🔒Manufacturers, others rush to CT’s Shared Work Program amid pandemic disruptions

Like many Connecticut aerospace companies, Middletown-based Pegasus Manufacturing Corp. endured significant headwinds during the COVID-19 pandemic, as air travel curtailed significantly.

In fact, Pegasus Human Resources Manager Francine Beaulieu said the company could have easily been forced to lay off a substantial number of its 92 employees, had it not made use of the state’s Shared Work Program, which offers an alternative to job cuts by allowing struggling employers to temporarily reduce worker hours and supplement lost wages with the help of partial unemployment benefits.

“At the height of COVID there really was no travel,” Beaulieu said. “All our key customers were pushing back their orders; their demand kept [diminishing].”

However, since Pegasus enrolled in the Shared Work Program, which was expanded last year by Gov. Ned Lamont amid the pandemic, the company hasn’t made any layoffs, and is currently looking to fill six open positions.

In a typical year, 230 companies enroll in the state’s Shared Work Program, but that number ballooned in 2020 when nearly 1,500 employers participated between March and August. Experts say the program has played a key role in helping the manufacturing sector bounce back from the pandemic-induced recession.

As demand in aerospace and other key manufacturing sectors increases, employers that were able to keep workers on the payroll during the pandemic are having an easier time ratcheting up production, experts say.

The program’s expansion was underwritten by federal CARES Act funding passed by Congress last year, and as manufacturing employment numbers improve, state officials are starting to look at using other federal dollars to attack the industry’s long-running workforce shortage.

Maintaining workforce

Established over two decades ago, Connecticut’s Shared Work Program is overseen by the state Department of Labor and provides a weekly unemployment compensation payment to employees whose work weeks have been reduced. It’s available to employers with two or more workers and the reduction of work can’t be less than 10% or more than 60%. Participating employers also can’t eliminate or reduce any fringe benefits.

A key benefit to employers is that it allows them to avoid the expense of recruiting, hiring and training new workers in a recovery. When business upturns, employees resume regular hours and employers are able to ramp up more quickly with an experienced team in place.

Before last year, companies enrolled in shared work could use the system for a year, but Lamont extended that to two years.

Many employers weren’t aware of the program before COVID-19 forced tens of thousands of companies across the state to apply for pandemic-related emergency funding like the federal Paycheck Protection Program and a number of other federal- and state-level initiatives, said Ashley Rivera, program and service coordinator for the DOL’s Shared Work Unit.

Rivera said the program has been used by myriad industries, helping save 33,000-plus jobs during the pandemic.

A total of 1,485 employers are currently enrolled in the program, according to DOL.

“You have employers who are facing a layoff in the next week or two,” Rivera said. “They were so thankful they were able to use the program; it saved jobs.”

During the two-month business shutdown at the beginning of the pandemic, Connecticut lost more than 17% of its jobs, said Patrick Flaherty, DOL’s director of research. The state’s manufacturing industry lost nearly 8% of its workforce during that time, Flaherty said. The lower number may reflect a degree of insulation the manufacturing sector enjoyed from COVID restrictions, as the state declared manufacturers to be “essential,” which allowed them to maintain in-person operations.

Manufacturers shed about 12,700 jobs in March and April 2020, and have recovered about 36% of the workforce since that time, DOL data show. The industry currently employs about 152,800 people.

Flaherty said the Shared Work Program over the last year-plus has clearly kept a host of companies in manufacturing, retail, hospitality and other industries from making significant layoffs amid disruptions to orders and supply chains.

“Once the supply chains are restored, [these companies] are still going to have those workers,” Flaherty said. “They’re going to be able to just ramp up the hours of the person who was already there; they don’t have to train a new person.”

That’s key in manufacturing, which still faces a long-running workforce shortage in which experienced workers are retiring without enough younger people to replace them.

A 2020 survey by the Connecticut Business & Industry Association (CBIA) found that 11% of the state’s manufacturing workforce is expected to retire between 2021 and 2024. Additionally, the COVID-19 pandemic likely led some workers to retire earlier than expected.

CBIA lobbyist Ashley Zane said shared work has been beneficial to manufacturers that enrolled in the program, as they didn’t lose workers who already possess the training and certifications necessary to perform their jobs.

“It’s better for the businesses because they don’t have to incur the cost of laying off workers and training new ones, and don’t have to lose good employees,” Zane said.

That was certainly the case at GMN USA, a Bristol-based subsidiary of GMN Germany, which makes machine tool spindles used in the aerospace industry. A slowdown of orders forced the company to reduce hours by 40% for about a year, Operations Manager Lisa Raulukaitis said. All of the company’s approximately 20 employees participated in the Shared Work Program for a year beginning in spring of 2020, and the company didn’t make any layoffs, she said.

“[Without Shared Work] we would have had layoffs, and then we would have missed deadlines,” Raulukaitis said, noting the company is no longer using the program, and business has mostly bounced back.

Pegasus isn’t currently using the Shared Work Program either, said HR manager Beaulieu. But layoffs would have been damaging to the company, since the employees they have are highly skilled, and not easily replaced.

Long-term shortage persists

Zane said as companies continue to recover from the pandemic, the manufacturing industry’s workforce shortage is still a significant problem. She said it might make sense for the state to look at using other public resources to address the issue.

State officials are planning to bolster manufacturing workforce development efforts in coming weeks, said Kelli-Marie Vallieres, who leads the year-old Connecticut Workforce Unit. Just as CARES Act funds were used to underwrite the shared work expansion, federal dollars will also help fund a new manufacturing workforce development effort, Vallieres said.

“With regards to manufacturing training programs … we’re about to launch a program that will utilize the $70 million of [federal stimulus funds] that have been given to the office of workforce training,” Vallieres said. “We plan to make a significant investment there.”

Vallieres declined to provide further details, but said her office will likely make an announcement later this month.

Flaherty at DOL said data show graduates from Connecticut’s technical high schools and community college manufacturing training programs have been successful in securing employment at local manufacturers. He agreed that expanding state-backed job training programs could go a long way toward filling vacant industry jobs.

“The manufacturing training programs we have now are working extremely well and maybe the solution [to manufacturing workforce shortages] is more of them,” Flaherty said.