A job market turned upside down: Pittsburgh’s unemployment went from 3.5% in April 2019 to 16.4% a year later. Here’s how workforce development groups are adjusting to the changes.

The Allegheny Conference on Community Development’s annual meeting last December was a gala event befitting a 75th-anniversary celebration. A record 1,300 people accepted the invitation, requiring moving the meeting to a larger venue, the Westin Convention Center Pittsburgh Hotel’s grand ballroom, to accommodate the doubled-in-size crowd.

During the event, Stefani Pashman, the Conference’s CEO, announced the ambitious goal of creating 75,000 new jobs in the region within the next decade, basically doubling Pittsburgh’s projected growth rate at that time. She further outlined additional objectives on the journey to meeting this goal, including building a more skilled and diverse workforce needed to attract new companies to the region, solving the looming employment gap that could have southwestern Pennsylvania short 80,000 workers by 2025 and promoting greater participation of underserved populations, primarily African Americans.

But then the Covid-19 pandemic hit, driving the economy — and job growth — to a virtual standstill. Suddenly, with unemployment nationwide souring from 50-year lows to 50-year highs practically overnight, the questions shifted from how to fill jobs with a shortage of workers to how to employ workers with a shortage of jobs. Complicating the matter was an unprecedented shift in the way workers work and consumers consume goods, along with uncertainty about how long it will all last.

Workforce development groups and the business community have had to adjust to all these changes as they strive to address both the short-term needs and begin to plan long term for an uncertain future. At the same time, they also are quickly developing new programs to ensure the region’s most vulnerable populations aren’t left behind.

Structural shifts

In the past, Pittsburgh sized up competition from other regions across the country as to how it stacked up for attracting and retaining talent that would fill the needs of existing businesses and appeal to those relocating headquarters or opening new offices and facilities.

Often the region fared in the middle or lower part of the pack. In a November 2018 analysis by the Allegheny Conference that compared the 10-county region to 15 metros and the nation as a whole, Pittsburgh ranked 13th in the Economic Growth index with 1.9% employment growth and 11% GMP (gross metropolitan product) growth.

Now, Covid-19 is a leveler. In April, Pittsburgh had a slightly sharper decline in employment compared to national levels, with a rate of 16.9% (seasonally adjusted) versus 14.7% for the country as a whole, according to Gus Faucher, chief economist at PNC Financial Services Group Inc., but Pennsylvania was among the first states to issue stay-at-home mandates. As of July 9, more than 18 million Americans were collecting unemployment benefits, with weekly new filings topping 1 million for 14 straight weeks. Pennsylvania’s unemployment numbers zoomed early on and peaked at more than 1.2 million on May 2 before dropping to 653,926 on July 4.

“This makes it a very different event for Pittsburgh, especially for the region’s workforce, than the collapse of heavy industry here in the 1980s,” said Christopher Briem, regional economist at the University of Pittsburgh’s Center for Social and Urban Research. “Then, even though there was a severe national recession at the time, job destruction and unemployment was far worse in Pittsburgh than most anywhere else. That created stark choices for workers, especially younger workers, who were forced to leave the region for where there were better opportunities. The result was the severe outmigration of younger workers at the time, a phenomenon that impacts the region to this day. But with this pandemic, virtually all regions are being impacted, and so there is not the same loss of workers expected here.”

But there is a lot of debate about whether there will be any permanent shifts in regional competitiveness resulting from Covid-19.

“It is something a lot of people, especially economists, are watching,” Briem said. “I do not think we will appreciate the structural shifts that are taking place for some time.”

One big shift has been toward remote working. The Center for Social and Urban Research released a report in June on initial labor force impacts of the pandemic in Allegheny County. Some 2,574 completed surveys, a 41.3% response rate, conducted between April 15 and May 8. About 42.5% of those employed at the beginning of March shifted to working remotely due to the pandemic.

But there were vast socioeconomic differences between those were able to work from home and those who couldn’t. Over 73% of local workers with graduate degrees moved to telework, compared to just 25.5% of those with a high school degree. Similar disparities were seen in the ability of old versus young workers to shift to teleworking. And while 43.8% of white workers were working remotely, only 35.3% of Black workers had made a similar shift.

“Clearly the opportunities to shift into teleworking or working at home are not the same for all workers,” Briem said. “Our recent study documented how workers with the highest educational attainment were the most likely to be able to shift into teleworking as a result of Covid-19. The differences were pretty stark when compared between workers with just a high school degree. … Addressing the disparities will be critical in building a resilient workforce as this crisis continues.”

Addressing the immediate needs

Earl Buford, CEO of Partner4Work, which spearheads workforce development efforts for the region, and his team have been quick to take action on multiple fronts, helping connect employers who are looking for staffers with those who lost work and are seeking new positions.

“Obviously, with all the unemployment and the emergency grants coming into this area, we’ve had to rethink our services,” Buford said. “One of the first things I and our board wanted to make sure of was that we were positioned to coordinate, convene and pull together stakeholders.”

As the region went into lockdown, P4W created its Covid recovery response coalition, Ready to Work. Instead of the typical quarterly board meetings, Buford opted for weekly and eventually bi-weekly sessions “to connect all these moving parts,” and discovered that the frequency whet everyone’s appetite.

“I’m blown away at how willing everyone is to get to work,” Buford said. “We monitor all the information out of (Allegheny County Health Department Director) Dr. (Debra) Bogen’s office. We feel like we and the stakeholders are positioned to handle whatever happens.”

P4W formed subgroups to focus on issues ranging from contact tracing to child care concerns at major corporate partners. The organization also moved forward with the six-week Learn & Earn Summer Youth Employment Program with the City of Pittsburgh and Allegheny County — 1,500 kids are participating. Some work in-person at outdoor worksites, but most are working virtually, helped by 350 computers provided by P4W.

That’s not to say that all these efforts are easy.

“It’s not perfect — far from it,” Buford said. “But we feel much more confident in our ability to handle this pandemic, the social injustice issues and how that affects who we are as an employer, a workforce board and a nonprofit. We’re going to take advantage of this opportunity to insert ourselves into these conversations much more.”

Other efforts are underway to help those in underserved communities. BankWorks, a national program to prepare young adults — often with barriers to employment — for jobs at financial institutions, launched in Pittsburgh last September. The newest class, which starts July 28, will be virtual, Buford said.

P4W teamed with the Pennsylvania Bankers Association and several local financial institutions to implement BankWorks to open opportunities for qualified candidates to obtain entry-level positions such as tellers, customer service representatives and personal bankers. Students also receive soft-skills training, coaching and mentoring, information about career pathways, interview prep and other hands-on activities through the free, eight-week program. The upcoming BankWorks class is a smaller cohort than the previous ones, Buford said, “but the job seekers are hungry to work in the industry.”

And in the wake of George Floyd’s death in Minneapolis while in police custody in May, several large companies, including banks in the Pittsburgh region, have stepped up to expand opportunities for those in underserved communities. Since these plans are in the early stages, specific details about how workforce development efforts will unfold haven’t yet been disclosed. But clearly there will be funding and community-based initiatives — and money to provide technology, computers and internet access, which have become more crucial than ever during the pandemic.

PNC has committed $1 billion to help end systemic racism. Internal as well as external, the initiative includes an intensified focus on the recruitment, retention and advancement of African American talent and a comprehensive and sustained effort to create a more inclusive culture at PNC. Also making footprint-wide commitments were Citizens Financial Group, at $10 million and including new programs to further increase leadership and workforce diversity, and F.N.B. Corp., at $250 million, to promote economic investment in underserved communities.

Planning for an uncertain future

Yet even as Buford and others work to address the short-term needs, they are also starting to think further down the road.

“Long-term is really what do we want to look like coming out of all of this, and what’s our strategic plan,” Buford said.

Faucher believes it’s too early to gauge Covid-19’s long-range impact on workforce development.

“The big drivers of differing regional performance have been government restrictions on economic activity and the spread of the virus, and not workforce as much,” he said. “We’ll have a better sense of what types of regional economies have proved to be more resilient later this year and in 2021 as conditions start to normalize.”

One thing that the pandemic may do is position Pittsburgh as a more viable location for backup operations.

“The virus has demonstrated the value to businesses of having multiple locations,” Faucher said. “Given that Pittsburgh is not on the East Coast and has a skilled workforce and good research institutions, some firms might look at the area as a viable second or third location.”

The pandemic also emphasized the importance of having a technology-savvy workforce, which could be a plus for Pittsburgh’s growing technology industry.

“Even people in nontech industries need to be able to use technology to do their jobs, and that’s more important than ever,” Faucher said. “And nontech firms need tech workers to provide the infrastructure to allow those businesses to thrive in the current environment. That’s good for Pittsburgh.”

The new opportunities that are being created by the region’s eds, med and tech-driven economy “are even more important now than ever before,” observed David Motley, president and CEO of MCAPS LLC, an East Liberty-based provider of managed services and staff augmentation. He said the current job market is the “most challenging” he has seen in his lifetime as even companies not experiencing sharp declines in sales are “being very careful with headcount” due to uncertainties in the marketplace.

“And the challenge is even greater for the region to avoid exacerbating the existing educational, socioeconomic and health care disparities that persist in our most vulnerable communities and in the Black community in particular,” Motley added. “That said, the region and its businesses have a distinct opportunity to be intentional with the new jobs and supplier opportunities that are created with respect to diversity and inclusion. Hopefully, we will take advantage of this opportunity.”

Pashman believes the region is still on track to create 75,000 new jobs in the next 10 years.

“The plan was 10 years, so our view is that Pittsburgh is still going to be well-positioned coming out of this to take advantage of opportunities and its share of investment growth,” Pashman said. But, she added, activity could tip toward the latter part of that time frame.

“We don’t know if we’ve hit bottom, if businesses will recover, or if they’ll lay off more people,” she said.

Yet, remarkably, even during these challenging times, there have been positive developments in terms of business investment and growth — and opportunities arising for new innovations and ideas.

“The deals in our pipeline for innovation companies is astounding,” Pashman said. “It’s picking up over the past three or four weeks. And we’ve been working with our partners much more closely, trying to stay on top of their needs.”