There are a myriad of challenges and opportunities to consider when deciding where to locate a new facility: costs, infrastructure, proximity to suppliers, to name a few. This article will discuss the importance of educating yourself on the local labor market, competition and community.
Understanding the Local Workforce
Assembling a capable, experienced workforce is a must. But it's not a given. These are some of the factors that can influence the success or failure of your new venture.
Demographics:
- Age distribution
- Gender ratio
- Educational background
- Ethnic and cultural diversity
Psychographics:
- Lifestyle and values
- Work habits and preferences
- Spending behavior and interests
Other factors
- Infrastructure and transportation links
- Local regulations and incentives
Why Workforce Demographics Matter
Age
- Diversity in experience: An age-diverse workforce brings a range of experiences and perspectives. Younger employees might be more tech-savvy and open to new ideas, while older employees can offer valuable experience and mentorship.
- Adaptability and innovation: Different age groups can contribute to a more adaptable and innovative work environment. Younger workers may drive innovation, while older workers can provide stability and a wealth of knowledge—often the backbone for successful innovation.
- Generational differences: The youngest generation, sometimes referred to as Gen Z, has different values and ways of working than Gen X or Baby Boomers. For more about attracting this demographic, see our blog Workforce Wallflowers: Getting Gen Z to Join the Game.
Gender
- The balance: Is your workforce traditionally more male than female? Or vice versa? If the workforce at your current location skews 70% female, and your new location has a very low percentage of women with the proper skills, you’ll need to focus on talent attraction and consider an upskilling program.
- Why it’s important: Be sure to make a concerted effort to attract a balance of genders. This can help you better understand and cater to a diverse customer base, improve the company's image and appeal to a broader audience.
Education
- Skill levels: Higher educational attainment generally correlates with higher skill levels. Do some research to determine whether the education levels of the local workforce align with your needs. This knowledge can help in setting realistic job expectations and planning training programs.
Note that if the community has a high percentage of college-educated office workers, it may be difficult to staff for manufacturing or warehouse jobs. - Economic impact: Educated workers tend to have higher earning potential, which can influence local purchasing power and economic stability.
Ethnic and Cultural Diversity
- Valuable insights: The more diverse the population, the easier it will be to achieve your Diversity, Equity and Inclusion goals. Operating in a multicultural microcosm of American society will give you valuable insights into consumer behaviors, which can be crucial for marketing and customer service endeavors.
- Inclusive environment: Promoting ethnic diversity can create a more inclusive and welcoming work environment, which can improve employee satisfaction and retention.
Labor Market Analysis
- Local labor market conditions: To understand the availability of qualified workers in the area, research employment rates, job openings, and the number of people actively seeking work. Use real-time job posting data to see what positions are in demand and what qualifications are being sought.
Identifying the skill levels and qualifications of the local workforce can help you tailor your training programs and hiring criteria. This might be a good time to consider waiving the college degree requirement for certain positions. - Labor market information systems: Tools like the U.S. Bureau of Labor Statistics and local workforce development agencies provide valuable data on employment trends, wages, and workforce demographics.
- Identify Key Competitors: Find out which companies are competing for the same pool of workers. For example, if you're opening a warehouse, your competitors would include other warehouses, distribution centers, and manufacturing plants.
- Evaluate Competitors’ Offerings: Look at what your competitors are offering in terms of wages, benefits, working conditions, and career advancement opportunities. This can help you identify areas where you can differentiate your offerings.
- Worker Engagement: One sure sign of low engagement is high turnover. A high turnover rate might indicate dissatisfaction among workers, which could be an opportunity for you to attract talent with better conditions. Just be sure you understand why workers are leaving and ensure that you don't make the same mistakes. Sites such as Glassdoor are good sources for this kind of information.
- Geographic variations: One of the biggest differentiators you've likely encountered is the disparity in pay rates from region to region and state to state. But there are other more subtle geographic anomalies.
For example, Maine and Utah have the highest levels of work/life balance in the U.S., while New York and Illinois are among the worst. If you're locating in an area that prizes work/life balance (and increasingly, most do), then you'll need to know the expectations of the workforce.
A Case Study
A manufacturer of solar panels and provider of utility-scale PV power plants was struggling to identify talent to help them build and maintain their solar farms in remote areas of Arizona, Nevada, and Southern California.
The company was finding it difficult not only to identify the experienced talent needed, but also to retain them. The cost to identify, train, and employ became a sincere issue, and their recruiting team found themselves constantly sourcing the same talent, preventing them from focusing on other pressing tasks.
They turned to Manpower Engineering for assistance. Our team of recruiters specializing in the renewable energy space studied the local geographies, distance from larger cities, transportation options, and salary/benefit offerings. Using this knowledge and tapping their reservoirs of talent, they placed 10 field service technicians within a 6-month timeframe. The company subsequently retained Manpower Engineering for sourcing other field and corporate opportunities.
Building a Local Network
It's also important to build roots in the community, even before your official debut. Here are some ideas:
- Connect with local businesses: Join local chambers of commerce and business associations. Think business councils, city associations or local chapters of national trade or industry associations. This will introduce you to other business owners and professionals and give you a voice in any decisions that might affect your operations.
- Engage with the community: Participating in community events and initiatives will give your organization a face in the community and help you build relationships with local influencers and stakeholders.
Legal and Regulatory Considerations
- Local sources: Each state has its own Department of Labor website with detailed information on state-specific labor laws on topics such as minimum wage, overtime, meal breaks, and more. City or county websites also have resources specific to the region.
- Professional assistance: Labor law attorneys or human resources professionals can provide detailed and specific advice tailored to your situation.
Devise Your Action Plan
Setting up shop in a new location is an exciting undertaking, but it's important to perform a labor market analysis to understand the workforce demographics and psychographics in the area, as well as likely competitors. Similarly, take steps to engage with the local community to build your brand and become fully integrated into the community. With this groundwork, you'll be well-positioned for business success.
Manpower has a nationwide network of talent as well as research-backed talent management solutions. Find out what we can do for you.
