In the late twentieth century when economic development was becoming professionalized, a community might have one sheet of paper describing its ‘workforce’ which would be shared with prospects and clients. Key indicators like Total Labor Force, Unemployment Rate, and % of Workforce with a High School Diploma would be featured. It might also include a map indicating the multi-county labor pool an employer could plan to draw from. Over time, as ‘talent’ has become a primary driver for companies and site consultants’ analysis, the data that communities promote has expanded and grown, becoming more precise and current.
There are three key categories to describe the talent potential for a community: the characteristics of the labor market that the company can hire from; the demographics and characteristics of the people who make up the labor market; and characteristics and metrics for the institutions and programs that are available in the area to train and re-train the workers there.
Labor Market
Many companies use size of the labor market as an initial screen, looking for a community with at least 100,000 or 500,000 in a labor pool. While many local economic development agencies prepare and track data for their county alone, including a drawing or map depicting the labor pool – usually a 20-50 minute drive time – will more accurately aggregate the potential workers for that area. Use commuting data to show the potential size and reach of your labor draw. After looking at its size, an analyst will be interested in the ‘health’ of the labor market – is it growing? Is it aging? Including five- or ten-year trend data for labor force size and median age will give an analyst more confidence in the numbers. The unemployment rate has been an indicator of the availability of the workforce, and has been especially volatile during the economic effects of the pandemic. The age of the workforce can be used as an indicator of availability as well, since people over 65 and under 20 are often not in the workforce. More recently, Labor Force Participation (LFP) is calculated to see precisely what percentage of adults are working or looking for work. This used to be a rather arcane data point most used by economists but is now the subject of endless webinars and articles in popular media since the LFP rate has declined significantly during the pandemic.
Labor Force Characteristics
After covering the labor force as a whole including data on size and availability, communities need to describe or promote the characteristics of the talent pool demographics and other metrics for those workers. Wages, either overall or by occupation or industry, unionization rates, and demographics like age will give employers an idea of the quality of the labor pool. Educational attainment used to be collected only during the decennial census but has moved to the American Community Survey, making it more current. Companies and site consultants use this to compare the make of the labor force among competitor regions. In North Carolina, there are state-wide policy goals to impact and raise the educational attainment of the workforce by 2030, so this once obscure indicator has become front-and-center for evaluating the strength and quality of talent.
Another newer indicator that is fascinating to watch is ‘job postings’ which are counted by ‘bots’ on the internet scraping together job postings from company and agency websites. Several private data sources provide the number of job postings by county allowing for comparative and trend analysis. While there has been skepticism about the absolute accuracy of these data – jobs could easily be over or under counted depending on the company’s practices – most analysts we spoke with consider the data reliable for looking at trends such as whether job postings are growing or declining. They are also valuable by industry sector, indicating which companies and sectors are adding or reducing postings.
Talent Training System
Finally, a strong community profile of the talent pipeline should include information on the nearby systems in place to train the workforce. The presence of one or more colleges or universities can distinguish an area, and this is one category where a regional approach should be taken. Instead of economic indicators, these data will be lists of relevant programs, including the number of degrees, diplomas, and credentials issued if possible. Include the Career and Technical Education programs in the public school systems, and specialized high school or magnet programs including trend data on enrollment or CTE credentials if possible. Work-based learning programs such as apprenticeships is another indicator of strong talent programing.
In our early days in economic development, diving into workforce data and programs was often relegated to the second or third client visit. These days, promoting the quality and availability of the talent pool is often the first line of inquiry. As we have moved through the economic effects of the pandemic, and with changes in data collection and technology, there are emerging metrics and techniques you can use to first understand your workforce and then to promote it to business. Labor Force Participation Rates, Educational Attainment, and Job Postings are a few of the indicators we have noted. Message, post, or email us to let us know what you are using now to understand and promote your talent pipeline.