As fuel costs and transportation costs continue to rise, location will become an even more important consideration for prospective new firms.

Concluding Comments
In conclusion, the seven county Upper Savannah Region has many areas of strength that it can continue to build and expand upon. The quality of life in the region is a strength that may not attract all potential job candidates or inquiring business, but it is one that can certainly be leveraged to attract a variety of new businesses and qualified employees. Further, with a strong partnership between local businesses, K-12 education, and local community colleges, training and education programs can be put in place to ensure that more young people stay in the region or can be attracted back to the region to both work and live.

While the majority of respondents indicated plans for expansion or growth in the near future; the majority of respondents also indicated that labor supply issues continue to be primary barriers to expansion and growth. The regional labor supply shortage is fueled by several factors: (1) a shallow regional labor pool; (2) a shortage of local workers moving into key training and skill based programs; and (3) locational characteristics that make it difficult to attract and retain skilled employees. In addition to these labor supply problems many respondents expressed a need for employees with stronger basic math, writing, communication, and general work ethic skills at the point of hire. The aforementioned labor supply challenges also highlight the need for strengthened partnerships between local school districts, career centers, businesses and community colleges. In addition, as several respondents noted, there must be a stronger and more focused effort to market and attract middle and high school students into training and career programs that will meet the current and future needs of local and regional business. With a concerted effort focused on improving regional education and training partnerships, the Upper Savannah Region can begin to move towards reducing the gap between the region’s labor demands and its labor supply.

a In addition to these respondents, we also talked with several other economic developers but because they were not formally interviewed these discussions are not included in the Table 4.1 results.

Occupation Name	2006 Occupation Employment	Projected Employment 2016	Projected Change in Jobs
Nursing Aides, Orderlies, and Attendants	679	835	157
Waiters and Waitresses	994	1101	107
Laborers and Freight, Stock, and Material Movers	920	1008	88
Janitors and Cleaners, Except Maids and Housekeeping	514	602	88
Combined Food Preparation and Serving Workers	757	837	81
Home Health Aides	289	356	67
Licensed Practical and Licensed Vocational Nurses	270	332	62
Office Clerks, General	390	445	56
Landscaping and Groundskeeping Workers	283	335	52
Maids and Housekeeping Cleaners	263	311	47
Security Guards	255	299	45
Cashiers	745	789	44
Secretaries, Except Legal, Medical, and Executive	281	324	44
Customer Service Representatives	405	446	41
General and Operations Managers	400	441	40
Cooks, Fast Food	373	411	38
Food Preparation Workers	284	320	36
Cooks, Restaurant	339	374	35
Lawyers	117	150	34
Bookkeeping, Accounting, and Auditing Clerks	282	315	33
First-Line Supervisors/Managers of Food Preparation	277	308	32
Registered Nurses	139	170	31
Stock Clerks and Order Fillers	232	263	30
Packers and Packagers, Hand	334	362	29
First-Line Supervisors/Managers of Office and Administrative	227	255	29
Accountants and Auditors	209	236	27
Paralegals and Legal Assistants	88	114	26
Legal Secretaries	85	109	24
Receptionists and INformation Clerks	140	163	23
Cooks, Institution and Cafeteria	125	148	23
Construction Laborers	202	224	23
Personal and Home Care Aides	99	121	22
Dishwashers	187	208	21
Industrial Truck and Tractor Operators	426	446	19
Carpenters	248	267	19
Tellers	221	240	19
Executive Secretaries and Administrative Assistants	198	216	19
Packaging and Filling Machine Operators and Tenders	357	375	18
Counter Attendants, Cafeteria, Food Concessions	151	166	15

Occupation Name	2006 Occupation Employment	2016 Occupation Employment	Total New Hires
Cashiers	1657	2128	471
Laborers and Freight, Stock, and Material Movers, Hand	1608	2063	455
Retail Salespersons	1330	1704	374
Waiters and Waitresses	1015	1362	347
Nursing Aides, Orderlies, and Attendants	735	1075	341
Office Clerks, General	826	1112	286
Combined Food Preparation and Serving Workers, Including Fast Food	817	1096	279
Janitors and Cleaners, Except Maids and Housekeeping Cleaners	674	932	258
General and Operations Managers	799	1035	236
Truck Drivers, Heavy and Tractor-Trailer	762	983	221
Stock Clerks and Order Fillers	741	951	210
Customer Service Representatives	687	896	209
Team Assemblers	1248	1456	208
Home Health Aides	382	569	187
Secretaries, Except Legal, Medical, and Executive	520	705	185
Child Care Workers	322	502	181
Bookkeeping, Accounting, and Auditing Clerks	564	744	180
Maintenance and Repair Workers, General	878	1058	180
Licensed Practical and Licensed Vocational Nurses	360	530	170
Landscaping and Groundskeeping Workers	379	545	167
Registered Nurses	338	499	161
Industrial Truck and Tractor Operators	651	795	144
Maids and Housekeeping Cleaners	374	518	143
Packers and Packagers, Hand	575	717	142
First-Line Supervisors/Managers of Office	424	565	141
Receptionists and Information Clerks	317	449	132
Food Preparation Workers	365	492	127
Cooks, Fast Food	380	506	126
First-Line Supervisors/Managers of REtail Sales Workers	421	539	118
Cooks, Restaurant	346	462	117
Personal and HOme Care Aides	229	345	116
Security Guards	295	410	115
Inspectors, Testers, Sorters, Samplers, and Weighters	794	907	113
Packaging and Filling Machine Operators and Tenders	499	612	113
Sales Representatives, Wholesale and Manufacturing	487	596	108
Executive Secretaries and Administrative Assistants	350	458	108
Helpers--Production Workers	675	783	108
Construction Laborers	312	419	106
Carpenters	340	444	104
First-Line Supervisors/Managers of Food Preparation and Serving Workers	296	399	103
Accountants and Auditors	308	405	98
TruckDrivers, Light or Delivery Services	335	431	96
First-Line Supervisors/Managers of Production and Operating Workers	765	856	91
Farmworkers and Laborers, Crop, Nursery, and Greenhouse	564	653	89
Shipping, Receiving, and Traffic Clerks	428	515	87
Medical Assistants	159	241	82
First-Line Supervisors/Managers of Construction Trades	242	320	79

1	Company name, name of representative, form of business
2	How do you see the market for your firm’s production changing over the next three years?
3	Do you envision any type of plant expansion or change in investment at your firm within the next three years. If yes, will this change result in an increase in workforce, additional product lines, new equipment or technology, process improvements, an increase in the demand for certain employee skills or any other changes.
4	What do you perceive are the primary barriers to firm expansion or industry growth? Some ideas: Financial, availability of labor, availability of land, labor skills, access to buildings, transportation services, electricity or water infrastructure, local, regional or state government regulation or barriers, markets for products.
5	Highlight one key strength and one key weakness of your community as a place to do business.
6	Do you perceive that there is a local or regional concentration of firms producing complementary or similar products or services?
7	What technical skills (not including computer) do your entry-level workers need to demonstrate? Of these technical skills, which ones are most likely not mastered at the point of hire? Give a job-specific example of how these technical skills are used in your organization.
8	Considering the technical skill needs that are difficult to fill, what are the reasons behind these recruitment challenges? Wages, local competition, education, etc?
9	What computer applications do your entry-level employees need to demonstrate? Of these applications, which ones are the most likely not mastered at the point of hire? Give a job-specific example of how this application is used in your organization.
10	What “soft skills” (interpersonal and communication skills) do your entry-level employees need to demonstrate? Of these “soft skills” which ones are most likely not mastered at the point of hire?
11	How will retirement affect your organization in the next five years?