2015 Virginia Workforce Development Survey. Prepared by VCU

Transcription

1 2015 Virginia Workforce Development Survey Prepared by VCU June 20, 2016

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3 Virginia Job Vacancy Survey Prepared for Virginia Employment Commission Report prepared by John Accordino, Ph.D., FAICP Fabrizio Fasulo, Ph.D. Ivan Suen, Ph.D Sarin Adhikari, Ph.D. Center for Urban and Regional Analysis at VCU Survey administered by Mary Moore, Ph.D. Jennifer Reid, Ph.D. Survey and Evaluation Research Lab at VCU two divisions of the L. Douglas Wilder School of Government and Public Affairs Virginia Commonwealth University June 20, W. Franklin Street PO Box Richmond, Virginia (804)

4 ACKNOWLEDGMENTS We are grateful to the Office of the Governor of Virginia and to the Virginia Employment Commission for the opportunity to conduct and analyze the results of this survey. And we thank the employers who completed it. ii

5 TABLE OF CONTENTS EXECUTIVE SUMMARY... vi INTRODUCTION... 1 CHAPTER 1. RESEARCH METHODOLOGY... 3 Categories for the Analysis... 3 The QCEW File... 7 Cleaning the QCEW Data File... 8 Sampling Design... 8 Survey Implementation... 9 Survey Response Rate Representativeness of the Sample Sampling Error at 95% Confidence Level Potential Survey Measurement Errors Estimating Job Method Estimating Job by Type and Duration Estimating Statewide Job by Standard Occupational Classification Code Estimating Job by SOC Code by WIB Region CHAPTER 2. SURVEY RESULTS STATEWIDE SUMMARY Characteristics of Survey Respondents Full- and Part-time Employees Expectations about Changes in Employment Attributes Sought in New Hires Number of and the Job Vacancy Rate Attributes of Job Expected Difficulty in Filling Vacant Positions Formal Education Required to Vacant Positions On-the-Job Training Required Level of Prior Work Experience Required iii

6 Average Wage or Salary Level for Anticipated Job Openings License or Industry-Recognized Credentials Required CHAPTER 3. SURVEY RESULTS AT THE INDUSTRY SECTOR LEVEL Projected and Full- versus Part-Time by Industry Sector Vacancy Rates by Industry Sector and Permanent versus Temporary / Seasonal Formal Education, Experience, On-the-Job Training and Expected Difficulty Filling Projected Average Annual Salaries and Hourly Wages by Industry Summary of Job by Industry Sector CHAPTER 4. SURVEY RESULTS AT THE WORKFORCE INVESTMENT BOARD (WIB) REGION LEVEL Projected and Full- versus Part-Time by WIB Region Vacancy Rates by WIB Region and Permanent versus Temporary / Seasonal Formal Education, Experience, On-the-Job Training and Expected Difficulty Filling Projected Average Annual Salaries and Hourly Wages by WIB Region Summary of Job by WIB Region CHAPTER 5. SURVEY RESULTS BY EMPLOYER SIZE Projected and Full- versus Part-Time by Employer Size Vacancy Rates by Employer Size and Permanent versus Temporary / Seasonal Formal Education, Experience, On-the-Job Training and Expected Difficulty Filling Projected Average Annual Salaries and Hourly Wages by Employer Size Summary of Job by Employer Size CHAPTER 6. SURVEY RESULTS BY STANDARD OCCUPATIONAL CLASSIFICATION CODE Projected and Full-Time, versus Part-Time by Standard Occupational Classification Code iv

7 Formal Education, Experience, On-the-Job Training and Expected Difficulty Filling Projected Average Annual Salaries and Hourly Wages by Occupational Group Summary of Job by Occupational Group Addendum: Required Credentials by Standard Occupational Code CHAPTER 7. ANALYSIS OF STANDARD OCCUPATIONAL CLASSIFICATION CODES BY WIB REGION WIB I. Southwest Virginia Workforce Investment Board WIB II. New River / Mount Rogers Workforce Investment Board WIB III. Western Virginia Workforce Development Board WIB IV. Shenandoah Valley Workforce Investment Board WIB VI. Piedmont Workforce Network WIB VII. Virginia s Region 2000 Partnership WIB VIII. South Central Workforce Investment Board WIB IX. Resource: Capital Region Workforce Partnership WIB XI. Northern Virginia Workforce Investment System WIB XII. Alexandria/Arlington Workforce Investment Board WIB XIII. Bay Consortium Workforce Investment Board WIB XIV. Peninsula Council for Workforce Development WIB XV. Crater Regional Workforce Investment Group WIB XVI. Opportunity Inc. Hampton Roads Workforce Development Board WIB XVII. West Piedmont Workforce Investment Board Analysis of WIB Regions by Standard Occupational Classification Codes CHAPTER 8. ANALYSIS OF CERTIFICATION REQUIREMENTS OF MIDDLE-SKILLS JOB VACANCIES BY DETAILED (6-DIGIT) OCCUPATIONAL CODE, STATEWIDE AND BY WIB REGION CONCLUSION v

8 EXECUTIVE SUMMARY The Virginia Employment Commission (VEC) engaged Virginia Commonwealth University s (VCU) Center for Urban and Regional Analysis (CURA) to conduct and analyze the results of a Job Vacancy Survey for the Commonwealth of Virginia. VEC designed the survey in collaboration with the Office of the Governor of Virginia and a stakeholder group and passed it to CURA on August 31, CURA engaged VCU s Survey and Evaluation Research Laboratory (SERL), who conducted the survey from late-september until mid-december CURA analyzed the results and wrote this report in December 2015 and January CURA drew a survey sample of 30,000 establishments from VEC s Quarterly Census of Employment and Wages (QCEW) for fourth quarter QCEW classifies each establishment by North American Industry Classification System (NAICS) code, establishment size (employment), and location in one of the state s 15 Workforce Investment Board (WIB) regions. Each survey respondent was asked to state: Current and projected number of employees over the coming 12 months full-time, part-time and seasonal. Number of projected job vacancies due to replacement and new positions and expected difficulty filling those positions. Most important hard and soft skills needed for each type of job vacancy, including apprenticeships or other experience, and formal degrees and certifications, licenses or other credentials. Projected wage and salary levels for each job vacancy. We received 7,890 valid survey responses, a response rate of 26.3%. The response is statistically highly reliable. At the 95% confidence level, the sampling error is less than one percent. Moreover, the distribution of respondents by industry, employment size and WIB region is highly representative of (similar to) the actual establishment population. Key Findings Statewide Employers project a 4.2% overall job vacancy rate in 2016, 61% due to separations and 39% due to new positions. Extrapolated to the entire QCEW establishment population from which the survey sample was drawn, the number of projected job vacancies in 2016 is estimated to be 130,827. vi

9 Over 60% of the positions, an estimated 78,785 jobs, will be full-time, while 32% (41,803 jobs) will be part-time (8% are unknown). Eighty-three percent (108,405) of the positions will be permanent and 16% (21,209) will be seasonal. Employers expect it to be extremely difficult or very difficult to fill over 21% of the vacancies and moderately difficult to fill an additional 39% of the vacancies. This perception permeates all industry sectors, employer sizes and regions, for the most part. However, employers were not asked to state why they have these expectations. Thinking that perhaps perceived difficulty in filling vacancies would be correlated with formal education or training requirements, we cross-tabulated these variables. However, we found no strong correlation between perceived difficulty in filling positions and formal education, training or skills required. (Please see Appendix E.) Asked to rate the attributes they seek in new hires, employers ranked them in the following order: Professionalism, Communication Skills, Basic Academic Skills, Interpersonal Skills, Critical Thinking Skills, and Technology Use. Extensive formal education does not appear to be required for the majority of job openings. Almost two-thirds of all openings (63%) require a high school diploma or GED, whereas about 12% require an associate degree or some college with no degree, and 18% require a bachelor s degree or higher. About one-third of the projected vacancies requires licensing or other industry-recognized credential. About half (46%) of all projected openings require on-the-job training of one month or less and about 31% require training of 12 months or less. Over 42% of the projected openings require no prior experience and almost 53% require less than five years experience. For full-time positions, employers project, on average, an annual starting salary of $39,385. For part-time positions, employers expect to pay an average hourly starting wage of $ Key Findings Industry Sectors Five industry sectors account for more than 70% of the projected job vacancies in 2016: Accommodation and Food Services 24,728 estimated total vacancies (19% of all vacancies in Virginia), including 16,948 part-time vacancies (41% of all part-time vacancies in Virginia). Health Care and Social Assistance 22,225 estimated total vacancies (17% of all vacancies in Virginia). Retail Trade 20,463 estimated total vacancies (16% of all vacancies in Virginia), including 11,045 part-time vacancies (26% of all part-time vacancies in Virginia). vii

10 Professional, Scientific and Technical Services 13,777 estimated total vacancies (11% of all vacancies in Virginia). Administrative Support, and Waste Management and Remediation Services 11,639 estimated total vacancies (9% of total statewide vacancies). We analyzed projected vacancies in all industry sectors on the following indicators: vacancies, Full-time vacancies, Industry vacancy rates, Percentage of permanent positions, Expected difficulty filling positions, Formal education requirements, License or certification requirements, Average annual salaries or hourly wages. The industry sectors that place most often (but not always) in the top six on these indicators (and the number of times they place there) are: Professional, Scientific and Technical Services (5) viii

11 Administrative Support, and Waste Management and Remediation Services (5) Health Care and Social Assistance (4) Information (4) Accommodation and Food Services (3) Retail Trade (3) Finance and Insurance (3) This does not make these industries more important than the others (eight other industries are tied for eighth place in the list above), but it provides an initial picture of where workforce needs or skills gaps may be greatest. Key Findings Workforce Investment Board Regions Workforce Investment Boards are regional organizations created within each state to oversee local implementation of the federal Workforce Investment Act of 1998 and to undertake studies and other tasks pursuant to developing the region s employment and workforce. WIBs are comprised of appointed representatives from business, government, labor unions, education and related sectors. There are 15 Workforce Investment Board (WIB) regions in the Commonwealth of Virginia; their names and locations are shown below. ix

12 Almost three-fourths of the total number of projected job vacancies in 2016 are accounted for by the five largest WIB regions. This list below provides the number of projected vacancies and percent of the statewide vacancy total for each: XI. Northern Virginia Workforce Investment System 34,113 (26%) XVI. Opportunity Inc. Hampton Roads Workforce Development Board 22,110 (17%) IX. Resource: Capital Region Workforce Partnership 18,291 (14%) XII. Alexandria / Arlington Workforce Investment Board 9,428 (7%) XIV. Peninsula Council for Workforce Development 7,705 (6%) These WIB regions lie within the urban crescent that stretches from Northern Virginia through Richmond to Hampton Roads, where the lion s share of economic and population growth has occurred over the past half century. However, there is a strong second tier outside the crescent where growth in demand for workers is also projected over the coming year: x

13 II. New River / Mount Rogers Workforce Investment Board 6,791 (5%) IV. Shenandoah Valley Workforce Investment Board 6,712 (5%) III. Western Virginia Workforce Development Board 5,934 (5%) XIII. Bay Consortium Workforce Investment Board 5,633 (4%) We analyzed projected vacancies in all WIB regions on the following indicators: vacancies, Full-time vacancies, WIB vacancy rates, Percentage of permanent positions, Expected difficulty filling positions, Formal education requirements, License or certification requirements, Average annual salaries or hourly wages. The WIB regions that place most often in the top five on the characteristics analyzed are (with number of times mentioned): XI. Northern Virginia Workforce Investment System (6) XII. Alexandria / Arlington Workforce Investment Board (6) IX. Resource: Capital Region Workforce Partnership (5) XVI. Opportunity Inc. Hampton Roads Workforce Development Board (4) XVI. Peninsula Council for Workforce Investment Board (3) XIII. Bay Consortium Workforce Investment Board (I-95 area) (3) I. Southwest Virginia Workforce Investment Board (3) xi

14 Key Findings Employer Size It is useful to examine job vacancies and other economic events by employer size, since establishments of different sizes may experience economic forces differently. The table on the right shows standard employer size classes. Eighty-four percent of the vacancies are expected to occur in establishments ranging in size from 10 to 499 employees, with almost half of those occurring in the size class. This same pattern holds for both fulltime and part-time projected vacancies. vacancy rates by employer size class are: Projected employees: 35% employees: 27% employees: 22% 1 9 employees: 14% employees: 2% 1,000 or more employees: 0.4% This finding, coupled with the fact that the top four size classes in this list (i.e. establishments with fewer than 500 employees) also account for the largest number of projected vacancies, allows us to conclude that filling projected job vacancies will be a task, for the most part, for small to medium enterprises (SMEs). Key Findings Standard Occupational Classification Code The U.S. Bureau of Labor Statistics combines occupations into 24 major Standard Occupational Classification (SOC) System codes, as shown in the table below. We translated employers survey responses about the types of occupations they need into these standard codes, to enable analysis of employer needs so that educators can, if necessary, develop or expand curricular offerings. xii

15 SOC Code Occupational Group SOC Code Management Business and Financial Operations Computer and Mathematical Architecture and Engineering Life, Physical, and Social Science Community and Social Services Occupational Group Food Preparation and Serving Related Building and Grounds Cleaning and Maintenance Personal Care and Service Sales and Related Legal Source : Bureau of Labor Statistics Major Standard Occupational Classification (SOC) System Codes Education, Training, and Library Arts, Design, Entertainment, Sports, and Media Healthcare Practitioners and Technical Healthcare Support Protective Service Office and Administrative Support Farming, Fishing, and Forestry Construction and Extraction Installation, Maintenance, and Repair Production Transportation and Material Moving Military Specific Non-Classifiable Eighty percent of all projected job vacancies are in 12 occupations (number and percent of total vacancies given below): Sales and Related 11,788 (9%) Office and Administrative Support 11,671 (9%) Food Preparation and Serving Related 11,235 (9%) Healthcare Support 10,296 (8%) Education, Training, and Library 9,893 (8%) Construction and Extraction 9,122 (7%) Building and Grounds Cleaning and Maintenance 8,904 (7%) Protective Service 8,535 (7%) Transportation and Material Moving 7,194 (5%) xiii

16 Installation, Maintenance and Repair 5,617 (4%) Personal Care and Service 5,433 (4%) Healthcare Practitioners and Technical 4,880 (4%) Production 4,846 (4%) With the exception of Education, Training and Library, the occupations in the list above have somewhat modest skill requirements, pay wages / salaries within or close to the average range of $24,228 to $43,355 per year, are not perceived to be severely difficult to fill. However, when we rank-order occupations on the indicators of total number of vacancies, total full-time vacancies, highest annual salaries, highest hourly wages, highest percentage requiring post-secondary education, highest percentage requiring training licenses and certifications, and which employers expect to be the hardest to fill, the following occupations appear most often as the top nine: Healthcare practitioners and Technical (4,880) 5 times in the top nine list Computer and Mathematical (2,817) 4 Education, Training and Library (9,893) 4 Installation, Maintenance, and Repair (5,617) 4 Architecture and Engineering (1,811) 4 Legal (771) 4 Healthcare Support (10,296) 3 Protective Service (8,535) 3 Transportation and Material Moving (7,194) 3 Management (4,343) 3 Business and Financial Operations (3,354) 3 Life, Physical, and Social Science (1,593) 3 These occupations comprise 47% of total projected vacancies 61,104 jobs statewide. Conclusions and Recommendations The picture of Virginia s labor market afforded by the employer job vacancy survey results is quite positive employers project a 4.2% overall vacancy rate over 2016, due to both replacement of retirees or other separations and new positions. Within this general picture are four aspects, or sub-pictures: xiv

17 1. Expansion in Average-Wage Jobs: The most prevalent picture is that jobs requiring middle skills and paying average wages, many of which will be part-time jobs, are growing throughout the state. But employers perceive that they will have at least moderate difficulty filling these jobs. 2. Importance of Soft Skills: Asked to identify the attributes they seek in new hires, employers ranked soft skills, such as professionalism and communication skills, slightly higher than hard skills, such as basic academic skills and technology use. The implication is that soft skills should be significant part of human capital development initiatives. 3. Expansion in Salaried Professional Jobs and Perceived Skilled Worker Supply Shortages: Another picture is one of strong variation by region in the number of vacancies. This picture reinforces the decades-long pattern of strong growth in the so-called urban crescent, with secondary growth nodes around Charlottesville and Blacksburg. The majority of vacancies is projected to occur in these areas. Moreover, the vast majority of vacancies requiring higher levels of formal skill and paying higher wages, e.g., Computer and Mathematical, Management, Business and Financial, Architecture and Engineering, and Legal occupations are projected to occur in these areas. Employers perceive that they will have at least moderate difficulty filling these vacancies as well. This has implications not only for the curricula that workforce training institutions provide in the regions where labor demand is expanding, but for higher education institutions throughout the state as well. 4. Expansion in Industry-, Occupation- and Region-Specific Pockets and Supply Shortages: Less prevalent than expansion overall or expansion of higher-paid professional positions in the urban crescent, but no less important, are pockets of industry- or occupation-specific expansion, and resultant potential labor shortages, at various places in the Commonwealth. Production occupations in Danville, Roanoke or the Shenandoah Valley, or Healthcare Practitioners near Blacksburg, for example, while not as numerous as other occupations or as in other regions, nonetheless can have very important impacts on the local economy in those regions. It is particularly important that vacancies in occupations which are part of basic activities (those whose products or services are exported out of the region and which thereby support other, non-basic activities), are filled. However, ultimately, all industries and occupations contribute to a vibrant economy. We recommend that each workforce investment board and each industry association review the survey results most pertinent to its area of concern, as they may differ from the general picture summarized here. We also recommend that regional and industry organizations probe for reasons why survey respondents perceive they will have difficulty filling their projected vacant positions. xv

18 INTRODUCTION The Virginia Employment Commission (VEC) engaged Virginia Commonwealth University s (VCU) Center for Urban and Regional Analysis (CURA) to conduct and analyze the results of a Job Vacancy Survey for the Commonwealth of Virginia. VEC designed the survey in collaboration with the Office of the Governor of Virginia and a stakeholder group and passed it to CURA on August 31, CURA engaged VCU s Survey and Evaluation Research Laboratory (SERL), who conducted the survey from late-september until mid-december CURA analyzed the results and wrote this report in December 2015 and January Job vacancy surveys can serve various purposes, depending upon their size, scope and detail. Large, occasional statewide surveys, such as this one, serve multiple purposes and stakeholders. They inform business and government by showing which industries and what sizes of establishments are adding or reducing employment and in what regions they are doing so. They inform jobseekers by indicating which occupations are most in demand, where they are most in demand, and the wage or salary rates they command. And they inform educators by indicating which skills and certifications businesses need and where in the state these skills are most in need. The survey whose results are reported here was sent to establishments listed in the VEC s Quarterly Census of Employment and Wages (QCEW), which classifies each business by North American Industry Classification System (NAICS) code, establishment size (employment), and location in one of the state s 15 Workforce Investment Board (WIB) regions. Each survey respondent was asked to state: Current and projected number of employees over the coming 12 months full-time, part-time and seasonal. Number of projected job vacancies due to replacement and new positions. Most important hard and soft skills needed for each type of job vacancy, and preparation needed, including apprenticeships or other experience, and formal degrees and certifications, licenses or other credentials. Projected wage and salary levels for each job vacancy. By cross-tabulating these job vacancy characteristics with each establishment s industry, region and employment size, this report provides a fine-grained picture of the number of workers and the skills employers in various locations and industries project they will need in Like all projections of the future, these results must be used with caution. Nevertheless, taken together, they show that Virginia businesses predict many job openings in the coming months; some of these jobs will require skills and certifications that Virginia s education and training institutions may need to provide. 1

19 The report is organized as follows: Chapter 1 describes the research methodology in detail. Chapters 2 through 7 describe the survey results. Chapter 2 presents an overview of the results for the entire state. Chapter 3 presents job vacancies by industry (NAICS code), Chapter 4 presents the vacancies by (WIB) region, and Chapter 5 presents the vacancies by employer size classification. Chapter 6 presents the vacancies by Standard Occupational Classification (SOC) for the entire state, and presents the credential requirements for every major occupational group. Chapter 7 breaks these occupation results down to the regional (WIB) level, so the reader can attain a regional perspective on skills gaps that employers may face. Chapter 7 also contains a listing of Virginia community colleges, the major source of education and training for many occupations, and a map depicting the location of community colleges in relation to the WIB regions. It also presents maps showing the WIB regions where the employers of specific occupations with projected vacancies are clustered. Chapter 8 addresses the important issue of expected vacancies in middle skills jobs those requiring moderate levels of formal education and generally paying average wages. 2

20 CHAPTER 1. RESEARCH METHODOLOGY Categories for the Analysis Data for this study were examined by the following four categories: major industry sectors (North American Industry Classification System, or NAICS code), Workforce Investment Board (WIB) region, Standard Occupational Classification (SOC) codes, and employer size (number of employees). These categories are discussed in the sections that follow. Additional details are provided in Appendix A (Major Industries), Appendix B (WIB Regions), and Appendix C (Major Occupational Groups). Industry Sectors Industries are classified using the North American Industry Classification System (NAICS). The NAICS system was developed by the United States, Canada, and Mexico in 1997, replacing the Standard Industrial Classification (SIC) system. The NAICS system provides the basis for classifying all establishments private and public by industry and for collecting data on activity in these industries. Under the NAICS system, each product or service is assigned a unique code in a nested hierarchy system, down to six levels of detail (e.g., Manufacturing, Food Manufacturing, Dairy Products Manufacturing, Ice Cream & Frozen Desserts, etc.). Although some establishments produce goods or services in more than one NAICS code, most databases that list employers or summarize economic activity (such as the VEC s QCEW file used for this study) use the NAICS code into which most of the establishment s products or services fall. In most cases, this is not problematic, because an establishment s various products are likely to be closely related (e.g., Ice Cream and Milk) and therefore in similar NAICS codes at the greatest level of detail. This study uses establishment data at the most general level of detail, the 2-digit level (e.g., Manufacturing), so it can be assumed that all of a given establishment s products or services are contained within that category. For example, it is highly unlikely that the same establishment would produce and sell both manufactured products and education services (which are in two different 2-digit NAICS categories). (See below for further information about the QCEW data file used for this study.) Table 1 lists the twenty major industry groups and their corresponding 2-digit NAICS codes. A description of Major Industry Sectors can be found in Appendix A. 3

21 NAICS Code Table 1. Major Industry Sectors Industry Agriculture, Forestry, Fishing and Hunting Mining, Quarrying, and Oil and Gas Extraction NAICS Code 22 Utilities Construction 56 Industry 53 Real Estate and Rental and Leasing 54 Professional, Scientific, and Technical Services Management of Companies and Enterprises Administrative and Support and Waste Management and Remediation Services Manufacturing 61 Educational Services 42 Wholesale Trade 62 Health Care and Social Assistance Retail Trade 71 Arts, Entertainment, and Recreation Transportation and Warehousing 51 Information Accommodation and Food Services Other Services (except Public Administration) 52 Finance and Insurance 92 Public Administration Source : US Census Bureau Workforce Investment Board Regions Workforce Investment Boards are regional organizations created within each state to oversee local implementation of the federal Workforce Investment Act of 1998, and to undertake studies and other tasks pursuant to developing the region s employment and workforce. WIBs are comprised of appointed representatives from business, government, labor unions, education and related sectors. There are 15 Workforce Investment Board (WIB) regions in the Commonwealth of Virginia; their names and locations are shown below. A detailed list of the localities (counties and independent cities) that comprise each WIB is presented in Appendix B. 4

22 Table 2. Workforce Investment Board (WIB) Regions in Virginia WIB Number I II III IV WIB Name Southwest Virginia Workforce Investment Board New River/Mount Rogers Workforce Investment Board Western Virginia Workforce Development Board Shenandoah Valley Workforce Investment Board WIB Number XI XII XIII XIV VI Piedmont Workforce Network XV VII Virginia s Region 2000 Partnership XVI VIII IX South Central Workforce Investment Board Resource: Capital Region Workforce Partnership Source : Virginia Employment Commission XVII WIB Name Northern Virginia Workforce Investment System Alexandria/Arlington Workforce Investment Board Bay Consortium Workforce Investment Board Peninsula Council for Workforce Development Crater Regional Workforce Investment Group Opportunity Inc. - Hampton Roads Workforce Development Board West Piedmont Workforce Investment Board 5

23 Table 3. Employer Size Categories Category Number Employer Size Category (Number of Employees) Employer Size Categories For this study, we defined six employer size categories based on the number of employees (both full-time and part-time) working at the establishment. These categories are shown in Table to 9 employees 2 10 to 24 employees 3 25 to 99 employees to 499 employees to 999 employees 6 1,000 or more employees Source : Bureau of Labor Statistics Occupational Classification Codes The U.S. Bureau of Labor Statistics combines occupations into 24 major Standard Occupational Classification (SOC) System codes, as displayed in Table 4. We translated employers survey responses about the types of occupations or skills they need into these standard codes, to enable analysis of employer needs, and so that educators can, if necessary, develop or expand curricular offerings. 6

24 SOC Code Occupational Group SOC Code Management Business and Financial Operations Computer and Mathematical Architecture and Engineering Life, Physical, and Social Science Community and Social Services Occupational Group Food Preparation and Serving Related Building and Grounds Cleaning and Maintenance Personal Care and Service Sales and Related Legal Source : Bureau of Labor Statistics Table 4. Major Standard Occupational Classification (SOC) System Codes Education, Training, and Library Arts, Design, Entertainment, Sports, and Media Healthcare Practitioners and Technical Healthcare Support Protective Service Office and Administrative Support Farming, Fishing, and Forestry Construction and Extraction Installation, Maintenance, and Repair Production Transportation and Material Moving Military Specific Non-Classifiable The QCEW File To conduct the Job Vacancy Survey, we drew a sample of Virginia employers from the VEC s QCEW file the Quarterly Census of Employment and Wages. This file contains all establishments that employ workers and which are therefore required to file quarterly reports with the VEC as part of the federal-state unemployment insurance program. In August 2015, VEC provided VCU with the fourth quarter 2014 file from which to draw the survey sample. The QCEW data include the following information: Employer name; Physical address; Mailing address for unemployment insurance filings (UI address); Number of employees at the physical location; 7

25 Employer s industry classification code (NAICS code); Locality code indicating the Virginia city or county where the job site is located (ANSI / FIPS code); Ownership code (i.e., private, local government, state government, or Federal government). Cleaning the QCEW Data File The QCEW fourth quarter file contains 223,186 establishments. Because the QCEW file does not have establishment addresses, it was necessary to solicit participation in the survey via the US Postal Service. (See description of process, below.) To make sure the survey would reach the establishments, we cleaned the data set by removing establishments that met the following criteria: 1. Businesses with missing, incomplete, incorrect, or un-geocodable addresses. There were 51,985 establishments that met this criterion, so the survey population was reduced from 223,186 to 171,201 establishments. 2. We sent the 171,201 establishment addresses through the US Postal Service to check address deliverability 19,240 had undeliverable addresses and were removed. This left 151,961 valid addresses, so these became the sampling frame from which we drew the survey sample. Sampling Design Given the short time period allotted for the survey and for the study overall, and the fact that establishment addresses were not available, we selected a relatively large number of establishments, so as to ensure that we would receive enough responses to achieve a high degree of statistical reliability. We randomly selected 30,000 (about 19.7% of the 151,961 businesses) as the survey sample. We utilized the stratified random sampling technique to draw a proportionate sample from the sampling frame in two steps: 1. We first grouped establishments into homogeneous subgroups, or strata, based on the combinations of 20 major NAICS industry sectors, 16 regions (including 15 WIB Regions and one out-of-state group), and six employer size categories. 2. We then applied the simple random sampling technique to select 19.7% of businesses from each stratum to be included in the survey sample. The survey sample contains 30,000 establishments such that the distribution of the sample businesses in each stratum is proportional to that of the sampling frame (or population). 8

26 Survey Implementation The survey was conducted over a period of two and one-half months, from late-september through mid-december, Appendix D lists each step in detail. In brief, VEC developed the survey in collaboration with the Office of the Governor of Virginia and with a stakeholder group. VEC provided the survey to VCU on August 31, SERL then programmed the survey in VCU s REDCap on-line survey system and created address labels from the sample of 30,000 establishments drawn by CURA from the QCEW file. On September 15, VEC provided VCU with letterhead to be used for a letter requesting that establishments complete the survey, along with VEC envelopes. On September 19, SERL initiated a pilot test of the survey with 100 establishments. Establishments received three formal requests to complete the survey an initial letter, a postcard follow-up and then a final letter. Establishments that did not respond within two weeks after the second letter received a phone call asking them to complete the survey and offering assistance. SERL sent the initial request to complete the survey on September 29 to the sample of 30,000 establishments. This request was in the form of a letter on VEC letterhead, signed by David Tysinger of the VEC and John Accordino of CURA. (See Appendix D.) The letter asked establishments to access their own personalized survey in REDCap by entering a URL given in the letter into the on-line system. Establishments were invited to direct questions about the survey and requests for assistance to David Tysinger and John Accordino. In the first few weeks of the survey, Tysinger and Accordino passed these requests on to SERL, which set up and staffed a help center to respond to all requests for assistance, generally by ing the URL to the person requesting assistance, so that s/he could simply click the link and complete the survey on-line. SERL maintained the help center through December 16., 2015 On October 9, SERL mailed a follow-up postcard to all 30,000 establishments, thanking those who had participated and requesting that the others do so. Each establishment s personalized URL was provided on the postcard and recipients were requested to direct requests for assistance to the SERL help center. (See Appendix D.) On November 5, SERL sent a second letter to each establishment that had not yet responded to the survey. (See Appendix D.) This letter was printed on VEC letterhead and signed by David Tysinger of the VEC and John Accordino of CURA. It was accompanied by a paper survey with a stamped, self-addressed envelope for those establishments that preferred to complete the survey on paper. On November 13, SERL began phoning establishments that had not yet responded to the survey to encourage them to respond to the survey and to assist them in doing so, if necessary. On December 16, SERL provided the survey results to CURA. 9

27 Survey Response Rate Out of the 30,000 establishments, we received 7,890 valid surveys, resulting in a survey response rate of 26.3%. This is within the normal range for a social science survey and, given the short time frame of the survey, it is quite good. As discussed below, it is large enough to ensure a very high degree of overall statistical reliability. Representativeness of the Sample The distribution of the 7,890 survey respondents closely matches the distribution of the sampling frame of 151,961 establishments across industry sectors, WIB regions and employment size classes. In other words, the survey respondents represent the actual population of establishments well, as shown in Tables 5 to 7 below. In each table (one each for NAICS, WIB region and employer size), the two columns on the right compare the percentage of cases in the QCEW population to the percentage of cases in the sample. In all cases, the two percentages match each other very closely. 10

28 Table 5. Representativeness of the Sample by NAICS Code Arranged by NAICS Code Number NAICS Code Industry Agriculture, Forestry, Fishing and Hunting Mining, Quarrying, and Oil and Gas Extraction Number of Cases in the Population 1 Percent of Cases in the Population Number of Cases in the Sample Percent of Cases in the Sample 1,075 1% 79 1% 126 0% 4 0% 22 Utilities 324 0% 15 0% 23 Construction 15,404 10% 1,003 13% Manufacturing 4,214 3% 316 4% 42 Wholesale Trade 6,554 4% 323 4% Retail Trade 19,669 13% % Transportation and Warehousing 4,188 3% 216 3% 51 Information 2,483 2% 93 1% 52 Finance and Insurance 8,907 6% 366 5% 53 Real Estate and Rental and Leasing 7,062 5% 333 4% 54 Professional, Scientific, and Technical Services 24,150 16% 1,362 17% 55 Management of Companies and Enterprises 1,392 1% 70 1% 56 Administrative and Support and Waste Management and Remediation Services 8,941 6% 409 5% 61 Educational Services 2,378 2% 178 2% 62 Health Care and Social Assistance 17,147 11% % 71 Arts, Entertainment, and Recreation 2,110 1% 117 1% 72 Accommodation and Food Services 12,861 8% 476 6% 81 Other Services (except Public Administration) 11,378 7% 712 9% 92 Public Administration 1,598 1% 85 1% OVERALL 151, % 7, % ; QCEW 2014Q4. 1 Based on QCEW establlishments - in the QCEW 2014Q4 - with clean addresses. 11

29 Table 6. Representativeness of the Sample by WIB Region Arranged by WIB Region WIB Number WIB Name Number of Cases in the Population Percent of Cases in the Population Number of Cases in the Sample Percent of Cases in the Sample - Out of State 177 0% 5 0% I II III IV Southwest Virginia Workforce Investment Board New River/Mount Rogers Workforce Investment Board Western Virginia Workforce Development Board Shenandoah Valley Workforce Investment Board 1,900 1% 110 1% 5,845 4% 356 5% 6,886 5% 391 5% 9,525 6% 640 8% VI Piedmont Workforce Network 8,004 5% 497 6% VII Virginia s Region 2000 Partnership 4,548 3% 275 3% VIII IX XI XII XIII XIV XV XVI XVII South Central Workforce Investment Board Resource: Capital Region Workforce Partnership Northern Virginia Workforce Investment System Alexandria/Arlington Workforce Investment Board Bay Consortium Workforce Investment Board Peninsula Council for Workforce Development Crater Regional Workforce Investment Group Opportunity Inc. - Hampton Roads Workforce Development Board West Piedmont Workforce Investment Board 2,668 2% 171 2% 22,078 15% 1,131 14% 39,427 26% 1,809 23% 9,048 6% 385 5% 7,120 5% 352 4% 8,346 5% 411 5% 2,530 2% 123 2% 20,895 14% 1,034 13% 2,964 2% 200 3% OVERALL 151, % 7, % ; QCEW 2014Q4. 1 Based on QCEW establishments - in the QCEW 2014Q4 - with clean addresses. 12

30 Table 7. Representativeness of the Sample by Employer Size Arranged by Employer Size Category Category Number Employer Size Category (Number of Employees) Number of Cases in the Population Percent of Cases in the Population Number of Cases in the Sample Percent of Cases in the Sample 1 1 to 9 Employees 102,656 68% 5,207 66% 2 10 to 24 Employees 27,545 18% 1,590 20% 3 25 to 99 Employees 17,242 11% % to 499 Employees 4,015 3% 177 2% to 999 Employees % % 6 1,000 or More Employees % % OVERALL 151, % 7, % ; QCEW 2014Q4. 1 Based on QCEW establlishments - in the QCEW 2014Q4 - with clean addresses. Sampling Error at 95% Confidence Level One indicator of the quality of a sampling method is the size of the so-called sampling error. No sample is likely to have exactly the same characteristics as the actual population it is meant to estimate. The difference between the characteristics of the sample and the characteristics of the population is called the sampling error. Although the size of the sampling error cannot be ascertained precisely, it can be estimated using statistical probability techniques. We calculated the sampling error based on the percentage of cases with job vacancies from the survey. Given a 95% confidence level, the overall sampling error was determined to be plus or minus 0.9%. (The mathematical formula is given below.) This means that in 95 out of 100 random samples, such as the one we drew for this study, the percentage of establishments with vacancies would be less than 1% different from the percentage we found through our sample survey. In short, we can have a great deal of confidence in these results. = 1.96 (1 ) 1.96: z-score value at 95% confidence level : percent of cases with job vacancies : number of cases in the survey We then applied the same approach to determine the sampling error in each NAICS Code, each WIB Region, and each Employer Size category. Here the sampling errors are somewhat higher, due to the smaller number of cases 13

31 in some of the sub-groups, as shown in the following tables. Nevertheless, with the exception of sub-groups that have small numbers in the overall establishment population Mining, Quarrying, Oil and Gas Extraction, Utilities, and establishments with more than 500 employees the size of the errors is quite modest. For example, the percent of establishments with 25 to 99 employees that reported vacancies on the survey is 40.6%. The sampling error is plus or minus 3.2% for this sub-group, which means that in 95 random samples out of 100 that one could draw from the total population of establishments, the vacancy rate projected by those establishments would be between 37.4% and 43.8%. Tables 8 to 10 show the estimated sampling error by industry sector, workforce investment board, and employer size. 14

32 Table 8. Sampling Error by NAICS Code 95% Confidence level - Arranged by NAICS Code Number NAICS Code Industry Agriculture, Forestry, Fishing and Hunting Mining, Quarrying, and Oil and Gas Extraction Number of Cases in the Sample Number of Cases with Percent of Cases with Sampling Error (+/-) % 6% % 42% 22 Utilities % 22% 23 Construction 1, % 2% Manufacturing % 5% 42 Wholesale Trade % 4% Retail Trade % 3% Transportation and Warehousing % 6% 51 Information % 8% 52 Finance and Insurance % 4% 53 Real Estate and Rental and Leasing % 3% 54 Professional, Scientific, and Technical Services 1, % 2% 55 Management of Companies and Enterprises % 10% 56 Administrative and Support and Waste Management and Remediation Services % 4% 61 Educational Services % 7% 62 Health Care and Social Assistance % 3% 71 Arts, Entertainment, and Recreation % 8% 72 Accommodation and Food Services % 4% 81 Other Services (except Public Administration) % 3% 92 Public Administration % 11% OVERALL 7,890 1,768 22% 1% 15

33 Table 9. Sampling Error by WIB Region 95% Confidence Level - Arranged by WIB Region WIB Number WIB Name Number of Cases in the Sample Number of Cases with Percent of Cases with Sampling Error (+/-) - Out of State % 43% I II III IV Southwest Virginia Workforce Investment Board New River/Mount Rogers Workforce Investment Board Western Virginia Workforce Development Board Shenandoah Valley Workforce Investment Board % 6% % 4% % 4% % 3% VI Piedmont Workforce Network % 4% VII Virginia s Region 2000 Partnership % 5% VIII IX XI XII XIII XIV XV XVI XVII South Central Workforce Investment Board Resource: Capital Region Workforce Partnership Northern Virginia Workforce Investment System Alexandria/Arlington Workforce Investment Board Bay Consortium Workforce Investment Board Peninsula Council for Workforce Development Crater Regional Workforce Investment Group Opportunity Inc. - Hampton Roads Workforce Development Board West Piedmont Workforce Investment Board % 6% 1, % 3% 1, % 2% % 4% % 4% % 4% % 7% 1, % 3% % 6% OVERALL 7,890 1,768 22% 1% 16

34 Table 10. Sampling Error by Employer Size 95% Confidence Level - Arranged by Employer Size Category Category Number Employer Size Category (Number of Employees) Number of Cases in the Sample Number of Cases with Percent of Cases with Sampling Error (+/-) 1 1 to 9 Employees 5, % 1% 2 10 to 24 Employees 1, % 2% 3 25 to 99 Employees % 3% to 499 Employees % 7% to 999 Employees % 25% 6 1,000 or More Employees % 42% OVERALL 7,890 1,768 22% 1% Potential Survey Measurement Errors Although the survey results are statistically very reliable, one should be aware of potential errors that can occur in any survey. As noted above, the survey asked establishments to project job openings over the next 12 months; an undertaking that is inherently subject to error. Moreover, although all establishments were encouraged to complete the survey even if they did not expect vacancies, it is possible that some establishments that did not expect vacancies did not make time to complete the survey; the short time allotted for completion of the survey makes this somewhat more likely. Estimating Job Method The job vacancy rate job openings that survey respondents expect to have over the next 12 months due to new positions and to replacements according to the survey results, is 4.2%. As discussed above, this number should be treated as just an estimate, as it is based on survey respondents projections of the future, not a record of actual vacancies that occurred in the past. Nevertheless, it provides a useful indicator of the general level of hiring and economic activity that is expected. 17

35 To extrapolate this rate to the entire state and to estimate the number of job vacancies for each NAICS code, WIB region and employer size category, we used the same fine-grained approach that we used to determine the survey sample. (The mathematical model is shown below.) Step 1: We first classified survey respondents into groups defined by NAICS Code, WIB Region, and Employer Size. We then aggregated the number of job vacancies and employment of each group to determine its job vacancy rate. Step 2: We applied the same approach and classified the 151,961 businesses (the number with addresses from which we drew the survey sample) into groups defined by NAICS Code, WIB Region, and employer size. We aggregated the employment in each group and multiplied the group employment with the corresponding group job vacancy rate derived from Step 1 above. The result was further divided by (1 ) (see below) to derive the estimated statewide job vacancies of that group. Step 3: We then aggregated all the statewide job vacancies of all groups, which yielded a statewide total of 130,827 job vacancies. The number of job vacancies estimated for the entire state 130,827 is derived from the 151,961 establishments with address information (the total employment of the 151,961 businesses was 2,985,173). If we applied the same 4.2% vacancy rate to all 223,186 businesses in the QCEW database (their total employment was 3,670,747), the estimated number of job vacancies statewide would be 160,873. However, because address information for 71,225 establishments is incomplete or missing entirely, we could not use them to derive vacancy rates by WIB region; moreover, we have no way of knowing if these establishments are still in operation. Thus, this report uses the figure of 151,961 establishments as the basis for all calculations of vacancy rates. However, the reader should bear in mind that the number of vacancies estimated from 151,961 employers 130,827 is likely to be on the conservative side. The actual number may lie somewhere between 130,827 and 160,873. The statewide vacancy rate was estimated using the following model: : job vacancy rate of NAICS Code i, WIB Region j, Employer Size k from the survey : total job vacancies of NAICS Code i, WIB Region j, Employer Size k from the survey : total employment of NAICS Code i, WIB Region j, Employer Size k from the survey 18