Workforce and human capital can be considered the most important factor in corporate location selection. A great location cannot be great without the people available to work and run your company.
While there are many different factors that need to be considered when it comes to workforce, the three major categories include hiring the initial workforce, keeping and sustaining the workforce in the future and cost. Being able to analyze these key factors when selecting a location is critical to making the right location decision.
In this breakout session at the 2016 SSG Fall Forum, Guild members and leaders Jay Garner, Keith Gendreau, Lawrence Morretti, John Sission and Rajeev Thakur discussed ways EDOs and IPAs can analyze the workforce in their community, some of the challenges and shortfall trends that are affecting the current labor market, and what communities can do to make their labor and workforce more attractive to potential new businesses.
Analyzing the Workforce
There are several effective ways that companies and site selectors can approach evaluating the workforce in a given market. One way is to find out about labor through interviews with similar industries in the area and meetings with training facilities and universities. These meetings can provide great insight into the current state of the labor market in the community. EDO partners can step in and help facilitate and set up these meetings.
Another tool that can help garner important information about the workforce in a region is O*Net Online, the occupational network database published by the U.S. Department of Labor. O*Net contains information on hundreds of occupations and their skillsets. Additionally, this tool allows you to analyze the transferability of skills for each industry and can quantify the number of people who have this skillset.
For example, if there is a large population of unemployed oil and gas workers, O*Net can tell you the number of unemployed workers as well as what skills they have that could transfer to a different industry.
While Site Selectors have access to information that companies don’t have, it is important to note that site selectors and companies also reply on EDOs and utilities to provide them with workforce information they may not have or cannot access.
Trends Affecting Workforce
There are several major factors that are impacting the availability of skilled workers in each market.
The first is evolving federal policy on immigration. There are a limited number of visas available for foreign workers in the United States each year and once they are gone, there isn’t a system in place to allow additional workers into the country. Other countries are actively hiring foreign workers to improve their business and economy, while the U.S. is limiting the numbers of highly skilled foreign workers who can enter the country. There is no integration of thought in the U.S. surrounding getting the right people into the country and it is important to realize that every industrialization era we have had in the U.S. in the past involved people coming into the country to work.
An additional trend that is troubling to site selectors and the availability of workforce is the lack of skilled, professional laborers. This is especially true as more and more Baby Boomers retire. There are major skills gaps starting to form and increase in size, especially in skilled crafts and semi-skilled crafts such as tool and die making, precision machining and machine repair and maintenance.
All of these skills are important for manufacturing and attracting manufacturing to your area – and while advanced machining is becoming more automated and therefore requiring less labor, complex machines will always need repairing with craft skills. Automation as long as it is working requires no skills, but as soon as it breaks, it requires highly sophisticated repair workers.
What can we do to become more attractive?
While many communities are facing the same issues when it comes to workforce, there are some things that communities can do to be more attractive to potential new businesses.
The first is creating strong partnerships with education providers in the area. This starts in middle schools with a career pathways program and in high schools where students should be encouraged and motivated to work in manufacturing jobs. It is important to realize that many of these skilled craftsman jobs, with the proper training, can start kids straight out of high school into family supporting wages around $70,000 per year.
It is also important to look at higher education in your area to make sure that technical schools and colleges are offering the right types of classes to prepare workers for the businesses you are trying to attract. If you are trying to create or already have created a cluster of industry, get a school to support that center in the long run.
Another way to boost a region’s workforce is to create incentives for workers at the state and local levels. One of the key questions to answer is: are people willing to move to your community for work? If not, why? Creating incentives for workers to want to move to your area for work is a great way to beef up your workforce.
For more insights into workforce trends, issues and how to maximize your region’s attractiveness, consider attending an upcoming SSG Annual Conference, Fall Forum or Advisory Forum event. Visit our events website for more information.