Solving the Site Selection Labor Crisis (Part 3): Turning Data Into Creative Solutions

This is Part 3 of a three-part series that examines how to find and leverage local labor data during the site selection process to help generate solutions during a labor shortage.

At a time when job openings for skilled labor positions hover near all-time record levels, U.S. companies are facing the unique challenges that come with labor shortages and skills gaps within certain workforces. Whether the culprit is Baby Boomer retirement, competitive wage issues, or inability to attract skilled workers to certain locations—or all of the above—we are experiencing a rare moment when the demand for labor is greater than the supply. And it has resulted in one of the most competitive labor markets in over a decade. 

In Part 1 of this series, we discussed the growing concern over available skilled labor in the U.S.—especially in this current era of economic expansion—and how critical workforce development is to successful site selection analysis. In Part 2, we offered ways to paint an accurate picture of local labor supply, labor cost, and general economic climate based on detailed labor market data that’s been gathered from the most credible sources available. 

Now, we look at how to generate answers to the current labor crisis. Finding innovative solutions to help resolve this dilemma requires accurate interpretations of real-time labor data combined with personal interviews with local business leadership. Communications with community leaders to develop local, out-of-the-box solutions will ultimately be a key factor in achieving long term success in your new location. 

How to Create Effective Labor Solutions
It can be easy to be drawn into what’s happening economically on a national scale, but it’s more imperative to have a keen understanding of the local labor dynamics of prospective communities as they correlate to the specific workforce needs of your company. When exploring locations for a new or expanded facility, it is important to examine the community’s track record of attracting, training, and retaining the most highly-suited workers.

Once you’ve settled on a short list of communities, you should perform an in-depth analysis of available workforce development programs. At this time, all labor markets are tight, but a key differentiator is how each community responds to the challenge. For example, ask the local economic development organizations about creative partnerships that they have created for other employers with educational institutions or military installations (e.g., tapping into local recruiting programs for active duty military that are separating from service).

Your review should include the following:

  • Be forward thinking. Don’t just look at today’s talent pool; be sure to ask the local community to prepare a pipeline of their labor force. A good analysis would reach into the high schools.
  • Partner with universities, community colleges and technical schools. Communications with local educational institutions will help to not only find the right talent, but to be part of the process to identify which skills the students need. Review the curriculum and ask if the training will provide students with skills that are in demand today and 5 years from today.
  • Think about ways to keep aging workforces relevant. Local post-secondary institutions can help provide continuous training for an aging workforce.
  • Join advisory boards for local schools (as your competitors likely will). This will help them understand what skills are necessary to suit certain industries. 
  • Play matchmaker. The efforts above can help to match potential employees with the specific skills your industry needs and could ultimately provide solutions to the skills gaps.
  • Look for one-stop solutions. Some state and local communities consolidate training, social services and mentorships into one resource with a single point of contact for the employer.
  • Don’t forget the basics. Some of the biggest obstacles to successful training are ensuring that the participants have basic social services (e.g., child care, food stamps, housing, healthcare and public transportation).
  • Inquire about the scope of services. Most communities will cover recruiting and training services, but the better communities offer programs to prepare the participants for the training by working in advance to clear licensing requirements, drug testing, and aptitude testing.
  • Request quantifiable results. There are lots of anecdotal stories about success, but the better programs quantify their results with not only the number of graduates from the program but increases in academic scores or competency tests as well.
  • Quality of life matters today. Take note of the amenities that a community has to offer. The millennial generation is concerned about public spaces, green amenities, recreational activities, walkable communities, as well as proximity, affordability and diversity of housing options.

Always Look Past the Data

This list shows that a thorough examination of a community’s demographic characteristics is increasingly important in the site selection process. Communities that might appear at first glance to have an abundance of workers could be at risk of suffering a workforce shortage in the years to come if they are unable to attract and retain the millennial cohort.

However, while data can provide critical insights in the availability of labor, data alone will not help a company identify the community that will best meet its workforce needs. Quantitative information must be complemented with insights that can only be gleaned from discussions with local officials, local businesses, and economic development professionals. The combination of both will lead to some of the most creative labor solutions possible.

As we have mentioned before, asking the right questions in relation to the information gathered is paramount to success. Sometimes, cutting-edge solutions to labor shortage can be uncovered with deep-diving questions:

  • You see that there is a local post-secondary institution that offers a compelling pipeline to employers. Ask: Do companies actually have a track record of harnessing this institution to support their unique needs?
  • You see that the state’s workforce website has high-praise testimonials from large global companies. Ask: Have smaller companies had the same experience?
  • You see that the local economic climate is strong. Ask: Are local companies expanding in the community or are they going elsewhere? Why?
  • Based on demographics, you want to know how to attract and retain all levels of workers. Ask:
    • Have companies had success with offering highly valuable, long-time workers bonus plans and/or benefits that fit their needs better?
    • Would less-tenured workers find additional training beneficial to building a longer career with the company? 
    • Would a more competitive wage help attract those just entering the workforce?

Delivering a skilled workforce during the site selection process requires a tightrope walk (often without a net) between the science of local data and the intuition of interviews with local personnel. The smart companies today are improving coordination with local colleges and universities, stumping for K-12 programs that aren’t singularly focused on college prep but are also devoted to more career-oriented vocational pursuits, and expanding access to workforce training. Accentuating initiatives like these can have a huge impact for companies looking to identify and invest in communities with the best workforce to suit their needs. It doesn’t have to be like finding a needle in a haystack if you know where (and how) to look in today’s extremely competitive labor market.

For help with your site selection analysis or insights into your workforce, contact the Duff & Phelps Site Selection and Incentives Advisory team.

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