JPMorgan Chase & Co. has released its Houston Skills Gap Report, which lays out a specific roadmap to address the mismatch between the needs of local employers and the skills of current job seekers. The report was released at the Greater Houston Partnership’s UpSkill Houston Workforce Summit on Nov. 12.
Specifically, the report provides a comprehensive look at available middle-skill jobs in the petrochemical and industrial/commercial construction industries. It offers data-driven steps that private-sector employers, city policy makers, community colleges, and training providers can take to fill these critical, good-paying jobs.
There currently are 1.4 million middle-skill jobs in Houston, the largest job family in the city’s workforce. Houston’s economy is projected to add another 74,000 middle-skill jobs annually for the next several years. About a fourth of that annual job creation is expected to be in the petrochemical sector and in the industrial and commercial construction sector.
“Like many cities around the world, Houston does not train enough skilled workers to fill jobs that are readily available,” said Gina Luna, chairman of JPMorgan Chase in Houston. “This report provides a data-driven pathway for Houston so that our business community, educational institutions, and social service organizations can work together and correct the mismatch between job skills and employment needs.”
The Greater Houston Partnership’s UpSkill Houston Workforce Summit is a first of its kind event convening business, education, and community leaders to discuss the middle skills workforce challenges and solutions for Houston. UpSkill Houston is the Partnership’s initiative to address key workforce challenges facing the Houston region and lay the foundation for the region’s long-term competitiveness.
“JPMorgan Chase’s contribution of the skills gap report is essential for the success of UpSkill Houston’s business-led effort to strengthen middle skills training and preparation,” said Bob Harvey, president and CEO of the Greater Houston Partnership. “The report’s data will help drive the coordination and alignment that are necessary to achieve the impact and performance our regional economy requires to continue its growth.”
Earlier this year, JPMorgan Chase announced a $5 million commitment to workforce training in Houston as part of the company’s $250 million, five-year global workforce readiness initiative, New Skills at Work, the largest ever private-sector effort aimed at addressing the skills gap. The local commitment by Chase includes a $500,000 grant to Lone Star College to expand training opportunities for adults who currently have low-skill, low-paying jobs. The commitment also includes a $250,000 grant to the Greater Houston Partnership’s Opportunity Houston 2.0 campaign to support UpSkill Houston.
Houston’s petrochemical sector and industrial/commercial construction industries have high demand for middle-skill workers, commonly defined as people with more than a high school diploma but less than a bachelor’s degree. Many of the middle-skill jobs highlighted in the report pay a good wage and offer career advancement.
The report found that the petrochemical and industrial and commercial construction sectors employed more than 258,000 Houston workers in 2013. Those sectors are expected to create nearly 19,000 jobs annually every year through 2017– almost 80,000 jobs.
Fueling that job growth is a construction boom for petrochemical plants. More than 120 petrochemical facilities, at an estimated $80 billion in total investments, are expected to be built and begin operation over the next few years, spurring the need for many more employees in both the petrochemical and construction sectors.
A significant challenge in meeting workforce demand is 90% of all middle-skills jobs in the petrochemical industry currently require 1–5 years of work experience. The report recommends creating more career pathways that meet the needs of employers while opening doors for more low-skilled youths and adults.
In Houston, more than 855,000 residents aged 25 and older do not have a high school diploma. The report also notes 47% of the area’s Hispanic residents – the largest and fast growing population – do not have a high school diploma. According to the report, career pathway programs provide an effective approach for preparing low-skilled job seekers for middle-skill jobs because they can be designed to integrate basic-skills training with the technical training needed for middle-skills credentials and careers.
Omar Gonzalez, a 35-year-old machinist in Houston, recently enrolled in upskill training at the Lone Star College. Upon receiving his certification, he was promptly promoted to machinist–lead man and is intent on pursuing a collegiate degree in engineering.
“It’s never too late to pursue higher education,” Gonzalez said. “People may think it’s impossible to get new skills when you reach a certain age or once you have a full-time job. But there is no right age to start. If you have the ambition, the possibilities are endless.”
Gonzalez’s enrollment and experience has inspired his company to form a collaborative partnership with Lone Star College. Texas Advanced Manufacturing Solutions now expects about 50 of its 125 employees to receive additional middle-skills training within the next year.
“This is a great moment in Houston for companies and for our employees,” said Fernando E. Sanchez, corporate director for Texas Advanced Manufacturing Solutions, which manufactures parts for the petrochemical industry. “Employees who get additional training can improve their lives and the lives of their families.
“Omar’s decision to go beyond and invest his time, energy, and talent has triggered not only his promotion, but also led to this collaboration with Lone Star College,” Sanchez added. “Now our employees are coming to us saying, ‘I want to improve my skills, my jobs, and improve myself.’”
The petrochemical and industrial/commercial construction sectors have four high-demand occupations in common, which is likely to increase the need for middle-skill workers in these careers: maintenance and repair workers; general and operation managers; heavy-truck and tractor-trailer-truck drivers, and first-line supervisors of mechanics, installers, and repairers.
For several occupations in each sector (e.g., maintenance and repair workers, and heavy-truck drivers), job-posting activity and projected annual openings suggest an acute, immediate need for more skilled workers.
Entry-level middle-skill petrochemical production jobs pay a median hourly wage of $10.74. By earning an associate’s degree, workers have an opportunity to advance to a middle-income median hourly wage of $31.98. These positions typically require a two-year degree.
Overall, the report reflects and builds on growing calls for a sector-based approach to meet employer needs for skilled workers and Houstonians’ need for jobs in high-demand occupations. While transforming existing workforce development approaches is a complex undertaking, the report provides strategic recommendations to support existing training and community-based workforce efforts.