This article is the first in a series of blog posts intended to provide insights into the ways labor market data can benefit economic development professionals and the communities they serve. To learn about EMSI’s new software for economic developers, click here.
For economic development professionals, the stakes are high when demonstrating workforce availability. In fact, according to the 2014 Area Development survey of company executives, the availability of skilled labor has rapidly become the No. 1 factor in site decisions (labor costs are No. 3).
Even in cases where workforce availability is not the most important factor, it is still enough to sway decision-makers. Take it from Melanie Moore, senior director of business intelligence at JAXUSA Partnership (the economic development arm of the Jacksonville, Florida, chamber of commerce). Last year, workforce data served an integral role in bringing a new GE Oil & Gas plant to Jacksonville, adding 500 jobs and up to $91 million in capital investments to the regional economy (click here to read the case study). Moore emphasized, “It doesn’t matter if you have free land, free buildings, etc., if you don’t have the people to work in the jobs, there’s no point in [a business] coming.”
That’s why the ability to indisputably demonstrate the strengths and compatibility of your local workforce at the detailed occupation level (especially in contrast to a competing region or to national averages) can be extremely persuasive tool for attraction.
To demonstrate the power of this data, let’s run through an example. Say an engineering services company is interested in Virginia Beach, Virginia, and they want to know more about electrical engineers and electrical engineering technicians in the area. What data points should local economic developers consider as they pitch their local workforce? A solid starting point would be to quickly analyze those occupations for workforce size, earnings, concentration, education completions, and demographics.
“It doesn’t matter if you have free land, free buildings, etc., if you don’t have the people to work in the jobs, there’s no point in [a business] coming.”—Melanie Moore, JAXUSA Partnership
The size of the regional workforce is one of the most important data points to share with prospects. Do you have the workforce required to fill the jobs? A close look at specific occupations can deepen a business’s knowledge of your local workforce, pique its interest about your community, and open the conversation to a more in-depth discussion of compatibility.
For example, let’s take a look at the size of the electrical engineer and electrical engineering technician workforce in the Virginia Beach metro. There are over 1,500 electrical engineers, and over 1,800 electrical engineering technicians—a healthy job count for a metro of its size. However, both occupations have declined slightly over the last five years, losing less than 100 jobs each. How should economic developers read slight declines in the workforce?
It’s easy to assume that decline is bad, but that’s not always true. Businesses are often interested in the unemployed workforce because these workers can be hired quickly at a typically low wage. So, depending on the circumstances, slight decline could be a selling point. However, economic developers must determine if the decline is linked to a similar industry, or some other reason (overall regional decline, for instance).
In the case of Virginia Beach, this decline closely resembles what has gone on in the rest of the nation, and growth is expected in the near future—so it shouldn’t be alarming.
Job Growth for Electrical Engineers
High operating costs are often a deciding factor for why a company moves, and cost can certainly prevent a company’s expansion. If you can show with labor market data that wages in your region are lower than what a company is currently paying elsewhere (or lower than in a competing region), you’ll grab the attention of site selectors. Comparisons to national averages are also helpful.
In Virginia Beach, for example, labor market data shows that the median hourly wage for electrical engineers is a bargain at $37.04 per hour ($5.81 per hour less than the national average and well below median wages in nearby metros like Richmond or Raleigh).
However, electrical engineering technicians in Virginia Beach make over a dollar per hour above the national average. Combined, these wages still make for overall cheap labor—so it might be better for economic developers to present the data that way. It’d also be worth it to compare these wages to a competing region, or to the region where the business is currently located.
Concentration (or location quotient) is a ratio that compares a region to a larger reference region according to some characteristic or asset. For example, by quantifying how concentrated a particular industry, cluster, or occupation is in your region as compared to the nation, you can reveal that a business is uniquely suited to your area based on a high concentration of similar firms. If you’re pursuing a company who fits into your cluster strategy, this figure should be especially strong.
The concentration of electrical engineers and electrical engineering technicians is high in Virginia Beach; together, these occupations are about 1.84 times more concentrated than they are in the nation. When we analyze these occupations separately, we find that technicians are especially highly concentrated in this area; the job concentration is 2.21 times greater than the national average. This data will be especially valuable, if the prospective engineering company typically has a difficult time filling these positions.
Regional completions data provides additional insight into the available workforce in your region and its ongoing potential. In addition to providing a general overview of degree and certificate completions trends, you can show completions by award level or by institution, which provides intel into the level of expertise among your potential workforce.
Completions data is one area where Virginia Beach really shines. Together, there were 509 completions in 2013 for electrical engineers and electrical engineering technicians, indicating that there are a substantial number of graduates entering the workforce.
Occupational Program Completions for Electrical Engineers and Electrical Engineering Technicians
(Virginia Beach-Norfolk-Newport News, VA-NC MSA)
|Program Description||Completions (2009)||Completions (2010)||Completions (2011)||Completions (2012)||Completions (2013)|
|Computer Technology/Computer Systems Technology||250||0||263||488||363|
|Electrical and Electronics Engineering||51||61||41||52||73|
|Electrical, Electronic and Communications Engineering Technology/Technician||32||288||187||66||63|
|Computer Engineering Technology/Technician||14||5||4||11||6|
|Engineering Technology, General||3||13||4||3||4|
|Electrical and Electronic Engineering Technologies/Technicians, Other||0||0||0||0||0|
Information about the gender, age, and ethnic/racial distribution of your workforce can be extremely influential for certain businesses.
If your workforce is young, that’s a major draw because prospective businesses will not have to worry about replacing countless retiring employees. Less likely to be vested into retirement plans or juggling responsibilities, younger workers are also often more flexible and eager to take on new opportunities. In addition, certain industries highly value a diverse workforce and may be greatly persuaded by data on gender and ethnicity.
Demographics data for electrical engineers and electrical engineering technicians in Virginia Beach are on point or slightly more diverse than state and national averages. It might also be worth it to compare demographics with competing regions.
EMSI Developer is the latest in the line of data software provided by EMSI. Designed specifically for economic developers, it offers tools for strategic planning, recruitment, workforce analytics, and a regional dashboard—along with national data at the county and ZIP code levels. For more information, click here. Or, to schedule a demo, please contact us.