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Strengthening Tennessee's workforce in tough economic times: how has Tennessee been able to maintain a positive business climate in spite of the decline in the economy?

The Division of Workforce Development within the Tennessee Department of Labor and Workforce Development is focused on retraining individuals who have lost jobs so that they may be poised for quick re-entry into the workforce upon full economic recovery. The Division recently received high honors from the United States Department of Labor and was ranked fourth in the nation in attainment of established performance measures such as job entry, job retention, and average wages for those exiting the program. For this effort, Tennessee will receive a $1 million incentive award to advance the governor's vision for workforce development throughout the state.

Through state and local partnerships, Tennessee Career Centers provide training for individuals and businesses that improve the quality of the workforce and ultimately create new jobs. Due to the state of the current economy, this description has expanded, and programs are now charged with supporting economic recovery. This is accomplished by providing those losing jobs with the skills they need to get the jobs of the future.

An annual report on usage of the Tennessee Career Centers dearly articulates the downturn in the economy. In 2007, the total number of job-seeker visits to all of the Career Centers in the state just exceeded 400,000. In 2009, this total number jumped to a staggering 1,018,319. In turn, in 2007, more than 7,500 Tennessee employers placed job orders to fill vacancies in their companies, while in 2009, this number dropped to fewer than 4,500 employers. In spite of these realities, hundreds of thousands of Tennesseans are receiving much needed services that will continue to put the state on the road to economic recovery.

Since March 2009, Tennessee's unemployment rate has fluctuated between 10 and 11 percent, reflecting almost double digits from prior years and challenging the state's approach to delivering workforce training services. According to recent employment forecasts, it appears that these new statistics may be the norm for several years to come. In this economy, how do the state's workforce training programs respond in a way that continues to create a positive business climate?

The Tennessee Department of Labor and Workforce Development operates programs throughout the 13 Local Workforce Investment Areas (LWIA) that provide summer job training programs for disadvantaged youth, target unemployed individuals in extremely high unemployment counties, and upgrade the skills of the transitioning workforce in a way that prepares them for the jobs of the future.

Summer Jobs for Disadvantaged Youth

As part of the American Recovery and Reinvestment Act of 2009, Tennessee was provided additional funding to increase the numbers of dislocated workers entering training and to provide summer jobs to disadvantaged youth. From June to August 2009, more than 13,000 economically-disadvantaged youth had the opportunity to earn and learn as part of the Summer Youth Employment Program. The double-digit unemployment figures for the total population pale in comparison to the unemployment figures for youth aged 14 to 24, a group that is facing more than 40 percent unemployment in this difficult economy.

For the first time since 1999, summer jobs were made available, and for the first time ever, jobs were allowed in the private sector. Participating employers included the Memphis Commercial Appeal, First Bank of Tennessee, and Hospital Corporation of America. "The Commercial Appeal Summer Youth Employment Program gives students exposure to a professional work environment, positive role models, and the daily operations of a historic pillar of the Memphis corporate community that would be otherwise unattainable for many of these students," said Eunice Johnson, Human Resources Director, Memphis Commercial Appeal.

Economic Recovery in Extremely High Unemployment Counties

In addition to the tremendous needs of Tennessee youth, it became apparent that many Tennessee counties would experience unemployment figures in excess of 20 percent. When we reflect on what is now being referred to as the "Great Recession," one Tennessee county actually entered into a "Great Depression." In Perry County (Linden, Tennessee), the unemployment rate hit a staggering 27 percent last summer. The state became aware that a new approach to delivering services had to be implemented in order to prop up the economy and avoid further economic disaster for this community. In partnership with the Tennessee Department of Human Services, the Workforce Development Division created a program to provide government-subsidized employment in the private sector to more than 500 unemployed adults and youth. Through September 2010, an Emergency Grant intended to prevent unemployed individuals from falling further below the poverty level was in place to ensure that these Tennessee citizens would have a paycheck and that many local businesses would continue to operate. Since the program started last year, it has been expanded to include four other Tennessee counties--Lauderdale, Hancock, Smith, and Marshall--serving more than 1,000 unemployed individuals.


Retraining Dislocated Workers

In those counties with unemployment rates of 10 to 15 percent, Career Center staff explain training services as individuals apply for Unemployment Insurance (UI). These workers are usually transitioning from one job to another and if they have transferable skills, the Center staff immediately attempts to assist with re-employment. Many individuals need some type of retraining, and they are encouraged to pursue careers in industries with worker shortages, such as information technology, health care, clean energy, and the skilled trades. The one thing these industries have in common is that they all have highly skilled jobs.

Workforce Development programs have increased training opportunities by 30 percent with Recovery Act funds so that workers are ready when the economy makes a full recovery. As we have moved from the industrial age to the information age, the skills required to obtain a job have drastically shifted. Over the past 50 years, the number of jobs requiring some type of degree has remained constant at 20 percent. The major change has been in the number of "unskilled" jobs. In the 1950s, these jobs represented more than 60 percent of the total, but now they represent less than 12 percent. The number of jobs requiring some type of skilled training beyond high school has grown from less than 20 percent to more than 60 percent.

Bringing New Jobs to the State

Even in this economy, the governor and economic development officials have made great strides in recruiting new jobs to the state. Several examples include the newly-announced $1 billion investment by Hemlock Semiconductor in Clarksville, Wacker Chemie in Cleveland, and the new Volkswagen plant in Chattanooga, bringing in over 4,000 new jobs. With the advent of these companies and others, transitioning workers must be provided with the technical training needed for these jobs of the future.

Governor Bredesen formed the Tennessee Jobs Cabinet under Executive Order Six soon after taking office in 2003. Now, seven years later, the state is realizing the tremendous outcome of this initiative, having for the fifth year in a row just been ranked in the top five states in the nation as best business location according to Site Selection magazine, one of the nation's premier economic development publications. The editor, Mark Arend, says of Governor Bredesen: "His understanding of the business world and government's role therein is readily apparent." (To view the complete rankings, visit www.siteselection. com.)

While jobs in the manufacturing sector have shown a decline in Tennessee over the past decade, the state has continued to focus on preventing layoffs when possible and attracting businesses to the state that will allow for the transition of the workforce. How has Tennessee been able to maintain such a positive business climate as evidenced by the recent rankings?

One of the founding principles of the Jobs Cabinet was to bring together all of the key leaders throughout state government to create a desirable economic development climate and cut through the red tape that often becomes a barrier to recruitment and retention.

One of the departments that has been instrumental in assisting the Department of Economic Development, the lead agency in the Jobs Cabinet, is the Tennessee Department of Labor and Workforce Development. Through the development of the Fast Track initiative, companies are able to inquire about relocation and receive a multi-departmental proposal within a few days. This initiative gives Tennessee an edge when competing with other states.

The following describes some of the innovative programs offered by the state that give Tennessee a competitive edge in recruiting new businesses, retaining existing industry, and encouraging growth within local economies:

On-the-Job Training

As mentioned previously, the Department of Labor and Workforce Development has partnered with Economic and Community Development on more than 150 proposals through the governor's Fast Track initiative. These proposals have resulted in more than $12 million in on-the-job training commitments for the recruitment of new industry or the expansion of existing Tennessee businesses. The program combines 12 state departments and entities as well as TVA, the Department of Revenue, and local government to provide responses to interested employers within 72 hours of contact by the employer.

"This program provides reimbursement to employers who provide on-the-job training to newly hired employees who do not have all of the skills necessary to perform their new jobs," said Sterling Van Der Spuy, Director of Employer Services for the department. "After a training plan is developed and completed and the individual is moved from subsidized to unsubsidized employment, the employer may receive reimbursement of up to 50 percent of the wages paid during the training period." Employers should note that it is prohibited to provide on-the-job training in situations where workers are being displaced in another region or part of the country.

Incumbent Worker Training Program

This program was designed to assist existing businesses with the training costs necessary to remain competitive. "In the seven years since its inception, the Department of Labor and Workforce Development has provided grant funding of more than $13 million that has provided training to more than 46,000 existing employees," said Van Der Spuy. The program's goal is to strengthen businesses through employee skill upgrades and help prevent companies from having to relocate to other states or close completely. The program has resulted in the prevention of more than 220 company relocations while saving more than 14,000 existing jobs within the state.

The program is administered through the state's 13 Local Workforce Investment Areas (LWIAs), and the current program year is from July 1 through June 30 of the following year. For additional information, interested employers should contact their LWIA or visit the department's website at

Investment in Rural Economic Development

One of the state's priorities for the next several years is to expand economic opportunities to the rural areas that have seen a decline in manufacturing jobs. According to Economic and Community Development, the state has seen the creation of more than 103,000 jobs since 2003. With the attraction of the Nissan North American Headquarters to Cool Springs, including the development of their electric car in Smryna, the economic forecast for Tennessee is strong, but we will need to focus on rural economic development. As evidenced by the map overview of the Incumbent Worker Training grants awarded across the state, the Department of Labor and Workforce Development is playing a substantial role in advancing the attainment of this goal.



James G. Neeley, Commissioner, Tennessee Department of Labor & Workforce Development Governor Phil Bredesen appointed James G. Neeley Commissioner for the Tennessee Department of Labor and Workforce Development when he took office in 2003. Commissioner Neeley has extensive knowledge of state regulations in Workers' Compensation, Unemployment Insurance, Safety and Workforce Development.

Neeley is also a key player in the Governor's Jobs Cabinet. He traveled across the state with Governor Bredesen for a series of roundtable meetings with local business, government and workers to develop ways to bring new business to Tennessee.

In 2004, Neeley won the prestigious Eagle Award from the National Association of State Workforce Agencies. The Award honors individuals who soar to new heights in their efforts to serve employers and workers in the United States.

In 2005, Neeley was honored with another prestigious award nominated by the Tennessee Department of Education. He received the Distinguished Service Individual Award flora the National Association of State Directors of Career Technical Education Consortium. Neeley received the award for his decades of service to improve opportunities for all Tennesseans including his service on the executive committee for Education Edge.

In 2006, Neeley was named Carroll Countian of the Year by the Carroll County Chamber of Commerce, and in 2007, he was honored as the Fred Harris Professional of the Year by the Tennessee Industrial Development Council. Throughout his career, Neeley has served on various state, federal, local and regional boards and commissions.

Susan Cowden, Administrator, Division of Workforce Development

Susan Cowden serves as Administrator for the Division of Workforce Development, having previously served as Director of Employment and Training for the department. She has 20 years of leadership experience, operating workforce development and welfare reform programs that serve job seekers and employers. She was Director of Family Assistance for the Tennessee Department of Human Services with responsibility for Medicaid, TennCare, Food Stamps, Families First, and Electronic Benefit Transfer. She has local experience, having served as Program Director for the Nashville Career Advancement Center in Nashville and Regional Manager for local workforce area four in East Tennessee.

Susan attended Vanderbilt University and holds a bachelor's degree from the University of Tennessee, Knoxville. She is a graduate of the Tennessee Government Executive Institute, Class of 2002, was elected to the Steering Committee, and served as Vice Chair in 2003.
Chart 1. Incumbent Worker Training, Trainees by Year,

2003    1,769
2004    3,101
2005   10,031
2006    9,765
2007    7,523
2008    8,643
2009    5,315

Source: Tennessee Department of Labor and Workforce Development.

Note: Table made from bar graph.

Chart 2. Incumbent Worker Training, Funds Awarded by Year,

2003     $419,960
2004     $994,761
2005   $1,977,414
2006   $2,756,699
2007   $2,264,568
2008   $2,898,779
2009   $1,729,416

Source: Tennessee Department of Labor and Workforce Development.

Note: Table made from bar graph.

Map 2. Tennessee Local Workforce Investment
Areas, 2003-2009

       Incumbent          Incumbent
       Worker              Worker
       Grants              Grants
LWIA   Awarded     LWIA    Awarded

 1         45       5        41
 2         38       6        27
 3         24       7        30
 4        100

       Incumbent          Incumbent
        Worker             Worker
        Grants             Grants
LWIA    Awarded    LWIA    Awarded

   8      77        11       10
   9      38        12       29
  10      67        13       26
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Author:Neeley, James G.; Cowden, Susan K.
Publication:Business Perspectives
Geographic Code:1U6TN
Date:Sep 22, 2010
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