For better or worse, business attraction—the fierce competition to recruit companies with sometimes large incentive packages—will probably always be part of economic development. But another type of attraction is growing in importance, and it revolves around a finite resource: skilled labor.
Talent attraction initiatives are popping up across the country as communities, regions, and states realize that without skilled talent, their businesses and economies can’t fully prosper.
This is why we produced The Talent Attraction Scorecard, a new report that delves into how well counties large and small are attracting and developing skilled workers.
The scorecard is based on an index that use five metrics to rank how every county has done drawing new residents, growing their skilled and overall workforces, and grabbing a greater share of skilled workers than other regions. As a complement to this analysis, we separately ranked counties based on how they are attracting young talent by looking at the growth in college enrollment and millennial population per capita. Lastly, we used cost-of-living-adjusted earnings to help explain why talent is (or is not) moving to these counties.
The following are just a few main takeaways from our research:
Travis County, Texas (Austin) Blows Away Field
The big reason why Travis County is overwhelmingly No. 1? Just look at its net migration numbers. It also doesn’t hurt that Travis County has done well in skilled job growth and gained a large share of skilled workers compared to other counties.
Another coup for Austin: Compared to other tech hubs, cost of living is remarkably low in Travis County. Wages adjusted for cost of living ($21.61 per hour) are nearly the same as unadjusted median earnings ($22.26).
Not Just City-Core Counties Attracting Skilled Talent
In some well-known metros, suburban counties did better in our ranking than the counties where the main city in that metro is located. A few examples:
- Collin County (No. 7) includes McKinney and other Dallas suburbs; it did better Dallas County (No. 24).
- Adams County, Colorado (No. 13) borders Denver County (No. 15)—and outranks it.
- Williamson County, Tennessee (No. 22), eclipses neighboring Davidson County (Nashville, No. 290) by a long margin thanks to much higher marks in skilled job growth and net migration.
Young Talent Growth Happening Outside Top Talent Regions
The counties attracting skilled talent aren’t always the same as the ones attracting millennials and young potential talent. In fact, based on a separate index we composed that equally weights per-capita college enrollment growth and per-capita 25- to 34-year-old population growth, young people aren’t flocking to the same counties as skilled workers.
Which counties are at the top? Mostly counties outside big metros. Houston County, Georgia, and Carroll County, Maryland, are the top two, while Anchorage Borough, Alaska, and Centre County, Pennsylvania (home to Penn State University), are also in the top 10.
The bottom for young talent, surprisingly, was Utah County, Utah (Provo-Orem). Both it and Cache County, Utah, the second-worst among large counties, saw major enrollment and millennial population decline.
Note: We excluded distance learners when looking at college enrollment data from the National Center for Education Statistics.
Cost of Living is Mostly Reasonable in Top Counties Skilled Talent …
… and it’s mostly expensive in the bottom counties.
For the bulk of the top counties in our primary talent attraction index, cost-of-living adjusted wages are similar to unadjusted wages. In fact, among the top 25 large counties, adjusted wages make up 88% of unadjusted median wages in all but nine counties. For the exceptions, like San Francisco and Santa Clara counties, there are well-known companies and job opportunities that are attracting skilled talent despite how expensive it is to live in these counties. (And even then, net migration was negative or low in every Bay Area county except for Alameda, Contra Costa, and a couple of others.)
For the bottom 10 large counties, cost-of-living adjusted wages are higher—in some cases, much higher—than unadjusted wages across the board. The extreme example is New York County, where adjusted median wages represent just 41% of unadjusted wages (see chart).
Why Talent Attraction Matters
Economic development is changing. It’s not just about job creation. It’s about the quality of jobs you are helping bring to your region. It’s also about expanding opportunity (and incomes) in your community.
Not only are the metrics changing, the nature of economic development is also at least starting to tilt more toward business retention and expansion. The Center on Budget and Policy Priorities, in an analysis of the NETS database, showed that 80% of job creation in every state comes from expansions of existing businesses and startups.
CBPP notes in its study that economic development organizations should focus more on cultivating a skilled workforce and improving quality of life in their regions and less on using tax cuts and subsidies to attract businesses. In many communities, this shift is already happening. Mary Ellen Wiederwohl, chief of Louisville Forward, summed it well in an article for Brookings: “… economic development today is as much or more about talent attraction, place-making, innovation, and global engagement as it is about company recruitment.”