In his book, When the Boomers Bail, Mark Lautman diagnosed what separates Winnerville from Loserville, two hypothetical communities that take vastly different approaches to economic development and talent attraction.
It’s been six years since Lautman wrote his book, but his message still largely rings true: The war for skilled labor, what he sees as a zero-sum game, has intensified. A few regions are winning. Many others are losing.
To determine the communities where talent is congregating, we launched the Talent Attraction Scorecard last summer, a report that ranked large and small U.S. counties on how well they’re attracting and retaining skilled workers. With the help of some of the top researchers in the economic development field, we established five quantitative components to form our analysis.
We are thrilled to unveil the 2017 edition of the scorecard, this time with a slightly refined methodology. We’ve kept the same five core metrics, but we’ve expanded net migration to include two time frames, 2011-2015 and 2014-2015, to give a broader view of people’s county-to-county movement and added the 2012-2016 percentage change in the adult population with at least an associate degree to show counties with an increasing share of college-educated residents.
Also new this year is a supplementary analysis to show the top cities that are retaining their graduates and the skills embedded in their communities. We also look in the report at the strategies that communities can consider as they’re building out short- and long-term talent pipeline approaches.
The top two large counties (pop. 100K and above) in this year’s scorecard are new. Maricopa County (Phoenix) supplanted Travis County (Austin) as No. 1 after ranking sixth last year. And Clark County (Las Vegas) rose to No. 2 from No. 8, thanks to attracting the most net new migrants from 2014-2015—over 9,000, a few hundred more than Maricopa County.
Maricopa and Clark counties are joined in the top five by San Francisco County, Lee County (Cape Coral-Fort Myers, Florida), and King County (Seattle).
For the second year in a row, Cameron Parish, Louisiana, is the top small county (pop. 5K-99K). Fueled by an industrial construction boom, Cameron Parish registered an index score almost three times higher than Maricopa County, the No. 1 large county.
Here are three prominent talent attraction story lines from the scorecard (download here):
1. The South, West Coast, and Texas Are Attracting and Retaining Talent in Droves
Scroll through the top 50 of our large county ranking, and you’ll find a striking theme: Every county except for No. 50 (Hamilton County, Indiana) is either in the South, West, or Texas. Expand to the top 100, and the same theme applies.
- Only eight of the 100 best are outside the South, West, and Texas. Four of these are in the Rust Belt (Hamilton in Indiana, Franklin and Warren in Ohio, and Kent in Michigan), while only one is in the Northeast (Kings County, New York).
- Florida has 14 of the top 50 large counties and almost a quarter (23) of the top 100.
- Other southern counties rank well, too. In North Carolina, Mecklenburg County (Charlotte) is No. 7 and Wake County (Raleigh) is No. 15. In Tennessee, Williamson County shows up in the top 25 for the second straight year and neighboring Davidson County (Nashville) shot up 232 spots from last year to No. 58. In Georgia, Fulton County (Atlanta) rose to No. 25 after sitting outside the top 100 and Forsyth County ranks No. 34.
- Texas has 14 of the top 100 large counties, led by Harris County (Houston) at No. 8. However, its top three counties—Harris, Travis, and Collin—all slid down the rankings. Travis County, the No. 1 county last year, fell to 10th after reigning at the top a year ago. The reason for its dip: a downturn in net migration after years of big growth.
- California has eight of the top 100 large counties. San Francisco County (No. 3) is followed by Riverside County (No. 12) and Alameda County (Oakland, No. 22). Santa Clara County (San Jose, No. 31) fell from No. 4 a year ago because of a slowdown in total and skilled job growth and further decline in net migration.
- The West is also represented by five Colorado counties in the top 50—led by Denver County, at No. 9—as well as Multnomah County (Portland) at No. 24, Deschutes County (Bend, Oregon) at No. 32, Salt Lake County (No. 38), Washington County, Oregon (Hillsboro and Beaverton, No. 42), and Gallatin County, Montana (Bozeman, No. 46). Ada County, Idaho (Boise, No. 56) also ranks in the top 75 for the second straight year.
2. Biggest Cities Rank At Bottom
America’s three largest cities are represented at the bottom of the scorecard. Cook County (Chicago) ranks last out of 595 large counties. It’s closely followed by New York County (Manhattan), with Los Angeles County, Miami-Dade County, and Fairfax County (part of the Washington, D.C. metro) rounding out the bottom five.
These bottom-ranked counties have all experienced massive out migration in recent years, the primary factor for their poor performance. However, there are two things to note on migration in large cities and populous counties in our index:
- Large port-of-entry cities like New York, Miami, and LA have historically had the most international migration, which has offset or softened the blow of their negative domestic migration. As William Frey wrote for the Brookings Institution, “In any given year, more immigrants are drawn to different ‘magnet areas’ than domestic migrants. … At the same time, domestic migrants—those making moves within the U.S.—tend to follow jobs more directly, often in growing parts of the Sun Belt.”
- Because our index considers percentage job growth and skilled job growth, counties with fast-growing labor markets fare better than counties with a large numeric increase but smaller percentage gains (see Los Angeles, Cook, and Miami-Dade). That said, we do include total net migration (2014-2015 and 2011-2015) and raw competitive effect (the total number of jobs added due to regional competitiveness versus national factors) to ensure we are combining growth and raw-change metrics. In addition, four of the highest-populated counties (Harris, Maricopa, King, and Clark) rank in the top 15 of our ranking.
3. Houston, Dallas, Seattle Lead Way in College Graduate Retention
A key part of talent development is retention—namely retaining young talent that local colleges are producing. In a separate ranking to the Talent Attraction Scorecard, we used Emsi’s online alumni database (which pulls from dozens of social media sources) to look at college grad retention for the 200 most populous metros.
The Houston MSA retains the highest share of graduates from local institutions, a whopping 67%—just ahead of Dallas (66%), Seattle (63%), and Atlanta and Chicago (both 61%). Each of these top cities ranks highly in our scorecard except for Chicago.
St. Louis has lowest retention among large MSAs (17%). Baltimore (21%), Bridgeport (22%), San Jose (26%), and Honolulu (27%) also rank low, along with many college towns.
What Are the Top Communities Doing Right?
In the report, we make the case that talent attraction is more important—and tougher—than ever. In addition to the problems that Lautman lays out in his book to argue why full employment will be devastating—including baby boomers not having enough kids and the failings of the educational system—communities that want to grow their skilled talent base face other challenges.
Most notably, Americans are moving at an all-time low rate. In his book, The Complacent Class, economist Tyler Cowen points to increased state-by-state occupational licensing and the growing similarities in regional economies as two of several reasons why interstate migration has fallen 51% below its 1948-1971 average—a stunning statistic. Millennials, too, are not moving as much as young people from previous generations.
Decreased mobility is a key signal that dynamism is in retreat, to use the Economic Innovation Group’s description. Add to this the talent crunch that many regions with unemployment below 3% are already feeling and this means communities will have to be more creative to find and recruit the workers that businesses need to grow.
All of this raises the question: Why are some communities growing their skilled talent bases and economies while others flounder?
Part of the answer lies in the local leadership in these communities. Part of it lies in the quality of life that they have fostered. Cost of living, housing, and quality of K-12 education are other big factors in attracting and retaining innovative companies and the bright talent that fuel their growth.
New York Times columnist Thomas Friedman, in a column last month, pinpointed another key determinant of success for communities: “They’ve created diverse adaptive coalitions, where local businesses get deeply involved in the school system, translating in real time the skills being demanded by the global economy. They also tap local colleges for talent and innovations that can diversify their economies and nurture unique local assets that won’t go away.”
Communities at the top of our scorecard have been leveraging these partnerships between local educational institutions, companies, and community organizations to supply businesses with top talent. We can see this in places like Houston (with its 67% college graduate retention) and Fort Bend County, part of Houston metropolitan area (where associate-and-above degree attainment rose 22% and jobs grew 20% from 2012-2016). The same goes for Seattle and Atlanta and Dallas and smaller metros such as Boise.
It’s these pockets of the country that are winning the war for skilled talent.