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Ranked #3: Availability of Skilled Labor

The respondents to Area Development's Annual Corporate Survey ranked availability of skilled labor as the third-most-important site selection criterion, but how is this factor evaluated?

Dr. C. R. (Buzz) Canup, President, Canup & Associates, Inc.  (April/May 06)
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Visits and Interviews
Interviews and visitations are typically made to educational and training institutions located within the region. These visits may include vocational training centers, community colleges, and four-year universities. Inquiries are made relative to student enrollment, acceptance qualifications, attendance, graduation rates, and job placement numbers. Any information available relative to graduate follow-ups, employer interviews, and continuing educational activities is also collected and integrated into the labor analysis. To the extent the educational facilities may offer programs or courses specifically related to the skill or knowledge sets sought by the company, interviews will be conducted with the individuals who teach or administer the programs for direct feedback on the quality and performance of the students.
One of the best sources of information from both an applied and firsthand perspective comes from interviewing existing business and industry representatives. These interviews typically focus on the actual experience that existing companies have had since locating into the region. It is common to interview companies that have recently located into the region as well as companies that may have been in the region for five, 10, 15, or more years. A key focus of the interview is a discussion of the following critical factors:

• Labor availability - the ability to recruit specific types of individuals based on skill, knowledge, or experience requirements
• Labor trainability - the ability to train employment candidates in specific skill or knowledge sets related to company performance requirements
• Productivity - characteristics of the work force related to turnover, absenteeism, re-work, cost, and efficiency, both locally and compared to other company operations in other geographical locations
• Drugs in the workplace - results related to the use of pre-employment drug screening, random testing of employees, and discovery of drug paraphernalia on the company's property
• Training - use of local vocational training facilities, community colleges, or other training and educational facilities to assist in screening, training, and selecting a qualified work force (Similarly, the experience of the company in recruiting and training its own work force and the trainability of employment candidates should be evaluated.)
• Commuting patterns - a review of the general commuting patterns and locations of origination for existing employees, including work schedule impact caused by congestion, accidents, and weather conditions

Narrowing the Focus Further
Companies that may require higher levels of technical skills or higher levels of a knowledge base within their work force will extend the labor analysis to focus on these specific requirements. These higher-level skill or knowledge-based jobs may include mechanics, technicians, engineers, technical operators, supervisors, or managers. Most of these types of skills are normally developed through extensive educational programs offered at postsecondary educational facilities. For most companies, however, these higher skill levels are only required within 15 to 20 percent of the work force, with the balance of employees capable of being trained in-house or through structured, short-term training programs.

In the final analysis, availability of skilled labor is only one element of a comprehensive labor evaluation. It is typically examined only for short-listed communities, but it certainly can become an overriding factor in a site location study if it is determined that the geographical region cannot support recruitment of a work force with the requisite skill or knowledge base requirements of the company.
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What is the importance of skilled labor in the growth of small and medium enterprises(SMEs)?
The importance of skilled labor in SMEs varies directly with the type of business the SME conducts. There are many small and medium sized companies that require very high levels of specific skill sets and/or knowledge sets to conduct their business. More
- Dr. C. R. (Buzz) Canup, President, Canup & Associates, Inc.

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