6
Findings and Recommendations

The nation’s economy and the lifestyles of its citizens depend heavily on a safe and efficient transportation system. Surface transportation agencies—including primarily state departments of transportation (SDOTs) and transit agencies—deliver this system with the support of a host of private-sector contractors, consultants, and other businesses. Most agencies are under considerable pressure today because of several high-risk issues associated with key components of the transportation workforce. Individually, these issues are of concern, and in combination they are critical to the functioning of the agencies and to the delivery of transportation infrastructure and service. The committee identified five key issues that characterize the current transportation workforce situation for federal, state, and local transportation agencies.

  • The transportation workforce requires a wider range of skills and abilities than in the past because of changing and expanding agency missions as well as new technologies; this has coincided with level or decreasing staffing in transportation agencies.

  • Transportation agencies face an unprecedented level of retirements of senior-level managers over the next decade—nearly double the rate for the nation’s entire workforce.

  • The agencies are significantly underinvesting in training their workforces.

  • The agencies are finding it increasingly difficult to recruit and retain professionals and technicians.



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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies 6 Findings and Recommendations The nation’s economy and the lifestyles of its citizens depend heavily on a safe and efficient transportation system. Surface transportation agencies—including primarily state departments of transportation (SDOTs) and transit agencies—deliver this system with the support of a host of private-sector contractors, consultants, and other businesses. Most agencies are under considerable pressure today because of several high-risk issues associated with key components of the transportation workforce. Individually, these issues are of concern, and in combination they are critical to the functioning of the agencies and to the delivery of transportation infrastructure and service. The committee identified five key issues that characterize the current transportation workforce situation for federal, state, and local transportation agencies. The transportation workforce requires a wider range of skills and abilities than in the past because of changing and expanding agency missions as well as new technologies; this has coincided with level or decreasing staffing in transportation agencies. Transportation agencies face an unprecedented level of retirements of senior-level managers over the next decade—nearly double the rate for the nation’s entire workforce. The agencies are significantly underinvesting in training their workforces. The agencies are finding it increasingly difficult to recruit and retain professionals and technicians.

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies Few transportation agencies are positioning their human resource activities at a strategic level so the workforce needs described by the organization’s strategic plan can be met. These findings echo those identified in an earlier study about supply and demand issues in the transportation profession (TRB 1985) and suggest that, although specific details might have changed, there are fundamental issues that continue to need attention. These key findings are addressed in the following section. The committee’s recommendations for future action are then given. FINDINGS Surface transportation agencies require a workforce encompassing a wider range of skills and abilities than in the past because of changing and expanding agency missions and new technologies. The Intermodal Surface Transportation Efficiency Act of 1991 and the Transportation Equity Act for the 21st Century (1998) institutionalized many new mission requirements for surface transportation agencies. As a result, these agencies must address a much larger set of issues and responsibilities than in the past—including environmental, social, and community impacts; intelligent transportation system and information technologies; alternative financing mechanisms; more extensive community involvement; and metropolitan and corridor planning. Quality initiatives, a greater focus on customer service, and more openness in all stages of program and project planning have further expanded agency missions and the skills required to achieve them. In addition, SDOTs are increasing their focus on freight operations. They are engaging in more partnering with nontransportation groups and local governments in project development and with the private sector in pursuit of alternative financing arrangements to fund capital projects. Finally, to meet their expanding needs in all areas with little change in the size of agency staff, many agencies increasingly are contracting out work to the private sector. For this purpose agencies need more program and contract managers.

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies Transportation agencies face an unprecedented level of retirements of senior-level staff members over the next decade. The aging of the nation’s population and workforce is well documented. The baby boom generation will begin reaching age 65 in 2011, and many will retire. Between 2000 and 2015, the number of workers over age 55 throughout the nation is projected to increase by 69 percent. Against this backdrop, public-sector employers are facing levels of retirement for their professional and managerial staffs of up to 50 percent in the next 10 years, more than double the rate for all workers in the nation. The prospect of high levels of retirement—and the concomitant loss of experience and expertise—is exacerbated for those agencies previously faced with downsizing or hiring limitations in response to executive or legislative direction. In many such cases, agencies have limited numbers of experienced midlevel staff available to move up and fill those positions. Transportation agencies are significantly underinvesting in training their workforces. The underinvestment is especially obvious when agencies are compared with successful or benchmark organizations. While 2 percent of employee salaries—the equivalent of about 40 hours of training per year—is considered a benchmark level for training expenditures, many transportation agencies invest much less. Of the $38 million in discretionary federal funds available to SDOTs for training and workforce development in 2001, only $9 million was used for this purpose. Nevertheless, the expenditures of state funds by some SDOTs exceed the federal funds that are available. Several have developed extensive training programs to meet their needs and focus employee attention on the opportunities available. Such programs, however, are the exception, and they are unlikely to address national issues or the training needs of other agencies. Congress has authorized transit agencies to spend up to 0.5 percent of federal operating and capital funds for training, a total of about $33 million in fiscal year 2002. While the Federal Transit Administration (FTA) does not compile information on what transit agencies spend on training, anecdotal evidence from FTA, the American Public Transportation Association, and committee members familiar with transit agency spending indicates that only a small portion of the amount available is spent on training.

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies Just as important as an adequate training investment is careful monitoring of the quality of the training and its relevance to outcomes—including improvements in productivity and service delivery. Agencies with strong training programs are beginning to develop specific performance measures. Also, despite the wider range of skills needed today by transportation agencies, few systematically develop alternative education and training pathways to meet current and future staff needs. Civil engineers have been the backbone of many agencies largely because civil engineering education prepares students for the bulk of work for which transportation agencies have traditionally been responsible. Nevertheless, with the broadening of the transportation agency mission and increasing skill needs, undergraduate programs in business, planning, environmental science, public policy, and other areas—as well as selected community college programs in business and technology-related fields—provide skills that can form the basis for transportation careers. Recruiting from these and possibly other sources, combined with highly focused training opportunities and incentives, could help agencies meet future workforce needs. Transportation agencies, like many other public agencies, find it increasingly difficult to recruit and retain professionals and technicians. Public agencies and private organizations compete for many of the same employees, including transportation professionals, environmental specialists, maintainers, technicians, and others. Although some employees favor the combination of compensation and work–life balance offered by public agencies, many job seekers base their employment choices on salary. Typically, the public sector pays less than the private sector, especially for entry-level jobs and positions requiring new skills. Moreover, young workers no longer face the stigma previously associated with moving from employer to employer, and the portability of retirement programs facilitates such movement. In addition to difficulties in attracting entry-level workers, transportation agencies report difficulty in retaining young professionals with 5 or more years of experience. Many transportation agencies recognize the importance of aggressive retention programs and other elements that make a difference—

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies including a workplace that employees find motivating and enriching, training programs, work schedule flexibility, job reclassifications, and employee recognition activities. Public agencies, however, often are faced with external challenges, such as executive and legislative resistance, that limit such benefits and bonus programs. Few transportation agencies are positioning their human resource function at a strategic level within the organization so that the workforce needs—recruiting, retention, training, and succession planning—of the agency’s strategic plan can be met. The most successful private- and public-sector organizations have raised human resource management to the strategic level in their organizations because they recognize that human capital is a key to successful performance. Several transportation agencies have already changed their organizational structures to make the human resource function a strategic and equal partner with other key agency functions. Without this organizational change, agencies will continue to fill positions in a piecemeal fashion instead of identifying future workforce needs and addressing gaps in their ability to meet those needs through a strategic human resource program. RECOMMENDATIONS The following recommendations address actions to be taken by Congress, the U.S. Department of Transportation (USDOT), and the nation’s surface transportation agencies. Congress determines surface transportation spending priorities, principally through surface transportation authorizing legislation. Congress and USDOT are responsible for the national transportation system, and USDOT relies heavily on the competency of thousands of state and local transportation agencies and private-sector organizations for infrastructure provision and service delivery. The committee believes that the ultimate success of its recommendations will depend on collaboration and partnerships involving the agencies, the federal government, the private sector, and academic institutions. Possible consequences of inaction follow each recommendation.

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies Transportation agencies at all levels—federal, state, and local— in partnership with the industry, employee organizations, and unions, should establish training as a key priority. Training is essential in providing employees with the knowledge, skills, and abilities to perform their jobs and in supporting recruitment, retention, and succession management efforts. Moreover, because each agency determines how it will accomplish its mission, only the agency can accurately identify the knowledge, skills, and abilities it needs. In this way, agencies exert their individual leadership regarding workforce development issues. In addition, because they depend on the work of private contractors, transportation agencies must develop partnerships among themselves and with the private sector and educational institutions to develop and execute their training programs. Consequences of inaction: Lack of adequate training can lead to ineffective agency operations, inefficient use of limited resources, and higher future costs to meet future needs. Surface transportation agencies should invest more in training than is currently the case. Commitment to training is measured by the amount of investment in training and the effectiveness of the training. SDOTs currently are permitted to use 0.5 percent of the funds apportioned to the state under Section 104(b)(3) for the surface transportation program account for training and education, but many states do not use those funds for training. Data based on state surveys indicate that states provide about 10 hours of training per employee per year. This represents about 0.5 percent of salaries. Transit agency spending is estimated to be even less. Studies of successful organizations indicate that 2 percent of salaries is an average benchmark; some organizations, including the Federal Highway Administration (FHWA), invest even more. Such investment is needed by agencies to meet current and future workforce skill needs. Even more investment may be needed if skill development has been neglected in the past. The administration’s proposal for reauthorization of surface transportation legislation calls for a large increase in the funds that transportation agencies can use for education and training. Several funding categories would be added to the current single eligible fund-

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies ing category. Agencies would have more funds available for education and training and would be able to spread such expenditures over more categories. The increased eligibility should result in an increase in overall spending for education and training and provide significant dividends. The commitment to training also requires effective use of the training investment—as measured by improved performance, lower costs, and other metrics—and the cooperation of the workforce. Consequences of inaction: Failure to invest in training leads to skill gaps and adversely affects the agencies’ ability to implement new technologies and innovations. More federal surface transportation program funds should be eligible for use by state and local transportation agencies for training and education activities. The federal government is dependent on state and local transportation agencies to deliver a national transportation program. In surface transportation there is a long history of true federalism whereby state and local governments carry out a national program with guidance and funding from the federal government. Congress currently permits SDOTs to use surface transportation program funds for training and education, but the competition for funds is great and many states do not use all of the funds available for training. Similarly, transit agencies can use a portion of their federal operating and capital assistance funds for training. Another component of federal funding for transportation workforce training is the University Transportation Centers (UTC) program, which provides about $160 million to 33 universities for both education and research. FHWA’s National Highway Institute, with an annual budget of $6 million, and FTA’s National Transit Institute, with an annual budget of $4 million, help train the transportation workforce. The Local Technical Assistance Program (LTAP) makes $140,000 available to each state on a 1:1 matching basis for training and technical assistance. The committee supports the administration reauthorization proposal that calls for making more existing program funds eligible for training and education. By adding several existing programs to those programs whose funds are

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies eligible for training and education expenditures, the administration’s proposal, if enacted, would yield a 200 percent increase in available discretionary funds. Each agency could then decide how much of these funds it wishes to invest in education and training across a number of eligible programs. Many federal transportation programs—which amount to about $36 billion annually—encourage the use of new methods and advanced technologies, including planning and environmental models, systems analysis, intelligent transportation systems technologies, community involvement, and alternative-fuel transit vehicles. These programs, however, do not support the training of agency staff responsible for implementing, operating, and maintaining these new methods and technologies. This lack of support acts as a barrier to wider implementation of transportation system innovations that can improve safety and performance and reduce costs. It also hampers the federal stewardship role aimed at ensuring that state and local governments use national resources efficiently. The committee also supports reauthorization proposals to increase funding for existing federal programs that directly support education and training, including FHWA’s National Highway Institute, FTA’s National Transit Institute, LTAP, and the UTC program. Such increases should include incentives that encourage more state and agency spending on training—for example, tying the funding to desired benchmarks for training and training effectiveness or encouraging the use of state funds to supplement federal training funds. Incentives should be added to the UTC program to encourage the UTCs to partner with community colleges to provide specific education and training in areas for which the community colleges are best suited. Although some states provide substantial funding for transportation workforce training, largely through their departments of transportation, many could do more. Linking existing federal and state education dollars more closely with state initiatives that address employer needs for higher-skilled workers would be helpful. The use of existing state training funds for incumbent and public-sector transportation employees, especially if such action supports economic development programs, should be encouraged.

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies Increased spending for transportation workforce education and training should be accompanied by requirements that these programs identify and document clear outcomes from associated training efforts. Only in this way can the return on investment of such training be determined. The measurement of results such as increased productivity, reduced costs, or other appropriate metrics would help build support for training funds. Consequences of inaction: Failure to increase federal spending for training will limit the ability of all agencies to provide education and training needed to decrease project delivery times, improve service, reduce system operational problems and failures and their consequences, and use new technologies. USDOT, in partnership with transportation agencies, the private sector, educational institutions, unions, and employees, should undertake an initiative that focuses on innovation in human resource practices and addresses recruitment, training, retention, and succession management for transportation agency personnel. This initiative can provide leadership; a focal point for federal, state, and local agency efforts; and a basis for creating partnerships among all parties. The federal government, because of its national transportation responsibilities and the support available within the human resource organizations in USDOT and the modal agencies, is in an excellent position to lead this initiative as a follow-up to the USDOT-sponsored 2002 National Transportation Workforce Summit. USDOT can interact directly with other federal agencies that are moving forward on workforce development initiatives and acquire useful information from them. The transportation workforce initiative can build on current efforts, including the Transportation Workforce Development website being developed by FHWA in partnership with the American Association of State Highway and Transportation Officials to document exemplary workforce practices at SDOTs. Another example of current work that would be useful to incorporate is that of the American Public Transportation Association’s Workforce Development Task Force. Broadening these efforts to include experiences from all types

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies of transportation agencies and private-sector organizations would provide much-needed information and support. All stakeholders in the nation’s workforce—agencies, academia, trainers, unions, employees, and the private sector—should participate in setting priorities and direction for the initiative. They should work together to compile information to examine the national implications of transportation workforce issues. Consequences of inaction: Without federal leadership in an initiative aimed at innovation in human resource practices, a significant opportunity to improve transportation workforce practice and share information and data will be lost. Transportation agencies should partner with universities, community colleges, training institutes, and the LTAP centers to meet agency training and workforce development needs. Universities, community colleges, training institutes, and the LTAP centers are organized to provide education and training and have the technical expertise to deliver the curricula, courses, and training materials needed to meet agency skill needs. Many have already done so. In addition, transportation agencies could leverage their training investment by partnering with the private sector in areas of common interest and need. They might have to address impediments—legal, procurement, institutional, and others—to such partnerships, but the growing experience in public–private partnering could help suggest new ways to overcome such barriers. Consequences of inaction: Failure to partner with established education and training providers prevents agencies from taking full advantage of key workforce development opportunities. Transportation agency leaders should make human resource management a key strategic function of their agencies. Top-performing private- and public-sector organizations have raised human resource management to the strategic level in their organizations because they recognize that human capital is key to successful operation. In addition, this reflects President Bush’s 2002 Management Agenda for improving the management and performance of

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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies the federal government. The leading initiative of this management agenda is strategic management of human capital. Moreover, in light of federal government dependence on state and local transportation agencies and their workforce to deliver transportation infrastructure and service, support for strategic management of human capital in these agencies from the federal government—through USDOT—is a key to successful federal program delivery. Several transportation agencies have already made organizational changes to address this need, and many others are considering doing so. As workforce development issues become a higher priority because of increasing skill needs, large numbers of retirements, and greater competition in recruiting new staff, agency leaders must elevate the human resource function and make it an equal partner with other strategic agency functions. Without this organizational change, agencies will continue to fill positions one at a time and be unable to meet future workforce needs through a strategic human resource program. Consequences of inaction: Failure to change agency human resource focus from solely filling vacant positions to strategically addressing workforce needs will result in agencies falling short of accomplishing their missions, especially in light of today’s competitive job market. All these recommendations aim at improving the performance of transportation agencies and, ultimately, the nation’s transportation system. They reflect the goals and benchmarks of successful public-and private-sector organizations. They also reflect the primary goal—improving human capital—of President Bush’s 2002 Management Agenda. REFERENCE Abbreviation TRB Transportation Research Board TRB. 1985. Special Report 207: Transportation Professionals: Future Needs and Opportunities. National Research Council, Washington, D.C.