New JPMorgan Chase & Co. Report Offers Roadmap for Tackling Skills Gap

Houston Skills Gap Report identifies needs and opportunities in key economic sectors, focusing on petrochemical industry and commercial/industrial construction

HOUSTON, November 12, 2014 – JPMorgan Chase & Co. today released its Houston Skills Gap Report that 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.

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.

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.” 

Skills Gap Key Findings and Recommendations

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 percent 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. Employees who get additional training can improve their lives and the lives of their families,” said Fernando E. Sanchez, corporate director for Texas Advanced Manufacturing Solutions, which manufactures parts for the petrochemical industry.

“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 said. “Now our employees are coming to us saying, ‘I want to improve my skills, my jobs and improve myself.”

Petrochemical and Industrial/Commercial Construction Sectors

The two 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 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 the following strategic recommendations to support existing training and community-based workforce efforts.

About the Skills Gap Report
JPMorgan Chase is releasing a series of skills gap report in nine metropolitan regions in the United States and four European countries. The reports draw from an array of data, including traditional and real-time labor market information and analysis from EMSI and Burning Glass Technologies, Inc. The reports focus on middle-skills occupation as defined by Economic Modeling Specialists International (EMSI) based on aggregated data from over 90 federal, state and private sources and a multi-variable technique that includes three criteria: family-sustaining wages, recent employment growth, and employment size. Burning Glass provided real-time labor market demand information from online job postings by aggregating and analyzing code data from multiple classification and occupation databases. Jobs for the Future integrated EMSI and Burning Glass data with other data sources like the analysis of longitudinal Quarterly Workforce Indicators from the U.S. Census Bureau, to write the report.

About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.5 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

About the UpSkill Houston
UpSkill Houston is the Greater Houston Partnership’s comprehensive, industry-led approach to address key workforce challenges facing the Houston region and lay the foundation for the region’s long-term competitiveness.  The blueprint for action focuses on four primary areas: raising awareness of middle-skills careers, building basic skills needed to enter the workforce, coordinating the efforts of the region’s workforce ecosystem and collecting and sharing regional workforce supply-demand data.  More information may be found at www.houston.org/upskillhouston

Greater Houston Partnership works to make Houston one of the world’s best places to live, work and build a business. It represents 11 counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto, Walker and Waller. With more than 1,400 member organizations, GHP represents approximately one-fifth of the region’s work force. Information about the Partnership is available at www.houston.org.