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Critical Site Selection Factor #5: Availability of Skilled Labor Always a Top Priority

Matching skills with employer needs is critical to the location decision.

Q4 2015
This series examines the top-10 location factors from Area Development’s Q1/2015 Corporate Survey that determine where our readers will locate and/or expand their facilities. Highway access is their primary concern, followed by occupancy and construction costs. Our readers are also looking for available land and available buildings. Find out what else companies like yours should consider when making your next location/expansion decision.

Almost every economic developer or site selector will say that skilled labor availability is one of the top factors in any location decision. As more baby-boomers retire, finding enough qualified workers will become an increasing challenge a big concern for employers who must fill vacated positions as well as new ones. This situation is both a challenge and opportunity for economic developers attempting to make their regions stand out relative to labor availability, says consultant Scott Kupperman of Kupperman Location Solutions in Lake Forest, Illinois.

Availability of skilled labor is especially critical for manufacturing companies. A new report by Deloitte and the Manufacturing Institute The Skills Gap in U.S. Manufacturing: 2015 and Beyond indicates the gap is widening. According to the report, nearly 3.5 million manufacturing jobs will be created over the next 10 years yet two million of them will go unfilled.

To meet employer needs for skilled workers, many states have established workforce development programs that help companies recruit, screen, train, and hire employees typically at no cost to the company. Scott Kupperman of Kupperman Location Solutions in Lake Forest, Illinois The report notes that the two major factors contributing to the gap are baby-boomer retirements and the need for more workers as a result of natural business growth. Other factors include less interest by high-school students in manufacturing careers and a gradual decline of technical education programs in public high schools. The best way to deal with the shortage of qualified workers is by drilling down into workforce data to identify regions with the best potential to meet a company’s workforce needs. For example, the distance workers are willing to commute continues to play a critical role in evaluating a location from a labor perspective. The analysis of commuting patterns and times can help define the labor-shed proximity to a particular location.

Workforce Development Programs
To meet employer needs for skilled workers, many states have established workforce development programs that help companies recruit, screen, train, and hire employees typically at no cost to the company. The programs that are most highly rated by employers move workers through training programs quickly, focus on relatively few target industries, and are based on stable, long-term programs and initiatives that only increase in size and scale when demand and financing are assured, says Kupperman.

States with highly acclaimed workforce development programs include Georgia, Alabama, South Carolina, and Louisiana. Georgia’s Quick Start program delivers comprehensive training through the states technical college system. For example, in 2014 Hyundai DYMOS LLC announced plans to build a manufacturing plant in West Point, Georgia, creating 350 new jobs. The company partnered with Quick Start and West Georgia Technical College to develop a customized training program based on company-specific requirements. During construction of the new facility, Quick Start designed and built a simulated conveyor system and production line at its LaGrange training facility to start training new employees.

While many economic developers likely wish for a magic wand that would create skilled labor at a moments notice, the reality is that there is little, if anything, that can be done to change the dynamics of a workforce in a short period, concludes Kupperman. The opportunity lies in digging deeper into workforce data and creating awareness of programs that exist to provide training and match available skills with employer needs.

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