TOM STEWART: Talent, talent, talent. It's the number one, the number two, and the number three challenge for middle market companies. We'll learn about how one Chamber of Commerce is making a difference for those companies and their search for skills on the next episode of The Market That Moves America.


INTERVIEWER: Welcome to The Market That Moves America, a podcast from the National Center for the Middle Market, which will educate you about the challenges facing midsize companies and help you take advantage of new opportunities.

TOM STEWART: Unemployment is near record lows. Companies, particularly middle market companies, are struggling to find the talent they need with the skills they need. In today's podcast, we'll hear how one metropolitan area is addressing the problem. I'm Tom Stewart. I'm the executive director of the National Center for the Middle Market at the Ohio State University Fisher College of Business.

We're the nation's leading research group studying the midsize companies that account for a third of private sector employment, and GDP, and the lion's share of economic growth. We call it the market that moves America.

The National Center for the Middle Market is a partnership between Ohio State, Chubb, Grant Thornton LLP, and Cisco Systems. I have two special guests with me today, Wendy Gramza, who is the CEO of the Chamber of Commerce of Toledo, Ohio, and Brian Dicken, who is in charge of policy for the Chamber. Wendy, Brian, welcome to The Market That Moves America.

WENDY GRAMZA: Thanks, Tom. It's great to be with you.

BRIAN DICKEN: Thanks, Tom.

TOM STEWART: Toledo is, as you all know, in the upper left-hand corner of Ohio, and Toledo is the center of a metropolitan area of about 650,000 people. It's long been a manufacturing town, and it still is. Wendy, tell us a little bit about-- your members-- about the businesses in Toledo and the business of Toledo.

WENDY GRAMZA: Sure, great. I'd be happy to. You mentioned manufacturing, and that is a part of our rich history, and also a part of current day, and a part of our future, and that's something that we've really embraced. The tagline to our economic development strategy is that it matters where you make it, because we do still make things here. It also has a dual meaning of this is a great place to make a life for yourself and a career.

Situated, obviously, in the great state of Ohio, just south of Detroit, Michigan, you can imagine-- and I know people are booing that are listening to this, but I'm a Buckeye, so not to worry-- that really has us with a lot of tier two auto suppliers, because of the big auto industry in Detroit. So we do have specifically manufacturing, but then specifically a large concentration around auto industry.

Also, because of where we're situated geographically in the country and in the Midwest specifically, we also have a lot of logistic companies. So that's the make up of our community. And what we find, really, is while our economy doesn't rise quickly at the head of the curve with the country, it also doesn't fall as fast or hard either, so we have a little bit of stability, I think, that we enjoy in Toledo that maybe they don't certainly in other parts of the country.

TOM STEWART: So Toledo is a place about making it, but also with the logistics component and right there on the lake. A place about moving it as well. One of the things that--

WENDY GRAMZA: Absolutely.

TOM STEWART: When we think about midsize companies, one of the things that's fascinating is that manufacturing is the core of the middle market. I think the US economy as a whole is about 12% or 13% manufacturing, but the middle market is 17% or 18% manufacturing.

When you think specifically about an industry like the automotive industry writ large, people think about GM, Ford, and Chrysler, but actually, surrounding them, supporting them, and indispensable to them, are all of these mid-sized suppliers of components, and parts, and things like that. Many of them clustered there in and around Toledo.

WENDY GRAMZA: Right, and I think the thing that people forget about as well is a lot of those middle market companies that support the auto industry are very high tech. They're very instigative.

And so you mentioned we make things, we move things. We also design, develop, make, and move. It's that whole process of innovating new technology to solve problems, putting them in the design phase, the testing, all the way through the manufacturing, and then the shipping.

TOM STEWART: That sort of leads to this whole skills question and the workforce development question. Our national figures, when we ask executives of middle market companies about their challenges, the number one challenge, number one with a bullet, is talent. And when you double click on that talent question, you find a whole set of questions. Some about the sheer availability of talent-- I just can't find people-- but a lot of it is also about talent and skills. What do you see in and around Toledo about the supply and demand equation for talent?

WENDY GRAMZA: Not unlike any city in Ohio or in the country, and what we hear from employers all the time, and whether it's a small mom and pop restaurant, the middle market, or large companies, everyone's saying the same thing-- I can't find people. In the manufacturing sector, specifically, we hear-- when it comes to that skill set-- people saying, they just need to show up every day and pass the drug test. We'll teach them what they need to know.

That's the anecdotal, so what we wanted to do was really dig into what are the jobs that are open, what are the skill sets associated with those jobs, what will those jobs look like five years from now, 10 years from now, 20 years from now. We're right in the middle of a really great process. We partnered with Avalanche Consulting and CAEL, and they are helping us really do a deep-dive talent pipeline analysis.

TOM STEWART: What are you learning?

WENDY GRAMZA: What we're learning for that is that there are-- and what we think we know, and what maybe was true four years, five years ago-- welders is a good example. We've been hearing for four or five years, we need welders, we need welders, we can't find welders. Guess what? We look at our educational system, and we have some great universities and colleges here in this part of Ohio as well, and what we're finding is we're graduating some welders, but they're not finding opportunities.

It's very complicated, and it's organic, and you really have to dig in, and dig deeper, and find out why is that. In that particular case, we have some evidence, but we're, again, digging even deeper that they don't have the experience that the companies are looking for.

Then we go back to those training institutions and say, OK, what does that mean exactly, and how can we provide some on-the-job training or experience while they're studying their craft at your organization so that they are job ready. That's just one small component, so this is a very big undertaking, but I'm not sure that there's anything that we could be working on at the community that's more important than that.

TOM STEWART: That first thing you mentioned was somebody who will show up and pass a drug test, which goes in that cluster of things that sometimes people call soft skills-- understanding what work is, showing up at work, having the work ethic, being able to work as a team. There's that one set of soft skills.

Then you mentioned welding, which is a classic industrial skill. We see data-- Brookings, for example, who's developed a lot of data-- that talk about the creation of jobs with high tech skills, which you also mentioned, and that the new jobs, and particularly the new good jobs, often require digital or other high tech skills, so you get this palette of soft skills, classic vocational skills, let's call them, and high tech skills. How does that picture look for you, and how do you find out where the gaps are and how to close them?

WENDY GRAMZA: That's exactly why we're doing the analysis, because we don't want to go on anecdotal. We don't want to put all our limited resources into setting up a program or some sort of training if there's a greater need in some other area. So we're going to find that out. We're going to prioritize. And then we're going to put our resources toward that low hanging fruit.

If it is soft skills, I think that's something, though, that we need to go into the junior highs and the grade schools, and probably even earlier. You can't just all of the sudden teach somebody a work ethic. You can't just all of the sudden say, well, get off drugs, because now you-- we have to make sure those things don't happen in the first place.

It really goes back, and we have a lot of things that we're doing in that area, like our TRAIN program, which is designed to meet the growing demand for career exploration. People aren't really being taught-- young people aren't thinking about what do I want to do for a career, and we want to put the right kid on the right path.

So what is it they're passionate about? What is it they're good at? What type of training and education will their family and social situation allow? And let's make sure that we've got people set up to be successful with their definition of success, not ours.

TOM STEWART: You put your finger on something that we found also in our data that's particularly true for midsize companies, which is they don't often have the resources to do training on their own in a substantial way. Obviously, there's on the job training. There is some, but to some extent, one of the things we found is that if they have a vacancy-- if they have a round hole, they want a round peg, and they don't want a square peg that they can sand down to make it round, because they don't really have the resources.

And if you think about it, if you have a company with 250 employees, 300 employees, it's likely to have an HR team of three or four, so it doesn't really have those resources. The need to connect to community resources is great, and yet often those community resources have a hard time knowing the smaller companies that have this need. It's easier for them to say, oh, there's Owens Corning, it's a big company, let's deal with them, and harder to see the aggregate demand from 20 or 30 smaller firms.

WENDY GRAMZA: You're absolutely right, and I think that it's twofold. They need to plug into those resources, and those resources are there. It's just sometimes those resources are misaligned.

You hit it. The real challenge, although I think it's something that's doable, is to make sure that we're connecting. It sounds like a cliche. Connect business and education-- everybody says that, but it is really important that the resources that are available are talking to-- and again, not just the big companies-- but they're talking to the middle market on are we training people on the right things, and almost at some point too, customizing some of that, because if you pull lots of smaller companies together, they start to look like a big company in terms of their training needs, and that's really where we're coming in as the Chamber of Commerce representing 2,300 of these companies.

There are a lot of similarities within different companies about what they need, especially soft skills. Soft skills transcend a lot of different industries, so we need to make sure that we put those types of programs together.

And then that's not even good enough, because companies get busy. They say they need something, but they're busy working on their business, so we need to make sure that those resources are in front of them, known to them, and easy for them to access, and we really see that as our role.

TOM STEWART: We did some work in Philadelphia, and we were talking to somebody who represented a training organization and also an organization that could provide government grants. I think there's some DOE or other federal grants that can support certain kinds of training, and one of the things that she learned was that the people who took the most advantage of these programs tended to be larger companies, perhaps because they had larger teams that could figure out that these programs were there.

I'm intrigued by what you said a minute ago. You said connect companies to trainers, and to schools, and universities, and I was thinking, yes, but which companies and which universities. Who are the stakeholders you've got to bring in here so that-- you've got the universities, you've got the Chamber, you've got the companies. You're really orchestrating an ecosystem, and I guess the question is who needs to be in that ecosystem, and should more chambers of commerce do the job that you're doing of being the keystone, the orchestrator, of the ecosystem?

WENDY GRAMZA: I think a lot of chambers are, and if they're not, they certainly should be, and I know that most of my counterparts in the larger cities here in Ohio are very heavily engaged in these programs. They might look different or be called something different, but I think they're all pretty engaged in this effort.

Chambers are really one of the very few, if not the only, organization that can bring together business, government, and citizens, and that is really what we need to do when it comes to this workforce challenge. The citizens are the individuals. Without them, what we're doing doesn't work.

We can understand the needs, we can set up great programs, but if we don't have individuals willing and able who want to work, who want to gain those skills, who want to do better and be part of the economy, it all falls apart. That's sort of a new area for us is really embracing the fact that we need to bring the individual to the table as well.

I think we're pretty good at bringing business and government together, and that's the third piece that we didn't mention in this analysis that we're doing. The City of Toledo and Lucas County are all in. They're funding it at the same level that we are. They're at the table.

The staff of the workforce development, which have gotten bad reputations over the years, and probably sometimes are in, sometimes are not, they're all in. They want to know what is it that we need to be training people on. We want to see people move into the economy. We want to be successful.

And it's really turning workforce around and saying we're not going to look at it from a supply side-- oh my gosh, we have all these people that need work-- we need to look at it from the demand side. What is the pipeline that is needed, and how do we make sure that we fill that pipeline, not just in the short term, but in the long term?

So you're right. All of the parties have to come together, and it's easier now, because there is a sense of urgency, particularly on the part of companies. They know that they can't advance their company, they can't get orders out the door, they can't take on new business, if they don't have trained people. And that takes it from a waitress, to a CFO, and everything in between. It's a great time to bring people together, because there is that sense of urgency.

TOM STEWART: Our numbers show that nearly four out of 10 middle market executives say that a lack of talent is constraining their growth. They literally are saying, I could grow faster if I had more people or more people with the skills that I need-- I guess that's that other piece of that.

So you've been doing-- this TRAIN program is a year old? Couple years old? Talk to me about what you've seen, what's working, what's not, what you wish you'd known. One thing you mentioned is that you wish you'd known more about the importance of bringing the individuals in. And what you wished you'd known at the start that you've learned, and where you think you are on this journey.

BRIAN DICKEN: Thanks, Tom. We started TRAIN about three years or so, and really started off getting with the teachers, the guidance counselors, to talk to them about how there are opportunities that exist that may not require that college degree. What was really eye opening, I think, as we got into it is that they were really in silos, and they didn't always see how things connect.

A great example was we had one of our construction firms, and then they brought in this big glossy brochure, and the visual communications teacher was suddenly enlightened that her students could go into construction. Hadn't really made those connections that within manufacturing or construction you still need the talent and the logistics people, the graphic designers, to help communicate. And so we've really been able to, I think, make some progress with the students, as well as we brought business leaders in and talked about the opportunities.

I think the biggest thing that we've seen is that we still need a lot of people, but the nature of the work is changing. If you go back 30 years or so ago, and robotics were becoming bigger parts of manufacturing, and people thought everybody was going to lose their job to a robot, really what we've seen is we've got more people than ever working, but now we need people who can troubleshoot and maintain those robots, not just install that widget. So we're trying to help change perceptions about what manufacturing looks like today compared to 20 or 30 years ago has been a big part of what we've been able to do.

WENDY GRAMZA: And, Tom, I think the other thing too is that what we have found is a lot of people, they might hear about Dana, or Owens Corning, or [INAUDIBLE], but they have no idea really of what they do, and you don't have people sitting in middle school or junior high thinking, wow, I could work there someday. And that's what we need to change is people really having an understanding of-- and again, not just those large companies, but also the middle market companies, whether I want to be a graphic designer, or a CFO, or whatever, there are companies here in Toledo.

I don't have to leave my state. I don't even have to leave my city to have a great career, and that's the other message that we need to send to people. Figure out your career, and then hopefully we encourage them to start and grow their careers right here in the Toledo region.

TOM STEWART: One of the things I realized-- people talked about the lack of talent and the difficulty they have finding talent. That's not true at Google, right? They're getting 30 resumes every nanosecond there, and it's part because it is such a famous company, and famous companies have an easier time of it than those that may be local champions, not as well known, but as you said, they need serious analytic skills. They need great design skills.

Projecting that employer brand along with the regional brand-- so here are some great places to work, great opportunities, and by the way, in a community that you know and love-- there really is a branding effort that helps attract the talent you need. And as you said, people forget that a construction company needs more than people who can carry I-beams around.

WENDY GRAMZA: Again, we have a two-prong approach when it comes to attracting talent. We want to keep the talent we have, but we also need to attract talent, because not everybody is going to stay.

It's a twofold marketing campaign. First, you have to market the region. They have to think and see themselves living and working in this region or it doesn't matter what your company does. They're not interested.

And then the company then also has to make sure that they tell their story, and their story better include how they're involved in the community, and how they're involved in important social issues, because millennials especially, they want to work for a company that besides building buildings or making cars is also making a difference in the community.

When we talk to middle market companies about why it's important for them to be involved in the community, it's not because these are where your customers are, it's because this is what your employees are going to demand from you. They're going to want to see that you're involved in some way, preferably in the local community where they're going to live and work. So it's been a little bit of retraining and refueling of a lot of the recruiters as well that you better be able to sell the region that you're in, that people are going to be expected to live in, in a positive way or telling your company story isn't going to matter.

TOM STEWART: I think you've just summarized this conversation and also the issue extraordinarily well, which is you're not on your own. And that means in two senses of the word. A company is not on its own. There are resources around that can amplify its brand, that can support it, that it can call on.

Many of them, like the Toledo Chamber, are actively engaged and actively engaged with hard data and not just anecdotes. You're not on your own in that sense, which is there is support out there. Go and find it.

But the other thing is you're not on your own in the sense that you can't do it alone. Not only are those resources available to you, but you need those resources to make the pitch to employees, and I guess the same message would go for a community, for the business development office, and the same message would go for an individual. You're not on your own in both ways. There is support, and you can't do it alone.

WENDY GRAMZA: Right. Our message to our middle market members are when you're out there looking for talent and trying to attract talent, you recruit them to your company, and we will recruit them to the region.

TOM STEWART: With that, I'd like to thank you, Wendy Gramza and Brian Dicken from the Toledo Chamber of Commerce. We invited them on to The Market That Moves America because when I was up in Toledo recently giving a talk that the workforce development program-- they call it TRAIN-- that they've described to you-- struck me as being one of the most comprehensive and sophisticated that I've seen and something worth learning from in other metropolitan areas, but also worth learning about for midsize businesses and the people that support them anywhere.

You can learn a lot more about Toledo's workforce initiative at their website, which is www.toledochamber.com/workforce development. But just go to the toledochamber.com website, and you can learn more about that. Wendy, Brian, thank you very much for coming on the podcast today.

WENDY GRAMZA: Thanks, Tom.

BRIAN DICKEN: Thank you.

TOM STEWART: And thank you all for listening to The Market That Moves America. Never miss a new episode. You can subscribe to the podcast on iTunes, Stitcher, Google Play, or wherever fine podcasts are found, or you can subscribe and learn more about us at our website, and that website is middlemarketcenter.org. Thanks very much.