SB&D's Ten Top 10s 2006

Ten Places in the South with Plenty of Talented Labor

Nationwide, the demand for talented workers is reaching new heights as employers look to an ever-shrinking labor pool. A location in one of these southern markets will help you fill your vacancies during your next expansion.

By Trisha Ostrowski and Jennifer LeClaire

For years we've taken it for granted that companies could find enough skilled workers to fill new jobs. Today that's no longer “a given.” Instead, aging workers and retiring baby boomers are beginning to cause skilled worker shortages at the national level.

Workforce trends reveal that the problem is not going away anytime soon. Virtually every industry at every level will be affected by the ability to find (or not find) workers.

One of the South's hottest areas for business growth, Texas' Lower Rio Grande Valley, recognized this trend after it saw workforce move to the top of the list for many of its corporate prospects.

“We deal with 20 or 30 companies a month that are in search of the right location. Over the last several years, we've started noticing a trend. In the past, we saw companies looking to move to reduce operating costs. Recently, in the last three or four years, about half are moving for cost reduction and the other half are moving because they can't find enough labor where they are currently located to support their growth,” said Keith Patridge president and chief executive officer of McAllen Economic Development Corp. “These companies are faced with a clear option—either turn away business or move to where they can find talented workers.”

To make sure that the area was ready with plenty of talented labor, the Lower Rio Grande Valley Workforce Development Board initiated a visionary industry cluster analysis with Austin-based economic development consultant Tom Stellman, president and CEO of TIP Strategies, Inc.

Part of the study looked at national trends in the years 1945 through 2005 to determine how many jobs were created in the U.S. each year, a number that averaged out to 1.6 million net new jobs annually. The study then looked at U.S. Census Bureau and Department of Labor projections for the number of new entrants into the job markets for years 2005 through 2045. When the number of people between the ages of 18 and 64 who are entering the job market is overlaid next to the estimated 1.6 million new jobs created per year, the national workforce shortages become apparent.

For example, 2005 figures show 2.5 million new entrants for 1.6 million new jobs, but that number has been slowly declining for the last few years. In fact, in 2011, when baby boomers move into retirement in mass, the number of new entrants to the job market will drop to only 750,000. The number continues to decline up to 2025 when only 350,000 new workers are predicted to enter the job market. The number of workers for the number of new jobs does not come back to parity until 2037. The figures reveal that for real period of time, the U.S. will have a very tight labor market.

“When we meet with companies to do projects, 9 out of 10 times their biggest business issue is talent. Companies are recognizing that the biggest challenge they face is attracting and retaining the right people,” Stellman said. “Site selection is no longer only about traditional business climate issues like the cost of a building near an interstate. Workforce concerns are becoming exceedingly important.”

While some areas of the country will continue to experience labor shortages, many areas of the South will have a leg up when it comes to having plenty of talented labor. The South's swelling population, driven by quality of life, gives it an advantage when it comes to worker availability.

Since the “talent” issue is moving to the forefront in so many site selection decisions, SB&D has gone in search of 10 markets in the South that will provide plenty of talented labor both now and for the future. Some of these markets have an exceptionally young workforce with a high birthrate, others have large military presence with huge numbers of men and women re-entering the civilian workforce, and still others have experienced a recent flurry of economic activity causing a population boom.

If workforce is important to your company, and the trends reveal that it will be, take a closer look at our top 10.

McAllen, Texas

As the labor market in major industrial centers continues to tighten, companies are competing for labor. It is imperative that they relocate to an area that has an available labor force at a reasonable cost—that's exactly what McAllen offers. The Texas-Mexico border, which has historically had some of the highest unemployment rates in the nation, continues to experience a labor surplus despite significant job growth of the 1990s.

One reason for the surplus is that the McAllen-Edinburg-Mission MSA has been busy outpacing the rest of the nation in population, now topping 1.2 million. Along with its growing population, McAllen is fortunate to have a very young and trainable labor force. Also, the workforce in McAllen is largely bicultural/bilingual, helping this southern market become the primary site for companies to set up operations on the U.S./Mexico border.

Augusta, Georgia

You can't underestimate the positive impact of a U.S. military base on a local labor pool, and Augusta is one of many examples in our Top 10 this year. With the U.S. Army's Signal Corps headquarters training all military branch personnel at Fort Gordon, Augusta employers are in the catbird's seat when it comes to accessing talented workers. The Signal Corps trains personnel in telecommunications, electronics, computers and logistics, making ready a diverse pool of military officers that re-enter the civilian workforce each year.

Some of America's most well-known brands, like Proctor & Gamble, Kellogg's and SOLO/Sweetheart Cup, are tapping into Augusta's talented workforce. This market combines a diverse economy with one of the strongest educational and medical communities in the South (Medical College of Georgia, 10 hospitals and three colleges and universities call Augusta home).

Wichita, Kansas

Wichita boasts 60,000 manufacturing workers – that's 21 percent of its employment base – and a near century-old history of workers who have designed, fabricated and assembled ultra-reliable aircraft precision products. Those skills translate well to bus, motorcycle, commercial machinery, metal products, electronics and advanced plastics and composite products manufacturing.

But Wichita's talent pool is not limited to manufacturing labor. The city offers plenty of skilled workers in a wide variety of other fields, thanks to McConnell Air Force base and its 500 annual discharges of well-trained, disciplined civilian job candidates.

Clarksville, Tenn., Hopkinsville, Ky.

Clarksville/Hopkinsville has three critical labor advantages. First, the area is home to Fort Campbell, with its more than 26,000 active duty soldiers and family members living in the communities. Second, three universities and colleges focus heavily on workforce development. For example, Hopkinsville Community College's Technology Center has expanded the region's manufacturing base, which totals over 30 percent of the local workforce.

Finally, Clarksville/Hopkinsville offers a strategic location. The area is close enough to Nashville to benefit from big city attractions without paying the high price to live in a metropolitan location. That attracts skilled laborers who want a quiet life just within reach of the metropolitan hustle and bustle. Clarksville/Hopkinsville is also a job center for surrounding communities, drawing many talented workers from as far way as 30 miles. This strong non-union area has all the ingredients to keep employers well stocked with skilled workers.

Florence, SC

This city is dedicated to workforce training – and it is paying dividends for area companies. Florence boasts a university, a technical college and the Southeastern Institute of Manufacturing and Technology to offer continuous partnering with business and industry to meet training schedules with customized programs.

Florence has the talented, eager, ready-to-go workforce to match its reputation as one of the most diversified economies in the Southeast. A proven location for business and industry, Florence officials say the county's most valuable assets are its citizens who are striving for a higher quality of life.

Danville, Va.

The tobacco and textile manufacturing plant closings in recent years translate to an abundance of talented workers with industrial skills and a strong work ethic in Danville. Danville Community College supports the city's reputation for producing well-trained, skilled graduates, particularly in technical fields such as electronics, manufacturing, heating and air, engineering, drafting and design and engineering technologies. Two universities also support the community's workforce training efforts.

Virginia Tech, Averett University, Danville Community College, and local political and governmental leaders recently established the $21 million Institute for Advanced Learning and Research. With this integrated K-20 approach to education, Danville has a solid game plan for ensuring that a talented workforce is available for existing and future employers.

Sumter, SC

A growing population of 105,000 and a workforce of 46,000 means Sumter can handle large labor demands, despite being a small- to mid-sized community. More than 5,000 workers commute to Sumter, extending the talent pool beyond the county lines.

Shaw Air Force Base supplies this community with a wealth of talent and skills. Each year hundreds of highly trained workers – people from all over America – leave the military and decide to stay in Sumter. For more than 50 years, this regular infusion of talent has given Sumter a skills advantage. The mixture of good old southern work ethic and the diverse skills supplied by military training make this a uniquely qualified place to meet the needs of manufacturers demanding plentiful, talented workers.

Rounding out the reasons for Sumter's ranking, Sumter's Workforce Development program routinely surveys local manufacturers to identify skills gaps, then teams with Central Carolina Technical College to fill those gaps.

Fayetteville, NC

Like several other entrants on our Top 10, Fayetteville boasts a strong military presence, with about 8,000 soldiers a year re-entering the civilian marketplace. That's not counting military spouses, another one of Fayetteville's assets. All in all, Fayetteville's military background breeds a wealth of educated, trained, experienced, hard working job candidates.

Fayetteville businesses benefit from an excellent local school system and highly regarded technical colleges and universities. In fact, Fayetteville Technical Community College, the second largest in North Carolina, has built a reputation for having some of the best workforce training programs in the nation. The state of North Carolina also funds training programs for new and expanding industry, including special programs to fund training for military spouses.

Pine Bluff, Arkansas

While one out of every five jobs in Pine Bluff is in industry, a diverse mix of government, agriculture, health care, tourism and service ensures a plethora of skills in Pine Bluff's workforce. Skill sets include engineering, construction, testing and operations, light and heavy industrial manufacturing, chemical and biological products and research facilities.

Pine Bluff is home to a four-year university and a two-year community college dedicated to preparing the workforce of tomorrow. Southeast Arkansas College's (SEARK) Workforce Development Center is staffed and supported by professionals dedicated to creating and delivering high-quality company-specific training programs. SEARK has a relatively new manufacturing degree program and has developed an associate of applied science degree program in biotechnology.

Hampton Roads, Va.

As a result of the large military presence in the region, Virginia's Hampton Roads has a skilled pool of potential workers that few other metropolitan areas can match. Each year over 15,000 trained and disciplined personnel exit the military. Many of these men and women choose to stay in the area to look for private-sector employment. In addition, approximately 40,000 military spouses are available to work in the Hampton Roads area.

Hampton Roads also has a strong student population. More than 86,000 students attend Hampton Roads' eight universities and four community colleges. Most of them are permanent residents, available for part- or full-time employment. The region also offers a high number of seasonal workers. The tourism industry creates over 10,000 seasonal jobs during summer months. This group provides an additional source of workers to companies with personnel needs that peak at other times of the year.