A low unemployment rate seems like it would be a good thing, right? More people working, earning an income, more people shopping and paying taxes sounds great right? Well, maybe not completely. In the economic-development realm, when we are trying to attract companies to a region, workforce is usually one of a company’s top three priorities when making a relocation decision. They not only are looking for the employees to fill their positions available today, but also want to be certain there will be a future pipeline of talent available to hire. Relocation of large firms can be extremely costly, so most companies want to be assured that they have workforce available for them.
When the unemployment rate falls below 5.2 percent, a community can be considered to have a tight labor market. Tight labor markets have triggered a dynamic shift in companies asking for demographics on available workforce with certain skill sets, not just specific job titles when considering relocation. Employers may want to recruit employees from other industries to meet their needs. This, in turn, can cause employee retention issues with existing businesses.
Each company is different and usually is looking for specific skill sets to build their widgets or sell their products, but what happens if they can’t find the labor force to fill their positions? In part, companies then have to offer a higher wage to attract employees to come work for them. Another alternative would be to hire someone with fewer qualifications and train them in-house at the expense of the employer.
Companies have also been known to include increased benefits and amenities to attract employees. Intuitively, all of those options sound like they would be a great thing, but when a company has to pay more for those employees, it triggers an increase in the cost of their product or services. That increase is typically passed along to the consumer, and a general increase of prices means inflation occurs.
Even in Northern Colorado, with layoffs in the energy sector, we did not see a huge spike in the unemployment rate. The diversity of the industry base has cushioned the loss of employment when one industry goes down. In the last year, laborers in the oil-and-gas industry have been acquired by the growth in the residential industry. Windsor alone has already set a record for single-family home permits in any one year, with more than 450 permits issued so far this year. There are 1,500 more single-family lots available, more than 5,000 lots platted and another 3,000 to 5,000 being master-planned in Windsor. We are not alone; several other communities in Northern Colorado are experiencing the same residential growth.
While our communities can’t mass produce individuals for companies to hire, our region does have several incredible resources to assist new and existing businesses. The two main organizations that economic-development professionals use are the Larimer County Workforce Center and Employment Services of Weld County. While most people may think that workforce centers only assist individuals, both organizations have been around for many years to assist both businesses and individuals with employment training and services. Economic developers maintain close relationships with these organizations and use data and information to attract companies, as well as aid in the retention and addition of employees for existing businesses.
These agencies provide employment and training services to businesses and residents in their respective counties. Through joint partnerships with county, state and local agencies, the workforce centers are designed to enhance the skill sets and employability of individuals competing in the labor force, to establish a working partnership with the business community and to help maintain a qualified workforce. They offer great programs such as leadership-management services, soft-skills programs workplace-readiness certificates, aptitude testing and much more.
Stacy Johnson is director of economic development for the town of Windsor. For more information on workforce concerns, contact her at email@example.com.