Labor cost is often a top criterion for a location — but wages alone don’t tell the full story of a location. Neither do incentives. For long-term success, what is a community doing to build a pipeline of qualified labor? What is the community doing to create a foundation for the skill sets you might need in 10 or 20 years? For a well-rounded analysis, you need to look at primary and secondary information.
Primary sources include the individual conversations you should be having with economic development organizations (EDOs) and community development sources. One-on-one or small-group interviews can reveal a deeper story about a community that numbers alone don’t reveal — and can tip your select-deselect decision. Secondary data sources include the U.S. Census or state government databases.
Data and the story behind the numbers make a difference. The following are five often-overlooked clues to a market’s true labor pool potential:
- Untapped, nontraditional labor supply. In a less active market, you may find an underutilized labor force — and a lot less competition from other employers. Ask your EDOs for data about workers on the sidelines and how they could be upskilled.
- Middle and high schools. We’re not suggesting a company employ seventh graders. But is the community investing in workforce development? For example, do schools offer robotics, engineering or other technical clubs and externships to de-stigmatize manufacturing work? Also, some communities are hosting bootcamp-style programs to introduce potential workers to maintenance engineering and technical associate fields without having to commit to a lengthy, costlier program.
Dig into how the EDOs collaborate with the technical and community institutions. What success stories and outcomes can EDOs brag about — especially for the programs most relevant to your workforce needs today and tomorrow? What have they accomplished for similar enterprises? Unlocking these answers is key to supporting your future workforce. …there are skills and machinery that are probably going to be in full use in two, three years that we don't even know about at this point. As a result, it's important that companies have a flexible and trainable workforce, but also a community that's able to support the ongoing training needs of advanced manufacturing operations.
- Pubs and art galleries. The conventional view is “get the jobs and the people will follow.” However, some communities are trying a new approach, creating a quality of life that will attract talent and employers alike. Lifestyle amenities, like breweries, coffee shops, and good food, are becoming as important as broadband access.
Big cities have rich arts, cultural, and lifestyle offerings, but real estate costs are usually very high, too. Cities like Tulsa, Okla.; Greensboro, N.C.; and other mid-sized towns offer lower-cost housing and labor than the big cities, as well as the hip lifestyle options. In some communities, you may even be able to recruit talent from a distant higher-education institution even if it doesn’t have a local campus.
- Follow the policy wonks. State and community policies and governance are sometimes overlooked in the site selection process. Yet, politics and policy can affect the long-term success of your company. If your company values a diverse workforce, for example, you’ll be more successful in a community aligned with your goals rather than one seeking to limit residents’ participation in society and the economy.
Also, pay attention to teacher strikes and pension liabilities. These issues relate to a state or community’s bond ratings and ability to govern. Well-governed states have more resources for workforce training and a better environment for long-term corporate growth.
- Look where growth isn’t obvious. Site selectors typically favor growing communities. Yet, a community may warrant a second look even if it isn’t growing. Growth presents issues like traffic congestion and skyrocketing housing costs. A less popular location might offer more favorable housing costs and a higher quality of life for workers.
Editor's Note: Area Development’s Indianapolis Consultants Forum featured a presentation on strategies to grow (and market) your new economy workforce by Chris Schwinden, Vice President, Site Selection Group. The preceding were some key ideas from Schwinden’s presentation and subsequent sit-down interview as compiled by Jennifer Harris, Area Development contributor, Akrete, Inc.