Ranked #8: Availability of Skilled Labor

Finding skilled workers to fill jobs is a significant challenge in most site selection projects. For example, when you invest $230 million to expand operations for your company's most successful production line, you want to be sure that you have the most highly skilled employees to operate the equipment. Brad Rhorer knows this all too well.

Rhorer is a group leader at Subaru of Indiana Automotive (SIA). In early 2007, SIA's Lafayette, Ind., plant was contracted by the Toyota Motor Corporation to meet demand for the Toyota Camry - the best-selling car model in the United States. Toyota planned to expand its operations in a region with a significant number of workers whose skills matched those needed on the Camry production line.

"They were looking for manufacturing experience," Rhorer said. "But more than that, they were looking for people who had good teamwork skills, good listening skills, and could follow standardized work instructions. Here, you do the same process the same way every time to ensure quality in the car, so you need people who can follow those instructions."

Finding the Skilled Labor
It boils down to skills. Eighty-five percent of the executives who responded to Area Development's Annual Corporate Survey ranked "availability of skilled labor" as very important or important when considering site selection. But how can a company determine where the skilled labor resides?
Government data - such as unemployment and high school and college graduation rates - give some useful information but rarely indicate the employability skills of residents. Some communities conduct local labor surveys that are useful in estimating the percentage of workers in the region that may be interested in changing employers, or identifying the degree of underemployment in the area. But this information still does not provide executives with a solid understanding of a region's work force skills.

Toyota, on the other hand, had access to data on regional work skills that were used in making the decision to expand to Lafayette. Thousands of Lafayette-area residents had been tested for employability skills using ACT's WorkKeys assessment system. The Tecumseh Area Partnership, a work force and economic development partner entity covering 14 counties in west-central Indiana, has worked with regional companies for years in hiring and developing workers using the WorkKeys system.

"Part of Toyota's decision to relocate to Lafayette was our database of more than 6,000 assessed job applicants who were assessed using WorkKeys," said Deborah Waymire, chief operations officer of the Tecumseh Area Partnership. "We could demonstrate that we have not only a large work force, but a skilled work force that meets their specific needs."

Foundational Skills
Executives and site selection consultants are looking for regions that have workers with foundational skills - such as reading for information, applied mathematics, the ability to locate information, and teamwork - that indicate job-readiness and trainability. The WorkKeys system has been used by industries for more than a dozen years in hiring for job positions and training in foundational skills. The "job profiling" component of WorkKeys allows businesses to identify the applicable skills and skill levels relevant to a specific job. Those skill levels are then compared with examinees' WorkKeys test scores to find which individuals have the right skills for the job.

While the system benefits job-seekers and businesses in this way, economic developers collect WorkKeys skill data and use it to tout residents' skill levels and attract industries to their regions. ACT is further aiding businesses locate populations of skilled workers by creating a national foundational skill certificate system that includes a skill database, searchable by region.

ACT's National Career Readiness System awards certificates to job-seekers who demonstrate their employability skill levels by scoring highly on WorkKeys exams, and it helps them connect with employers looking to hire for those skills. Just as the ACT college admissions exam helps colleges determine which students are ready for postsecondary education, the National Career Readiness System helps businesses identify highly skilled job candidates who are ready for jobs. The system includes a national "Job and Talent Bank," giving employers a way to find highly skilled employees in a database that is searchable by ZIP code, school district, and other criteria.

Helping Firms Relocate and Expand
Since WorkKeys is used widely across the country, it allows for interstate use by companies looking to relocate or expand. Some examples follow:

The Indiana Department of Workforce Development has brought national industries to the Hoosier State for years through federally funded services available at its network of WorkOne employment centers. It offers pre-commitment packages for companies looking to relocate. This involves dispatching a job profiler to an existing company plant, determining the skill level needed for specific jobs, and assessing and matching highly skilled residents to the jobs before the new Indiana plant has opened. One example is Autocar, which relocated to Hagerstown, Ind., while the state assisted with hiring and training more than 200 employees. The plant became profitable 18 months after the relocation.

"We've been pretty aggressive in working with companies that are seeking to expand or locate in Indiana, offering a wide array of economic and work force development tools and services," said Andrew Penca, commissioner of the Indiana Department of Workforce Development. "We have found that the WorkKeys system provides us with a very efficient and effective tool to assess a company's work force needs."

Likewise, the North Carolina Community College System has attracted industries to its region - and encouraged others to grow - via its New and Expanding Industry Program, which includes funding for the WorkKeys system. The state-funded program is designed to bring high-skill, high-wage jobs into the state using work force development services at each of the state's 58 community colleges.

In addition, the program offers skills training for North Carolina residents, helping them boost their skill levels and matching those needed by incoming industries. "We use WorkKeys as a funneling system to help new and expanding companies find the best skilled candidates from a large number of potential candidates," said Maureen Little, senior regional director with the North Carolina Community College System.

Another Example
High-technology companies such as PGT Industries have taken advantage of the New and Expanding Industry Program. In 2006, the manufacturer of impact-resistant windows and doors began working with the North Carolina Community College System while relocating to a larger facility in Salisbury, N.C., hiring new employees and promoting incumbents using the WorkKeys system. The company profiled four technician, shipping, and receiving jobs and used employee selection and skills training to fill positions, all utilizing the WorkKeys system.

"They rolled out the red carpet," said Stacy Smith, training generalist with PGT. "They offered pre-designed training packages, as well as customized training, and it's free training for us. If you have internal training programs, they'll reimburse you for that. And the caliber of individuals we've hired using the WorkKeys system is far higher than when we were without it."

PGT accepts Career Readiness certificates from job applicants when hiring and offers training for incumbent employees to receive a certificate. The process offers a morale booster for employees, while expediting the hiring and training processes. "With WorkKeys, every person we hire can easily grasp training concepts because they already have those base skills," Smith said.

The $370 million company plans to double its growth in the next five years, with more than 1,000 employees expected to work at its North Carolina facility. "WorkKeys will be an integral part of that step for all hiring and promotions," Smith said.

Companies' use of programs like WorkKeys and Career Readiness certificates is further evidence of the importance of the availability of skilled labor when making a relocation or expansion decision.

Note: ACT is an independent, not-for-profit organization that provides more than a hundred assessment, research, information, and program management services in the broad areas of education and work force development. Each year, ACT serves millions of people in elementary and secondary schools, colleges, professional associations, businesses, and government agencies, nationally and internationally. ACT has offices across the United States and throughout the world.