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Houston has the jobs, but employers must be willing to take a chance

DATA ,  EXPLAINERS ,  RESEARCH :  Jan. 12, 2024 ECONOMIC DEVELOPMENT | EDUCATION

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There should be plenty of jobs available in the Greater Houston region this year, but is the area producing enough work-ready people to fill them?

In its yearly prediction released in December, the Greater Houston Partnership anticipated 57,000 new jobs in the region in 2024, which is in line with the actual growth reported in the Houston area in 2023. In the first 10 months of last year, Houston added 53,700 jobs, the GHP reported. In the comparable period of 2022 — during the post-COVID pandemic expansion — more than 122,800 jobs were created.

If the projected jobs for 2024 get filled, the total estimated employment of 3.4 million people in the region would be a record.

In a bid to meet the needs of the growing workforce, according to a Kinder Institute study, more than two-thirds of high school graduates in Houston participate in career and technical education programs. CTE includes a wide range of high-wage, high-skill occupations, from nursing, business and energy to skilled technical fields such as welding or HVAC repair. All these areas are expected to see job growth in Houston and Texas.

“When we think about CTE training going on in our high schools right now, we’re not talking about welding and mechanics anymore,” said Dan Potter, senior director of research at the Kinder Institute. “We’re talking about bookkeeping, finance, business; less so like IT cyber security stuff, but it’s still there. And so, to some degree, it’s those pathways through high school providing people with the experiential knowledge and certification.”

However, there is a disconnect from what students learn in high school, oftentimes getting certifications, and what happens once they graduate. Many districts in the Greater Houston area participate in dual-credit programs with area community colleges, meaning some students are able to graduate high school and get their associate's degree at the same time.

“What is happening is they seem to be directing that toward food services, toward retail,” Potter said. “What they could be doing is potentially directly lined up for these much more career-oriented types of positions. But it’s going to come back to the question of what are those positions looking for?”

More companies are looking for skilled workers rather than ones with a degree, but the prospects are still hard for those without a degree. It takes a company willing to alter what has been a long-standing idea that a degreed person is more capable than an experienced one.

“There’s a weird balance there, right?” Potter said. “Because at the same time that we’ve got these jobs in CTE space — which arguably requires further advanced degrees — we’re simultaneously hearing other people dropping college requirements from their jobs.”

In recent years, numerous companies — including Google, IBM and Tesla — have ditched the degree requirement for many positions and opted instead for experience and ability to grasp concepts and possessing job-related skills. Even the city of Philadelphia recently dropped its degree requirement for many positions.

Holding Houston back is a tight job market where economic uncertainty and labor shortages loom. In creating its projection, GHP analysts cited the Baker Hughes U.S. rig count (which was down more than 18% when surveyed in October compared to the same time in 2022) as well as drops in industrial exports from the region and only moderate growth in sales tax collections.

The GHP reports that Houston should expect slower job growth, more vehicles on highways, more crowded airports, fewer housing starts and an uptick in energy prices. It also predicts a slump in commercial construction, meaning fewer construction jobs available. With fewer housing starts, the real estate market is also expected to see a dip in employment.

The 2023 Kinder Houston Area Survey indicated that two-thirds of Houstonians, across racial and ethnic groups and education levels, rated job opportunities in the area as “good” or “excellent” but only half of adults saw their personal financial situation as likely to improve over the next three years. The latter number has declined for four consecutive years and is now at its lowest level since 1994.

Meanwhile, more than 70% of Houston residents reported being “concerned” or “very concerned” about the availability of well-paying jobs, according to another Kinder Institute survey.

The state of Texas has a rosier outlook on the unemployment issue.

In the latest figures from the Texas Workforce Commission, the state leads the nation in job growth and the Houston-The Woodlands-Sugar Land region is resting on an unemployment rate of just 3.8% in November. That is still higher than the state’s overall rate of 3.5%, which equals the nation’s rate.

“The Texas labor market has continued to thrive month after month, and continues to lead the nation in many categories,” TWC Commissioner Representing Employers Joe Esparza said in a news release. “As we head into 2024, the future looks bright for Texas employers across the state seeking to expand their business and tap into the state’s growing workforce.”

Filling jobs in the CTE realm is still the biggest obstacle facing Houston.

The U.S. Bureau of Labor Statistics indicates that in the year that ended in October 2023, education and health services had the largest gains in employment in the Houston area with more than 24,600 jobs added. Of that total, health care and social assistance increased by 23,300 jobs.

The GHP contends there are plenty of jobs in the Houston region. However, without some workers reentering the workforce or expanded legal migration there will be a continued chronic worker shortage.

“What matters is experience,” Potter said. “They’ll talk all the time like, ‘I don’t need you to have a Ph.D.; I don’t need you to have a B.A. I need you to have some soft skills and I need you to have a couple of hard skills and show up, and we’ll do the rest.’”

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