workforce-240px-486482041A top concern for Maine businesses is attracting and retaining qualified employees. Each year, numerous positions go unfilled, often because job applicants don’t have the requisite skills or training. Some proactive employers are tackling the issue with the help of federal and state programs. Here’s a closer look at the issues.

Supply vs. Demand

The supply of skilled workers is especially tight in high-tech sectors, such as health care, transportation and energy. According to a recent White House press release, there are currently more than 500,000 open jobs in technology fields, including software development and cybersecurity. Many of these positions didn’t even exist a decade ago, and the average salary for a technology-based job is typically 50% higher than for the average private sector job.

The majority of today’s jobs require some level of computer or technology skills, and many call for postsecondary degrees or certification, so this gap between the skills of today’s workers and the needs of employers is a problem that extends beyond high-tech industries.

President Obama recently called on individuals and private sector businesses to help reform the U.S. labor market. In a recent blog, he said, “The idea here is to fundamentally change our approach to unemployment in this country so that it’s no longer just a time to look for a new job but is also a time to prepare yourself for a better job. That’s what our unemployment system should be — not just a safety net, but a stepping stone to a new future.”

Maine employers can help reduce unemployment and build a workforce that has the skills needed to contribute to a global, technology-driven economy by partnering with government agencies, community leaders, educators and counselors, and not-for-profit groups. To be successful over the short and long run, these efforts will need to focus on three target groups.

Target Group 1: Students

Many employers complain that too few workers entering the workforce from high school or college possess the requisite technology-related skills. The traditional academic mindset focuses on reading, writing and arithmetic, so businesses need to help change this to include technology skills as well.

All 50 states currently offer K-12 educational programs that teach science, technology, engineering and math (STEM) disciplines, and private businesses are encouraged to join in. Your participation could involve donating or loaning computer equipment to your local community college. Or your company might provide virtual mentoring or classes to high school students contemplating careers in your field.

Internships and apprenticeship programs can give workers firsthand experience, and they allow employers to sample a worker’s abilities before making a full-time job offer. Also, networking with counselors at local high schools and community colleges, as well as attending local job fairs, can be valuable ways to connect with talented young people.

Recently the federal government expanded the the Optional Practical Training (OPT) program. Started on May 10, the expanded OPT program allows qualifying international students to stay in the United States for up to 24 months after graduating with a STEM undergraduate or graduate degree to receive on-the-job training from a U.S. business. (Previously, the limit was 17 months.) This new-and-improved program also allows for two lifetime OPT extensions instead of one.

Additionally, based on a prior STEM degree obtained in a qualifying program over the past 10 years, the OPT program has been expanded to include graduates of MBA programs. All other international students, regardless of their field of study, remain eligible for an initial 12-month OPT program.

Target Group 2: Unemployed or Underemployed Individuals

Local unemployment rates in Maine vary significantly, even though the national unemployment rate is currently just 5%. Moreover, unemployment statistics exclude those who’ve accepted a pay cut to stay in the workforce, people who work only part-time without benefits, and people who’ve become frustrated and stopped actively searching for a job. What often prevents unemployed and underemployed people from finding dream jobs is a lack of the education and high-tech job skills that employers want.

Federal and state governments are dedicating significant resources to finding a fix. One example is the federal government’s launch of the TechHire program last year. This multisector initiative calls on universities, community colleges, training centers, employers and community leaders to empower Americans with the skills they need.

These efforts have resulted in “coding boot camps,” and high-quality online courses that rapidly train workers for well-paying jobs, often in just a few months. They’ve also been using innovative hiring practices to expand nontraditional hirings and connecting people to jobs with hiring on-ramp programs. Since the launch of TechHire, the initiative has grown to 50 communities and over 500 employers. Maine currently has nine employers involved in the program. Click here to see other communities that have a TechHire program.

For 2016, the Work Opportunity credit was also expanded to include long-term unemployment recipients under the Protecting Americans from Tax Hikes (PATH) Act of 2015. This credit generally applies to a worker’s first $6,000 of qualified wages paid in the first year. It equals 25% of an employee’s qualified wages, up to the applicable limit, if a new hire works at least 400 hours during the first year. It rises to 40% if the new employee works more than 400 hours. Employers also may qualify for a credit of 50% of qualified second-year wages (in addition to first-year wages) if they hire someone who’s certified as a long-term family assistance recipient. You may be ineligible from claiming this credit, however, if your company receives payment from a federally funded on-the-job training program.

Also note that, for certain veterans, the credits are higher than the general amounts listed above. For instance, you may be eligible for credits of $9,600 per employee.

Target Group 3: Existing Workers

Training and mentoring opportunities help employees and employers alike. How much does your company invest in training for its existing workforce? In a recent Pew Research study, it’s reported that two-thirds of employed adults pursued job-related learning over the last 12 months, and almost three-quarters of U.S. adults consider themselves to be “lifelong learners.” Maine employees who aren’t learning new skills eventually become less employable, less satisfied with their jobs, and less responsive to their employer’s changing needs. So,

Many companies may offer classes onsite or online to keep workers’ skills up to date, or they pay for workers to stay current with their continuing education requirements. For federal tax purposes, companies can generally deduct the cost of courses or seminars that employees attend to maintain professional or job-related skills. And the write-off isn’t limited to tuition. It also covers items such as books, supplies and certain travel costs. (There are some limits for company owners on deducting the cost of education that is not related to the job, however.)

Some employers also provide tuition reimbursement programs for work-related education expenses. Typically, these reimbursements are a tax-free fringe benefit to employees (no income or employment taxes), and the employer can deduct the costs as business expenses.

Alternatively, employees may be able to receive up to $5,250 in annual tax‑free education benefits, if a company maintains an educational assistance plan. For this purpose, the courses don’t have to improve or maintain job‑related skills. They can lead to a new job, help the worker meet minimum requirements or just be educational in nature.

In addition, some states, including Maine and Washington, have introduced Lifelong Learning Accounts (LiLAs) to encourage employees and employers to invest in ongoing skills training. These savings accounts are funded through matching employer-employee contributions and cover the education costs of the participating employee.

LiLAs cover the costs of any type of postsecondary education chosen by the participating employee, unlike tuition reimbursement programs, which are usually dedicated to improving current job-related skills. LiLAs have been proposed in many other states and by the federal government, possibly as a way to expand the Section 529 college savings concept. These programs also usually include career advisory services.

Looking Toward the Future

Thousands of positions go unfilled every year because employers can’t find candidates qualified to fill them, as we shift from an industrial and manufacturing-based economy to a technology-driven economy. The problem will only get worse as highly skilled, experienced Baby Boomers continue to retire en masse. Businesses can find innovative solutions and help bridge the gap to build technology-based skills for workers, today and tomorrow.