The New Maine Workforce: Snapshots from Presque Isle and the Waterville Regions

by Charles S. Colgan, Professor of Public Policy and Management, and Chair, Graduate Program in Community Planning and Development, Edmund S. Muskie School of Public Service, University of Southern Maine

Discussions of the Maine economy often center around the workforce. While Maine people are often praised for their good "work ethic," concerns have also been raised about the education and skill levels of the workforce. As the national economy remains strong and Maine continues to see unemployment below the national average, businesses increasingly find their growth constrained by the limited availability of labor.

To address concerns about the cost and quality of the Maine labor force and to assemble a data set which can be used to assist economic developers working with firms looking to locate in Maine, the USM Center for Business and Economic Research has undertaken an ambitious project to document the characteristics of Maine's workforce. The project began this year with studies of the Waterville and Presque Isle-Caribou labor market areas (LMAs), and will continue over the next two years to provide reliable, detailed data on the workforce in seventeen regions of Maine.¹

When complete, the Maine Workforce Assessment Project will consist of a database of all relevant published information, plus the results of random sample telephone surveys of more than 3,500 people employed in Maine and more than 3,000 businesses that will be involved in a mail survey. It will provide detailed information on:

• Employment mobility and recruiting trends
• Unemployment and underemployment
• Employment costs, including both pay and benefits
• Education, training, and skills
• Commuting

This article explores some of the findings from the employee and employer surveys conducted in the Waterville and Presque Isle-Caribou labor market areas. This includes information gathered in nearly four dozen interviews with human resource or other managers at many of the largest firms in the two areas. In this article, findings regarding current employment mobility and recruiting issues are examined. Articles in the next two issues of MBI will explore employment costs as well as the education and skills of the workforce.

Current Employment Conditions

Both Waterville and Presque Isle-Caribou² lie in the heart of the "other Maine," the inland and northern parts of the state which have lagged behind the coastal and southern faster-growth areas. Both regions have suffered severe disruptions over the past five years. Waterville has had major plants close, such as the Kimberly-Clark paper mill in Winslow and the Diamond Match Company in Oakland. The 1994 shutdown of Loring Air Force Base in Limestone, just north of Caribou, removed 8,000 military personnel and 4,000 jobs from the northern Maine economy.

Measurement of the workforce is taking place at a time of improving economic conditions in the two regions. At the time the surveys were undertaken in March 1999, the unemployment rate in both labor market areas was 5.5%. This compared with a statewide unemployment rate at the same time of 4.4%. Both areas thus remain above the statewide unemployment rate, although both have shown significant improvement. Over the period March 1998-March 1999, Waterville's unemployment rate fell from 7.4% to 5.5% and Presque Isle-Caribou's rate fell from 8.2% to 5.5%. Over the same period, Maine's unemployment rate fell from 5.7% to 4.4%. Thus both regions saw employment actually grow faster than in the state during that period.

The critical issue for most businesses is how long it takes to hire someone. Table 1 shows the responses to a question on the employer survey regarding the length of time (in weeks) it took to hire different types of employees in both labor market areas. Lower-paid jobs, such as administrative and clerical positions, required less than half the time to fill (about four weeks on average) than did higher-skilled professional and managerial positions, which were reported to take an average of more than two months to fill. Retail positions were being occupied in an average of a little over three weeks, leaving employers in this industry worried that it was becoming increasingly difficult to staff positions. The representative of one firm expressed concern that the retail sector in Waterville was essentially just hiring employees from one another.

The recent changes in the employment situation in the region were also indicated by the length of time that employees had been on the job. Table 2 shows the time on the job and with the current employer for the primary job. (The primary job is defined as the one from which the respondent earned most income.) Almost half of the employees in each area have held their current job less than two years; the most common response (about a quarter of respondents) was 1-2 years. But the most frequent response for how long an employee had been with their current employer was 6-10 years in Waterville and more than 15 years in Presque Isle-Caribou. This indicates how jobs change in regions such as Waterville and Presque Isle-Caribou, neither of which have seen a large number of new employers locating in the region. As the economy improves, jobs are redefined and expanded, or people move up in company hierarchies. Thus many people have "new" jobs without changing employers. To be sure, many people do have new employers (such as call centers), but the addition of new jobs and new employers in the region is not the only way in which employment grows.

Even as the economy expands, there is much concern about the quality of jobs being created. In both labor market areas, employee respondents were asked about their experience with losing their jobs due either to permanent layoffs or to business closing and their success in getting new jobs. A large proportion of respondents (about 40%) in both regions had experienced a permanent layoff of one type or another. As Figure 1 shows, most were able to secure new employment in less than three months, with most in the Waterville area able to get new employment in less than one month. More significantly, over two-thirds of respondents in both regions reported that, in terms of pay and working conditions, the next job after a permanent layoff was the same as or even better than the job that they had lost.

Recruiting New Employees

Finding workers for many positions remains relatively easy for most companies in the Waterville and Presque Isle regions, but for other positions successful recruiting remains a challenge. Employers were asked about their experience in recruiting new employees who came from at least an hour away. As table 1 suggests, many of these employees will be those who either have specialized skills or who fill managerial or professional positions. Their responses pointed to some of the issues that employers in Maine frequently face along with the seriousness of these problems.

Figure 2 shows the average rating of the seriousness of recruiting problems as evaluated by the employers in the Waterville and Presque Isle regions. In this scale, 1 is a "very serious" problem, while a rating of 5 is "not a problem." Employers in both regions did not indicate that any of the recruiting issues were very serious problems, but offering competitive salaries received the lowest (most serious) rating. Employers in these regions were clearly worried about their ability to pay the higher salaries often expected by people employed in larger or more dynamic labor markets. Presque Isle employers also expressed concern about finding employment for spouses.

Employers were also asked about recruiting strategies. Table 3 indicates the number of companies in each region that use various approaches to recruiting. The table also shows the proportion of those companies which then go on to rate it as either "effective" or "very effective." Local newspapers and walk-ins were frequently used and generally successfully so. Somewhat surprisingly, the use of current employees to provide referrals was very popular, and also very effective, particularly in Waterville. Employers in the Presque Isle-Caribou region perceived employment agencies and the Maine Job Service to be more effective than did employers in the Waterville region, while employers in both areas utilized and evaluated the effectiveness of other recruiting approaches in about the same way in both areas.

Table 3
Approaches to Employee Recruiting
(Percent of Respondents)
	Waterville		Presque Isle-Caribou
	N using	Percentage rating the approach “effective” or “very effective”	N using	Percentage rating the approach “effective” or “very effective”
College/University placement	55	83.0	26	80.1
Electronic media	17	58.9	14	50.0
Employment agency	44	65.4	39	79.5
Employee referrals	174	95.6	149	85.1
Maine Job Service	53	62.1	62	72.5
Job fairs	22	60.0	17	65.3
Job postings	64	89.3	59	79.6
Local newspaper	159	85.6	126	94.3
Radio	5	57.1	14	71.3
Referral bonus	9	73.3	10	90.0
Regional newspaper	55	80.9	57	82.3
Signing bonus	8	66.7	4	100.0
Social service agencies	27	37.9	11	90.1
Walk-ins	141	80.1	134	81.2

Another element of recruiting new employees is the "latent labor force." This constitutes people who were already employed but who might be persuaded to take a new job for one reason or another. The phone survey examined the inclinations of current employees to take new jobs, both from those who were actually currently seeking a new job and from those who were not actively looking but might do so. Table 4 shows the factors involved in deciding to look for a new job as well as those that could persuade someone to look for a new job.

Table 4
Reasons for Seeking New Job
(Percent of Respondents)
Reasons for Currently Seeking New Job
	Waterville	Presque Isle-Caribou
Get additional pay	25.4	25.5
Get better benefits	8.5	5.5
Have more flexibility in work schedule	1.4	7.3
Have more job security	2.8	5.5
Have a better chance for promotion	7.0	5.5
Work closer to home	7.0	5.5
Make better use of my skills and education	32.4	21.8
Other	14.1	23.6
Reasons for Maybe Seeking New Job
	Waterville	Presque Isle-Caribou
Get additional pay	36.3	40.9
Closer match to skills	13.7	13.2
Work for a different organization	2.6	1.6
Get off shift work	14.1	9.3
Work closer to home	25.6	28.4

In both regions, the primary motivator for seeking another job was additional pay. This was closely followed by, and related to, the desire to find a job more closely corresponding to one's skills and education level. This issue was a stronger consideration in the Waterville area, which also has a somewhat more educated workforce, than in Presque Isle-Caribou. In the Presque Isle-Caribou region, respondents expressed a somewhat greater desire to increase flexibility in work schedule (which employer interviews identified as one of the major challenges in managing employees today). A factor in both regions, moreover, was finding a job closer to home.

This desire to better link skills, education, and jobs brings to the fore the kinds of jobs with which people were most dissatisfied. Table 5 examines the responses to a question which asks each employee to rate their current job on how closely it corresponded to their current skills. On a 5-point scale, 1 represents a poor match and 5 a good one. Some similarity can be observed between the two regions (management and clerical positions were rated about the same), but some notable differences emerged as well. Teachers and those employed in health fields saw their jobs as a closer fit to their skills and education in Waterville than such workers did in Presque Isle-Caribou, while restaurant and food service workers perceived a much stronger match in the Presque Isle region than in the Waterville region. Consequently, on the basis of skills and education mismatches, it is difficult to generalize about which kinds of jobs were most likely to offer fertile recruiting grounds.

Table 5
Mean Rating of Qualifications Match of Current Job
1 = poor match; 5 = good match
	Waterville	Presque Isle-Caribou
Managers/Administrators	4.00	4.12
Finance/Purchasing	3.56	4.00
Teachers	4.38	3.62
Health professions	4.10	3.62
Sales	3.82	3.50
Secretary/Clerical	3.79	3.50
Restaurant/Food service	2.70	4.03
Health assistants	4.42	3.92
Machinery/Vehicle maintenance	3.91	4.00
Skilled manufacturing	3.56	3.61
Other supervisors	4.00	3.04
Transport/Delivery	3.58	3.27

Conclusion

As in all of Maine, firms in Waterville and Presque Isle-Caribou face a growing economy, but not a growing population, to provide needed workers. The effects of economic growth are clearly catching up with these two key areas of the "other Maine." In the interviews, businesses indicated that managing their human resources was increasingly capturing the center of attention. Companies were already looking beyond the shrinking pool of the unemployed to the latent labor force of the presently employed.

The costs of employment will increase. As wages and salaries increase, however, the regional economy as a whole will see increased economic activity. The trick for businesses in Maine will be to balance the increased costs of labor with increased productivity to maintain competitiveness. How businesses are dealing with labor costs in these two regions will be discussed in the next issue of Maine Business Indicators. In the issue following that, matters surrounding the training and education of the workforce, which is one key to enhanced productivity, will be examined. As the Workforce Assessment Project proceeds over the next two years, we will provide updates on the state of the workforce in Maine in MBI.

Notes

¹ The Mid-State Economic Development Corporation provided funding for the analysis of the Waterville labor market area. The Northern Maine Development Commission paid for the analysis of the Presque Isle-Caribou area. For the balance of the state analysis, CBER will seek funding from the Maine Department of Economic and Community Development and the U.S. Economic Development Administration.

² The analysis for the Waterville and Presque Isle-Caribou LMAs was conducted as these areas are defined by the Maine Department of Labor. The Waterville LMA contains 14 towns, while the Presque Isle-Caribou LMA is comprised of 28 cities and towns as well as unorganized territory.