Labor: it's one of the greatest concerns for any company seeking to expand or relocate. With national unemployment at nearly 10 percent, finding qualified workers should be easy - but that's not the case. In fact, companies are encountering a lack of supply to fill demands for specialized skills.
"Several reports indicate a large number of standing vacancies in the U.S. economy," says Peter Cappelli, professor of management and director of the Center for Human Resources at the Wharton School of Business. "About 2 percent of all jobs in the United States are currently vacant. From what I've seen, these are not entry-level jobs. The skills that are in short supply are work-based skills, the kind that are only learned on the job - experience with these vendors, knowledge of these work practices, an understanding of this industry."
Companies expect most future positions to require additional education and training, another study shows. And the Business Roundtable, an association of chief executives of major corporations, reports that 62 percent of members say they have difficulty finding qualified applicants to fill vacancies. Many also say that at least 16 percent of their work forces have skill gaps that burden productivity.
"This shortage of qualified employees has had, and continues to have, a negative impact on businesses," says Donna Steffy of Global Human Resources Outsourcing. "As a significant percentage of the jobs that are opening up are in fields such as advancing technologies, medicine, clean-energy research, biotech, and engineering, many companies are struggling to gain access to a job pool with the required skill sets."
So how do companies find the skilled employees they need?
Many communities have large numbers of highly skilled, displaced workers due to facility closures and layoffs. But the availability of hundreds or thousands of available workers from a similar industry with the right skills could actually attract companies considering relocations or expansions.
Ready-to-Go Work Forces
"For companies considering new manufacturing operations in the United States, the states that have been hardest hit with unemployment are the same states that recorded the highest percentage of manufacturing employees before the recession," says Buzz Canup, founder and president of Canup & Associates. "North Carolina, Tennessee, South Carolina, Alabama, Mississippi, and Kentucky have unemployment rates of 10 percent or higher, which includes a surplus of workers with manufacturing experience. Similar downturns in manufacturing have occurred in Oregon, Washington, California, Nevada, Ohio, Illinois, Michigan, and Indiana. These states have always been prime sites for manufacturing companies and will be even more attractive over the coming months."
Several Indiana communities have proactively marketed their unemployed workers. Elkhart suffered heavy job losses after the RV industry collapsed several years ago, but has since attracted new businesses. Electric car manufacturer Think North America will invest more than $43 million in an automotive assembly plant there that will create 415 direct jobs and up to 4,500 ancillary jobs by 2013. The city's ready and able work force was a top draw for the company.
In October, the Indiana Economic Development Corporation announced $725,000 in performance-based tax credits and up to $50,000 in training grants to Nexus RVS LLC, a new RV maker with its sights set on Elkhart. The company will invest more than $2.8 million to lease and equip a 109,000-square-foot plant there.
"We selected Elkhart because of the enormous knowledge base of both the individual workers and the vast supplier base," says Claude Donati, Nexus president.
A few miles away in Fort Wayne, truck manufacturer Navistar will close its facility within three years as part of a consolidation, laying off about 1,000 workers. Fort Wayne is leveraging this displaced group of highly skilled workers as an asset to attract new business opportunities. With backgrounds in mechanical, electrical, and fatigue engineering, and other technical skills, this labor pool can accommodate technical positions in industries such as automotive, defense, aerospace, renewable energy, and medical device manufacturing.
The Northeast Indiana Regional Partnership is working with Fort Wayne to implement a targeted outreach strategy to identify Fortune 500 companies with design, research, and engineering requirements, as well as Midwestern and national contract engineering and design firms.
"While we are still determined to show Navistar that Fort Wayne is a place where the company can build for the future, we are more determined than ever to retain Navistar's highly skilled employees," says Fort Wayne Mayor Tom Henry. "It is our mission to show them that there are opportunities for them right here, should they choose to stay. They are an exceptional community asset. We are united in our fight for good jobs and our talented work force."
The city is pursuing Trade Adjustment Assistance (TAA) funds from the Trade Act Program, a federal initiative that helps retrain employees who are displaced due to foreign or import competition. If approved, Navistar workers could qualify for at least 130 weeks of TAA training assistance and income support.
Meanwhile, Fort Wayne and the Northeast Indiana Regional Partnership are targeting industries that utilize technical, research, and design personnel. They are also networking with national and international site selection consultants and business relocation specialists to identify possible clients with interest in the city's work force.
"Our talented, ready work force is an unparalleled community asset," Henry says. "Each individual is a resource who adds value to our area and strengthens it. This initiative will use our pool of exceptional workers as a magnet to attract new jobs and economic opportunity into our region."
On the West Coast, California, though hit hard by the recession, is still the land of opportunity for businesses seeking existing skilled workers in manufacturing, as well as sectors including the financial industry and customer service.
In Sacramento, several call center closures over the past five years have resulted in the elimination of thousands of positions. Now the Sacramento Employment and Training Agency (SETA) is working to attract companies that need those workers' skills and experience by marketing the available labor pool, says Terri Carpenter, SETA public information officer. The city's efforts are paying off. Advanced Call Centers Technologies has already located in Sacramento, moving into a vacant call center facility and hiring 75 specialists to start its operations.
"We also have several companies who are waiting in the wings, holding off on siting, hiring, and ramping up until the economy has stabilized a bit more," Carpenter says.
Training for the Future
Cities that lack ready-to-go work forces suited to a particular industry are using federal and state funds to create clusters.
"Employers now have access to training programs and funds for new job openings," Canup says. "Federal stimulus money funds from the American Recovery and Reinvestment Act (ARRA) are providing employee education in selected fields that demonstrate job growth. Many states continue to fund their state training programs for new and expanding industries, which help give the unemployed skill sets for new jobs."
These ARRA dollars fund training programs that teach unemployed workers the skills they need to work in specific industries, especially advanced manufacturing and green technologies.
Georgia's ARRA-funded Be Work Ready program is one of the most active, and upgrades the skills of unemployed workers to help them gain a competitive marketplace advantage. When a percentage of workers in a community or county have been trained, the area can achieve Work Ready certification and, with the help of the Georgia State Workforce Investment Board, can market its available work force as an incentive to prospective industries, especially Georgia's fast-growing aerospace, advanced communications, advanced manufacturing, bioscience, energy, and logistics industries.
Back in California, the economy is increasingly dependent on green technology. Strong job growth is expected in industries such as renewable energy, energy efficiency, and recycling. State and local governments are working with the private sector to transition workers to green jobs. Nearly $100 million in ARRA funds and state, local, and private aid is available to help teach Californians green job skills. Community colleges and the Clean Energy Workforce Training Program (CEWTP) are also striving to make California a green technology leader by providing the skilled workers these companies need.
In northern California, where natural resources industries have been declining for years, more than 4,000 timber industry workers are currently unemployed. Audrey Taylor, president of Chabin Concepts, a economic development consulting firm in Chico, is working with state and local governments to train and place unemployed workers in renewable-energy installation and green building jobs.
"These people have special skills in milling and advanced manufacturing that can be easily transferred to building green products and renewable energy equipment," Taylor says.
California is poised to become a hotbed for green industries due to strict regulations that require the state to decrease its greenhouse gas emissions. "More than three-quarters of the goods that come into this country from overseas are transported through California," Taylor says. "This means that all these light- and heavy-duty trucks must be refitted with new fuel systems, a huge market that will require thousands of workers with specific skills."
According to Canup, "The number and quality of experienced people available for work is unprecedented." Considering the increasing signs of economic recovery, "Companies that have been considering new investments should seriously consider moving forward with their plans. Employers opening or expanding operations will find a large pool of available, talented, and experienced workers. Combine this with the shrinking value of the dollar and the reduced cost of construction in the United States, and companies will find an attractive expansion opportunity."