United States: Solving The Site Selection Labor Crisis (Part 2): You've Gathered All Your Data – Now What?

Last Updated: November 2 2018
Article by Gregory Burkart

This is Part 2 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.

The health and vibrancy of the U.S. economy hinges on the quality of its talent pool. Finding access to this talent is one thing; digging a direct pipeline to labor that has the specific, critical skills your company requires is quite another. A disciplined approach to evaluating the local labor market can be the deciding factor as to whether you ultimately experience growth in a certain community, or whether your business falters due to high turnover and the expense of recruiting from outside the local labor force.

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. We know that a thorough, detailed survey of labor data will be a top priority in every type of facility search, and how important it is to identify communities that are going to be attractive to the highly coveted 20- to 35-year old cohorts that possess the most valuable skills.

As the United States continues to be more and more attractive to global companies looking for a prime location to establish new facilities, it's the successful companies that will take a detailed, novel approach to their labor analytics. Yes, labor availability is the first step, but finding labor that meets specific classification requirements is imperative. Concentrating on forward-looking indicators is key to establishing operations that will last for the long term.

Using Data to Tell the Story of Local Labor

Detailed labor market data from the most credible sources available helps paint an accurate picture of labor supply, labor cost, and economic climate. With the proliferation of data, there is a demand for local insight into what it represents. That is: What's the story behind the raw data? At the risk of answering a question with another question, the best way to discover the true story is through deeper questioning. As you survey the data you've gathered, first start with a high-level perspective:

  • Does the data show that there is enough labor with the skills you need in this location now, and for the future of your company?
  • Will you have a continual flow of access to this labor, or could local competition increase and detrimentally change the nature of the labor pool?

If the answers to these initial questions give you the green light to take the next steps, then dig deeper with a series of targeted questions:

  • How many students leave the community upon graduation, and why?
  • How long does it take them to return?
  • How do you keep track of departing students?
  • What is the true commuting area that current employers draw from?
  • How does that compare to your commonly defined region?
  • What percentage comes from adjacent regions?
  • Are average wages really reflecting what your current employers are hiring for right now?
  • Are current educational attainment rates reflecting those of the working age population?
  • How many third-party contracting firms are in your market and supporting other businesses?
  • Are they having success or difficulty attracting various types and levels talent to your market?
  • Why is it taking so long for job postings to fill?
  • Why are there so many unemployed positions? Has there been a recent lay-off?

Working with the local community to derive satisfactory answers that make common sense can help increase the chances of a successful site selection. They are a healthy start to a comprehensive study of the local established labor pool, based on several intertwined cultural components and the data therein. And, in turn, they can lead to the answers that will help make the final decision.

Enhance Data Discovery with Personal Knowledge

In golf, it's a generally accepted rule-of-thumb that having "local knowledge" of a golf course (i.e., having played it several times) offers a distinct advantage in competition over those who don't have it. You can perform all the data analysis you want by looking at a scorecard, but there's no substitute for walking the course. That rule could easily be applied to developing a true representation of a local labor market. That's why, if possible, it would be advantageous to enhance your data-driven analysis of labor by conducting personal interviews with local executives of like employers. You need to walk the course. By adding the human element of life experience, you will be able to glean certain subtleties not found in the data, such as a gauge of the competition for labor supply among employers.

Interviews like these are invaluable at both broadening the scope of labor issues within a community (not evident in the data) while narrowing the focus to your company-specific requirements.

Some of the important characteristics of local labor that can be revealed include:

  • Geographic aspects: Where are the workers living, and what are their commuting patterns?
  • Recruiting and retaining talent: What is the best resource for recruiting talent, and how long does it take to fill open positions?
  • Loyalty: How long do workers stay in their jobs? Is there any resistance to the community? Why?
  • Skills gaps: What types of skills are you seeking versus what types of skills do the new hires have on day one?
  • Temp agencies: Are there good third-party sources for temporary or part-time workers? If you like their associates, are you able to hire from these agencies?

As employment continues to trend upward rapidly for some industries in spite of labor shortages, navigating the complexities of finding specialized labor force becomes integral to the success of site selection. Finding talent that suits your company's needs—for the long term—will most certainly require a deeper dive into the data around local populations and labor potential. The days of simply choosing a site with the cheapest labor available have given way to a new era of data investigation into things like current and future labor availability, job classification requirements, and net migration and population growth, as well as education and training strength, cultural amenities, and commuter patterns. We now know that short-term perspectives without the proper analysis can lead to disruptive turnover, hiring, and productivity issues. Accurate data, along with first-hand accounts from personal visits, will help validate your site selection decision.

Look for our next and final installment in this series, "Solving the Site Selection Labor Crisis (Part 3): Turning Data Into Creative Solutions". We will discuss the next steps after you've established your short list of finalist communities and how to identify areas that respond best to the challenge of skilled labor shortage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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