Grow or die, today’s fierce global economy dictates for many firms. And that’s made job-hopping the stairway to payroll heaven. “The average U.S. job stay is about 3.5 years,” says Monster.com CEO Jeff Taylor. Taylor thinks U.S.-based operations may have to recruit foreign employees, who’ll work remotely. Dell Computer’s Michael Dell backs importing more high-skill immigrants. “I think we’re in the middle of an Internet gold rush with no end to its gold; it’s all about creativity,” said Vint Cerf, the MCI senior vice president many consider “the father of the Internet.” No. 2 in population, Texas for the last seven years has ranked No. 1 in job creation. Illinois’s diversified labor strengths reflect its economy, spanning agriculture, finance, manufacturing, mining, services and transportation. With a sharper recruiting focus added to each year’s 250,000 new residents, 60 percent in their prime work years, Florida labor is driving a host of large projects. Georgia’s labor is attracting myriad high-end mega-projects, particularly in Atlanta, which GKN Vice President Greg Roels called “the fastest-growing U.S. high-tech job market.” The metro’s rash of deals includes Etrade’s 2,200-employee campus, Alltel’s 2,000-worker operations center, Amazon’s 1,000-employee distribution center and Green Tree Financial’s 500-worker office. New York City’s labor strengths are driving not only “Silicon Alley” deals like agency.com’s new 1,151-employee office, but traditionally strong sectors as well: There’s Delia’s 803-employee apparel distribution facility, Superior Bank’s new 624-worker headquarters and Ernst & Young’s 4,000-employees consolidation in Times Square — the onetime location nightmare that Boston Properties Chairman Mortimer Zuckerman termed “perhaps the greatest example of urban renaissance through joint public and private efforts.” With area universities continually deepening the pool, the Research Triangle area’s labor makes expansion engines hum. “This is an East Coast Silicon Valley,” said Senior Vice President Jason Molle as Dialog Corp. relocated from California’s Silicon Valley. Raleigh/Durham/Chapel Hill-metro labor has also drawn Lucent Technologies’ 500-worker R&D operation, CREE’s new 400-employee R&D facility and PricewaterhouseCoopers’ new 300-employee office. Pennsylvania’s No. 3 ranking for total colleges, universities and technical schools, plus its No. 4 rating for total R&D facilities, give state labor a potent high-end punch. With Cisco Systems adding a stunning 2,500 new employees per quarter, “you have to question whether you’re going to get the high-quality employees you need by just recruiting in Silicon Valley. Massachusetts is a source of great talent,” Executive Vice President Don Listwin said in announcing Cisco’s new 5,000-employee Boston-metro campus. New Jersey labor’s appeal partially rests in high skills, lower costs and New York City proximity, many analysts say.
Polled corporate executives pinpoint
today’s top 10 U.S. labor markets
Today’s drum-tight U.S. labor evokes James Marshall’s 1848 wisdom.
Building a sawmill near Coloma, Calif, Marshall spied glittering flecks. He dipped his hand into the icy American River and then roared, “By God, boys, I believe I’ve found a gold mine!” The California Gold Rush had begun.
And that Gold Rush continues when it comes to labor, today’s business expansion mother lode: California ranked as the No. 1 overall U.S. labor market in a recent Site Selection corporate real estate executives’ poll.
But all the labor that glitters isn’t necessarily California gold. Most U.S. regions ranked in the poll’s top 10 markets. No. 2 Texas, for example, represented the U.S. Southwest, No 3 Illinois, the Midwest. The Northeast had four top 10ers: No. 6 New York, No. 8 Pennsylvania, No. 9 Massachusetts and No. 10 New Jersey. And a Southeast gang of four included No. 4 Florida, No. 5 Georgia, No. 6 North Carolina (tied with New York) and No. 10 Virginia (tied with New Jersey).
Grow, but How?
But with host of factors withering the U.S. labor pool, how? Record-breaking economic expansion has shrunk unemployment to an all-time low. U.S. universities are turning out fewer high-skill workers; and early-retiring baby boomers will soon surpass new entry-level workers.
But the labor crunch isn’t only hitting high tech: With picker shortages, many orchards’ profits are rotting on the vine. A construction worker dearth stalled Deloitte & Touche Fantus Consulting’s New York relocation. Even Disney ditched its longstanding facial-hair ban for theme park workers.
Against that backdrop, SS telephone-polled 100-plus executives, all members of the International Development Research Council (IDRC), the world’s preeminent corporate real estate association. Those executives voiced their views on “the best overall labor markets,” including availability, productivity, skills, training and labor relations.
Here’s a look at some of the major deals the top 10 markets have fueled in the past 18 months:
No. 1 California
California’s fabled high-tech work force is center stage in that gold rush, landing major job generators like DiCon Fiberoptics’ new 1,000-employee Oakland-metro headquarters.
But California’s high-end labor is feeding other industries, including Swiss-based SR Technics’ 6,000-worker North American aircraft maintenance headquarters at Palmdale Regional Airport. “Employment data show that expansion momentum has shifted to Southern California, primarily to the counties surrounding Los Angeles County,” the California Employment Development Dept. reported.
With seven years of recovery, California’s has added more than 1.7 million jobs atop its previous peak-employment record.
Mining more labor gold, California recently awarded seven commercial space firms US$1 million in grants. “This industry produces high-wage jobs [with] potential to develop a plethora of technologies,” noted Trade and Commerce Agency Secretary Lon Hatamiya.
No. 2 Texas
And state labor is fueling some monster projects. Austin has landed Dell Computers’ 5,000-employee expansion and Computer Science’s 2,000-worker expansion. The Dallas metro had added i2 Technologies’ 3,000-employee expansion, Ericsson’s new 1,700-worker manufacturing/office operation and Chase Manhattan’s new 1,600-employee center. In Fort Worth, there’s Sabre Group’s 9,000-worker headquarters and Ameritrade’s new 1,200-employee operation. And Houston has landed BMC Software’s 4,750-employee headquarters and Exxon Mobil’s new 2,000-worker office.
ABOVE RIGHT: Opened last year in Fort Worth’s Alliance Gateway, Ameritrade’s 1,200-employee facility was only part of the high-tech surge that Texas labor is fueling.
As many of those projects suggest, Texas ranks No. 2 for total high-tech workers, adding 132,000 during 1993-1998, say American Electronics Assn./Nasdaq studies.
Projections put state population at 30 million by 2025, a 50 percent jump. Texas’s enterprise zone program is ensuring that labor in economically ailing areas is part of the state’s growing pool. A new El Paso zone will create 850 new jobs at apparel/home furnishings distributor Brylane, says Texas Dept. of Economic Development Executive Director Jeff Moseley.
No. 3 Illinois
With 1 million manufacturing workers alone, the state has a critical labor mass that’s fed Chicago-metro projects like Tap Pharmaceuticals’ 500-employee plant and Alliance Commercial’s 600-worker plant. And with O’Hare International, Chicago’s distribution work force is ever enlarging, including New Breed’s new 360-worker center.
Some of the heaviest action, though, centers on Illinois’s high-tech work force, the USA’s fourth largest. Chicago’s I-85 corridor is a notable hotspot, landing Lucent Technologies’ 2,500-employee R&D expansion, Tellabs’ 2,500-worker expansion and Sprint PCS’s 940-employee call center (see cover story).
Like all top 10 states, Illinois pushes worker training hard, particularly nurturing its burgeoning high-tech pool. Said Gov. George Ryan, “The information technology industry is growing so fast, people with the right skills are being snapped up [immediately]. We’re . . . making sure this high-growth industry can find the skilled labor it needs.”
No. 4 Florida
High-tech deals are particularly hot along Central Florida’s I-4 corridor. Ranked No. 1 for U.S. job growth, the Tampa metro has supplied the labor fueling major moves like Software Spectrum’s new 750-employee center, American Portable Telecom’s new 750-worker office and Chase Manhattan’s 2,140 new jobs, including its relocated Treasury Technology division. And Orlando, where Cirent Semiconductor has spent $1 billion-plus in expanding, recently landed Siemens’ 300-worker expansion. With most I-4 high-tech firms employing less than 100, more high-end labor growth seems imminent.
New headquarters are also feasting on Florida labor, including Aviation Sales’ 700-employee facility and Spirit Airlines’ 500-worker base, both in Fort Lauderdale, plus SunTerra’s 500-employee operation in Orlando.
Ranked No. 1 for call center growth, Florida added General Motors’ 500-employee Tampa center, Tiger Direct’s 500-worker Miami center and Media One’s 400-employee Jacksonville center.
Quick Response Training (QRT) adds to state labor appeal. “QRT was an essential contributing factor” in USF&G’s adding 400 Tampa workers, says Vice President Terrie Menne.
No. 5 Georgia
Outside Atlanta, quality labor has facilitated deals like Cagle’s 2,000-employee Houston County plant and Wal-Mart’s 600-worker LaGrange distribution center.
With 145,600 new jobs from April 1999 to April 2000, Georgia’s job total for the first time topped 4 million, says Labor Commissioner Michael Thurmond.
The Peach State’s labor success has come without some of its neighbors’ rich incentives. Some state legislators, though, are pushing to up Georgia’s subsidies.
No. 6 New York
Labor quality outside the Big Apple is driving deals like Dayton Hudson’s 678-worker distribution center, Breda’s new 552-employee plant and Health Plans’ new 500-worker headquarters, all Albany/Schenectady/Troy-metro projects, plus Quebecor’s 400-employee Buffalo consolidation of U.S. mass-market paperback manufacturing and distribution.
Bell Atlantic, the state’s largest employer, is also investing $23 million to train workers for 4,500 new state jobs, a step Gov. George Pataki called “a powerful endorsement of New York’s top-notch work force.”
No. 6 North Carolina
High-end Charlotte-metro labor has lured Microsoft’s 1,200-employee East Coast product support center, Sprint PCS’s 960-worker customer service center and TIAA-CREF’s 1,000-employee Southeast headquarters in University Research Park. “Because of its education system, I thought North Carolina would be a natural fit,” says TIAA-CREF Chairman and President John Biggs.
Traditional labor strengths continue to draw the likes of CVS’s 1,000-worker Manson distribution center, QVC’s 800-employee Rocky Mount-metro distribution center, Broyhill Furniture’s new 550-worker Rutherfordton plant and KCS International’s 500-employee Navassa plant.
No. 8 Pennsylvania
Such labor resources have drawn R&D action like SAP’s 2,400-employee expansion and Wyeth-Ayerst’s 500-worker extension, both in Philadelphia, plus First Data Investor Services’ new 550-employee office.
Pittsburgh-metro labor is also feeding major expansions, including Hershey’s 650-employee distribution facility, Duferco-Farrell’s 400-worker addition, CallTech Communications’ 400-employee call center expansion and Nova Chemical’s new 365-worker manufacturing plant/headquarters.
Labor in economically depressed areas is proving to be a draw in Pennsylvania’s tax-friendly Keystone Opportunity Zones (KOZ), which created 2,500 new jobs in 1999. Major KOZ projects include Cigna’s 1,200-employee Scranton/Wilkes-Barre/Hazleton-metro call center, Closeout Distribution’s 500-worker Tremont distribution center and Office Max’s new 350-employee East Union Township distribution center.
Adding to state labor’s appeal is an “improved labor-management climate, a win-win for employers and labor,” said Gov. Tom Ridge
No. 9 Massachusetts
Similar strategies have yielded other high-end Boston-metro job generators like Sun Microsystems, whose campus may house 4,000 employees, and EMC Software’s 1,000-worker expansion.
Outside Boston, strong labor is stimulating the likes of Main Street Textiles’ new 537-employee plant in Fall River and AT&T’s new 1,000-worker sales/service center in Fairhaven, where “highly skilled technical labor was a key factor,” said AT&T spokesman Gary Morgenstern.
No. 10 New Jersey
Pharmaceutical firms seem particularly smitten. Relocated from London, Pharmacia/Upjohn’s Bridgewater world headquarters will almost double initial projections, employing 1,000. Likewise, Pharmanet is adding some 300 new drug-development jobs and relocating a Lawrence, Kan., lab at Robbinsville’s Carnegie Center. “New Jersey’s pharmaceutical concentration was a major expansion factor,” said Pharmanet executive Jacqui Kovaks.
The lower costs boosting labor’s appeal were underscored by Insurance Services Office’s (ISO) relocation of 1,400 World Trade Center employees to a new Jersey City headquarters. Slashing rent $6 million a year will save ISO $120 million through 2020, estimates Chairman and CEO Fred Marcon.
Financial services firms also fancy New Jersey labor, including ChaseMellon Shareholder Services’ new 500-employee Bergen/Passaic-metro office and Waterhouse Securities’ new 400-worker Jersey City headquarters.
No. 10 Virginia
Home to America Online (AOL), Northern Virginia has gained a particularly strong reputation for high-skill labor, landing the likes of Capital One’s 1,200-employee customer service center, Gateway’s 1,200-worker manufacturing expansion, Nextel’s new 700-employee operations center and Intel’s new 250-worker server farm. And, yes, AOL’s new 200-employee technology center
But other regions’ labor strengths are drawing major deals like Towers Perrin’s new 1,000-employee Virginia Peninsula office.
Labor productivity has also spurred major deals. Toshiba-SanDisk joint venture FlashVision, for example, initially slated only 250 new jobs for Dominion Semiconductor in Manassas. “When we started 18 months ago, Dominion was not among the likely sites,” said Eli Harari, SanDisk president and CEO. “But the [Dominion] people are driving like crazy,” besting Japan and Taiwan for all 600 jobs.
ABOVE LEFT: Virginia’s high-skill labor has drawn the likes of America Online, which ended a nationwide by locating its $520 million, 200-employee technology center in Prince William County, Va., where AOL broke ground last year.
Similarly, Volvo Trucks North America’s Dublin plant beat out South Carolina and Mexico for a 1,300-worker expansion in part by setting Volvo’s single-plant record for production volume.
