Help Wanted Work Force With the Right Stuff

by Audrey Pennington

Many expanding companies are finding themselves stranded in labor pool?s shallow end, unable to hire enough workers with the right stuff.

What?s the single thorniest issue facing corporate site locators currently?

Hands down, agree consultants and corporate pros, the single biggest obstacle is finding an adequate supply of workers with the right skills and right attitude. As growing economies struggle to cope with double transitions to increasingly sophisticated technology and global competition, major work-force shortfalls are showing up.
?What?s missing is the competency and capacity in the work force,? says Dr. Ted Hershberg, professor of public policy and history at the University of Pennsylvania and director of the Center for Greater Philadelphia. ?Before you grow your local economy, you?d better develop the capacity to grow.

?Solve the labor problem, and you can write your own ticket,? says site consultant Mike Mullis of J.M. Mullis, Inc., who is working on more than two dozen capital-intensive, U.S. location projects. ?In all of them, the No. 1 issue is labor.?

Wage advantages among competing locales don?t play a major role in determining the locations of capital-intensive projects, Mullis says. ?Cost is not nearly as important as quality — trainability and adaptability to learn new skills. The second important factor is attitude — turnover and absenteeism.?

?There are fewer rote jobs,? explains location consultant Kate McEnroe, ?but companies are having a problem finding low-wage, yet dependable workers.? Production work often requires machinists who can operate CNC (computer numeric control) equipment, and the demand for trained workers is so great that students in a two-year program are offered jobs midway through their course, she says.

In addition, the type of skills required for back-office work has grown more complex, McEnroe says. ? A pink-collar reservation center requires a broad range of skills, and a Charles Schwab or Fidelity-type center needs a higher- skilled worker.?

Raising the Bar

Global competition, rapidly changing technology and shorter product life cycles are pressuring workers in many industrialized economies to perform at higher skill levels than ever before. And now, with U.S. unemployment at near-record lows, companies who need skilled professionals — the ?knowledge? or ?gold-collar workers? — are finding it difficult to maintain current staffing levels, much less expand.

Nearly half of CEOs surveyed by the U.S. Council on Competitiveness said that inadequate worker skills pose the greatest competitiveness challenge in the next 10 years.

Unable to recruit enough skilled engineering graduates, British Aerospace made headlines this year with plans to create its own university. A large software developer in Philadelphia can?t fill 250 jobs, despite taking recruits through a six-month training program.

Nearly 250 state and local organizations in the United States alone are promoting standards-based educational reforms in their own communities, prompted by concerns over a growing work-force skills gap. Increasing use of technology is affecting the level of workplace skills. For example, the percentage of workers using computers in their jobs doubled in just nine years, climbing from about 25 percent in 1984 to nearly 50 percent in 1993.

Clearly, job growth has been concentrated in areas requiring higher educational attainment than in the past. An estimated 60 percent of all jobs created by 2005 will require some college. In 1983, only 30 percent of jobs required post-high school education.

Shopping for Human Capital

Company work-force needs vary so widely that there?s no single recipe for assembling the appropriate employee group. Still, there are some broad approaches that can be based on skill levels.

For example, site locator Mullis says only two U.S. states — Texas and California — currently have diverse populations large enough and growing fast enough to supply workers for both low- and high-skill corporate expansions.

Other states, such as North Carolina, are actively seeking to attract outsiders as a way to ensure an adequate work-force base, Mullis says. ?They have the training programs, and need more workers to keep up with the high-growth demand.?

Some firms have crafted creative solutions to their work-force needs, Mullis explains. For example, to staff the second shift at five distribution centers, Briggs and Stratton recruits students at so-called ?working universities,? such as Southern Georgia University in Savannah, Ga., and Auburn in Alabama, where many students work to pay for college. Decent wages for 26-hour work weeks and medical benefits help keep a steady supply of students on the job four or five years.

Others look to areas with large military bases, such as Jacksonville, Fla., targeting spouses of active-duty personnel for a multi-year ?hitch? in manufacturing.

Creative Site Searches

Firms seeking qualified entry-level workers will need to start looking at out-of-the-way places overlooked in the past, says location consultant Dennis Donovan of the Wadley-Donovan Group. He points to locations such as the upper peninsula of Michigan, smaller communities in Mississippi and Louisiana, and others such as ?the Lubbocks and Longviews in Texas, the Kinstons in North Carolina.

?When companies go in and pay top wages in those towns — even though the stats say the labor force is undereducated — they will attract the cream of the crop,? Donovan says.

Canada is also often overlooked as a resource, he says. ?Its surplus labor market, with an educated, productive work force, has substantially lower costs than in the United States with equal, if not better quality, and a good supply of both high and low-skilled workers.?

— Audrey Pennington is an associate editor of Site Selection.