Todd Greene, VP Atlanta Fed Community and Economic Development Group

In the 1600s, a farrier fit shoes to a horse in a stable. In the early 1900s, a welder molded a driveshaft part for an early-model car in a factory. Today, a computer programmer develops code for a gaming application at a coffee shop. While the definitions and locations of jobs have evolved over time, the importance of job skills has also increased because of technological and other innovations.

Employers have always needed appropriately trained workers to maintain and grow their businesses. The public and private sectors have responded to these evolving needs by developing various efforts to facilitate skill development. Employer-based incumbent worker training, vocational colleges, and state offices of workforce development are successful initiatives that were launched over the last century.

Furthermore, workforce boards—usually nonprofit organizations that bring together communities’ public and private sectors to address workforce needs—have also been an important component to ensure a community’s skilled labor aligns with the needs of local employers. Yet ensuring that human capital talent matches local needs remains complicated for workforce development professionals, both private and public. Local workforce development channels must adapt by becoming more innovative and nimble.

Skills mismatch hinders employment. To no one’s surprise, the increased focus on workforce development is especially pronounced because of the current economic climate of high unemployment. Most of us know at least one person who wishes to work but has not found a job. That inability to find work may be partially attributable to a skill deficiency; factors related to the business cycle are the cause of the largest share of unemployment. In addition, even in areas where there are fewer open jobs than job seekers, available jobs often go unfilled because of insufficient local talent and skill development pipeline issues.

In some cases, and despite the significant efforts of workforce development initiatives, communities are comparatively underprepared to supply the types of workers local employers demand, resulting in a skills mismatch. In a 2011 International Monetary Fund (IMF) paper, economists Marcello Estevão and Evridiki Tsounta created an index of skill mismatches across the 50 states and the District of Columbia. Their research shows how shrinking industries—such as construction and financial services during the recent downturn and manufacturing on a more structural basis—could have contributed to the swelling of a particular skill set among the unemployed. That skill set may not necessarily be absorbed by expanding industries such as health and education or professional services.

While the IMF study suggests that skill mismatches increased in the country as a whole during the recession, the more striking feature is the statewide variation in the skill mismatch index. Among the southeastern states, Louisiana and Mississippi have the highest levels of skills mismatches. Alabama, Florida, and Tennessee follow with high skills mismatches. Only Georgia has average skills mismatches.

Another pressing issue for workforce developers is the soaring ratio of older workers relative to younger workers in the country. Simply stated, there will be fewer workers to fill jobs, and ensuring that workers’ skill sets match local needs will be even more important. In a recent speech at the Atlanta Fed, Dowell Myers of the University of Southern California, a professor of urban planning and demography, suggested that immigrant workers and underemployed minority youth will be important to the workforce of the future. These populations often are not the targets of workforce development efforts but perhaps should be.

Policymakers and practitioners at all levels are increasingly looking at policies and programs to ensure that workers have the skills they need to maximize job opportunities. Unfortunately, the funding for workforce development has been in decline. Federal funding for key education and training programs under the U.S. Department of Labor declined by over 25 percent in inflation-adjusted terms between 2001 and 2009, according to a 2010 report by Armand Biroonak and Kermit Kaleba published by the Institute for America’s Future and the National Skills Coalition. Consequently, local workforce development must learn to do more with less. Reduced funding has encouraged some communities to develop effective programs, including free or low-cost strategies. One example is intern programs that partner local businesses with high school students.

A new workforce development strategy: Focus on soft skills. While workforce development has traditionally focused on hard skills, numerous studies—including a 2007 Southern Growth Policy Board report—have identified soft skills as a significant barrier to employment. Reporting to work on time and drug-free, having the ability to work on a team, and showing respect for the boss are soft skills often ignored by workforce development programs. Yet employers appear increasingly likely to indicate the soft-skill deficit as a challenge to meeting their workforce needs. Clearly, workforce development channels must embrace approaches that address soft skills to meet this employer concern.

Working better, together. The Atlanta Fed and several other Federal Reserve Banks have conducted local focus groups to understand better the relationship between local workforce development and unemployment. While a summary report will be released later in the year, preliminary results suggest the need for more robust, responsive, and efficient local workforce development structures.

Many promising workforce development practices are emerging at the regional, state, and local levels. For example, while many states have adopted models that define a standard for employers regarding the skill set of prospective employees (determined through testing, usually offered by the state), Georgia has taken this concept a step further. It developed a standard in which communities themselves receive a designation. Areas designated under the Georgia Certified Work Ready Communities have meaningfully committed to ensuring that their populations receive a minimal training opportunity for jobs. They have also taken steps to improve high school graduation rates.

In Mobile, the Southwest Alabama Workforce Development Council recognized that it needed to be more responsive to that region’s critical workforce development needs. Rather than have traditional monthly meetings, the formalized work teams meet much more frequently—often weekly—to address both short- and long-term workforce development challenges.

The New Orleans area economic development entity GNO Inc. has identified the digital media industry as a target to diversify local economies. GNO recognized that local workforce development efforts need to be strengthened to support the growth in this specialized sector. It is considering a number of strategies, including embedding local digital media business employees within high schools and encouraging technical colleges to offer onetime intensive courses to meet the needs of this fast-changing industry.

There is also interest and commitment to support local workforce development initiatives from nontraditional and new sources. In the Mississippi Delta, the Annie E. Casey Foundation and Kellogg Foundations are partnering with local organizations to integrate workforce development as a part of other community improvement efforts.

In Carrollton, Georgia, the public school system has partnered with one of the region’s largest employers to provide high school courses within a manufacturing plant. This program helps students develop relevant work skills while helping to meet the labor demands of a company faced with labor shortages. Moreover, because the workforce needs of companies are changing at a rapid pace, communities will need to be more agile in their workforce development approaches. Traditional committees and boards with representation from various community and industry stakeholders will require innovative approaches to meet the needs of local employers.

This article appeared in the first quarter 2012 issue of EconSouth, the Atlanta Fed’s publication.

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G. Edward DeSeve, Senior Fellow, University of Maryland

By G. Edward DeSeve, Senior Fellow, University of Maryland, Public Management and Finance
From the March/April 2012 issue

As a senior advisor to the president, G. Edward DeSeve oversaw the implementation of the $787 billion American Recovery and Reinvestment Act. He has been a professor of public management at the University of Maryland, where he currently is a senior fellow.

1. Know your job creators: You need to find out what kind of jobs employers currently have in place and whether their companies and their industries are likely to grow. You need to get the statistics and also talk directly with large and small employers.

2. Know your labor force: What kinds of skills are in your labor force and how can they be enhanced? Do these skills fit what employers need? Will you need to “import” some workers? Where are you likely to find them? For example, Canadian health-care providers recently advertised in the U.S. for workers to fill their skill shortages.

3. Know the strengths and weaknesses of your community: Location, transportation, infrastructure, quality of life and education are only some of the factors that affect location decisions. Seek out location consultants and ask them how you stack up against your competition–regionally, nationally and internationally.

4. Partner: Find employers who are willing to work with you and put them to work with their customers, their suppliers and their colleagues to encourage job creation. The “agglomeration effect,” where co-location promotes efficiency, is very real.

5. Talk constantly: Let people know that you are “open for work.” At every chance, let employers know that you want to help in any way you can. Go to schools and colleges and encourage faculty to understand local needs and encourage students to seek employment locally after they graduate.

6. Have a plan: Publish an official “plan for jobs.” This should describe what kinds of jobs you want, where they could be located, what incentives are available, what federal government programs can be used to help, what regulations might need to be changed, and how taxes can be modified to encourage job creation. Make sure that there is an organizational infrastructure in place to carry out this plan with well-packaged financing and training available.

7. Streamline processes: Make it easy for employers to add jobs in your community. Everything from applying for a business license to getting construction permits to paying taxes should be as simple as possible, and there should be a bias in your government in favor of simplifying processes for employers.

8. Emphasize services: The business of local government is to provide services. Let people know how good yours are. Whether it is police or fire or water and sewer, good services thoughtfully provided to employers can be very helpful. If you have a great recycling program, for example, let employers know about it. A green community may be just what an employer is looking for.

9. Partner again, this time with other governments in your region: Jobs in a town or county just across the border will help your residents as well. A joint effort to sell a region can be more effective than cutthroat competition. Work at the state level to promote every benefit that your state has to offer to encourage employers to expand.

10. Hustle: At every opportunity, talk about jobs and the need to create more. Go to every event you can where job expansion is happening. Let the employers know that you are glad to help in any way you can. Be relentless.

Prof. DeSeve’s columns appear online.

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QMy company is looking to build a new facility, and I have been contacted by a community who is targeting companies in our industry. How do these communities come up with the industries they target?

The Expert Says: Answering how communities come up with their target industries will help determine whether you should consider the location that contacted you. It is important to first understand that the primary motivation of targeting is for the communities to enhance their marketing efforts by focusing on industries that are growing; have a strong presence or potential to establish one in the community; and have desirable characteristics (e.g., above average wages). So, being a target should be an indicator that this is a community that will have some appeal to you.

Most economic development organizations have at least a few industries that they target with their marketing efforts, but how these organizations determine their target industries varies from one to another. Many organizations contract with outside consultants to determine their target industries while other organizations establish their targets internally. In any case, the information that is analyzed to determine the targets is similar.

One of the most important aspects of determining whether a targeting program is a positive indicator for you is how the program incorporates the presence of existing companies in a community. One common measure for this is location quotient—what is the concentration of firms in the target in this community, relative to national average concentrations. A location quotient greater than one means there is an above average concentration of firms in the target industry in the community. Some community targets will have a location quotient greater than one—these communities will be trying to leverage all the advantages they already have for that target industry, and grow with their strengths. However, some communities will target industries with a location quotient less than one—these communities will be trying to establish a stronger presence in an attractive target; they will be trying to “get their share”.

It is your company’s circumstances that will determine whether a location quotient greater or less than one is better for you. For communities with a strong existing concentration, they are more likely they to have a skilled workforce and existing education programs to meet the needs of other companies in that target. In addition, utility providers will be familiar and experienced with your infrastructure needs, and the political climate is more likely to be favorable towards your industry.

In addition, the presence of many other firms in your industry should help with recruitment of key talent—a stronger local labor pool and a more attractive location for those you may need to recruit from outside the area. However, these potential advantages may be countered by concerns about so much competitor proximity—the risk of losing key people and company intelligence, the potential for expensive local wage and salary competition for the best talent, and being one of many fish in a very big pond.

Ultimately, you should be driving your site selection decision based on upon your strategic and operation decision criteria. Being a target provides more input to your evaluation of a location, but even that status must be fully understood in order for you to decide if it is an advantage for you to consider.

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QMy company is considering where we should build a new facility to manufacture a product designed to take advantage of renewable energy sources. We want the new facility to be located in a region, state, and community that encourages the development and use of environmentally-friendly technologies and practices. How should we evaluate potential locations for our facility?

The Expert Says: I will start from a macro perspective. To state the obvious, your company would do best to consider a country with good environmental conditions and a good record on environmental issues. By most respects this would limit your search to the developed countries rather than developing nations.

Diving down a little deeper, there are a number of factors that should be considered at a regional level. I will start first with air quality. The condition of a region’s air quality is an important measure for a lot of manufacturers who are seeking federal air permits to discharge pollutants from their facilities. If this applies to your facility, then you will want to focus your search on areas that are in attainment for all of the criteria pollutants measured by the Environmental Protection Agency (EPA). Beyond your own discharge issues, it may also be important to your company to be located in a community that has a strong history of monitoring and protecting the quality of its air. As such, the EPA attainment status remains an important factor.

In addition, for companies that are vigilant about monitoring the environmental impact that its products and facilities have, you will also want to pay close attention to the energy and utility capacity of the communities that you are considering. On the electricity side, you will want to evaluate the generating sources owned and operated by the electric utility provider. You may actually elect to only consider communities that are served by an energy company whose generating portfolio is in a majority of renewable sources.

If your process involves a lot of water and/or wastewater production, the planning and administration of regional water and wastewater systems will be an important issue for evaluation. You will want to consider whether or not the regional systems are using cutting edge technology for the capture, treatment, recycling and release of the water and wastewater resources. It will also be important to consider the capacity of the systems under consideration as you do not want to be located in a community where your facility is putting undo strain on the community’s water resources.

At the state level there are a few issues you will want to consider. If your company serves the renewable energy sector, it will be important to consider whether or not the states you are considering have enacted Renewable Portfolio Standards (RPS). It seems obvious that locations that seek to recruit renewable energy companies should be in support of efforts to increase the use of renewable energy. In addition, you might want to consider whether or not the state has enacted any other legislation and or incentives for alternative energy facilities.

Finally, depending on your company’s commitment to the environment, you may also want to consider whether or not the communities are making investments in environmentally friendly practices. For example, has the community developed charging stations for electric vehicles? Does the community have efficient, local mass transit available for its citizens? Finally, you might also consider whether or not the community has recycling programs and water conservation programs or mandates.

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QWe are considering building a new facility in a new location, and we have growing concerns about natural disaster risk.  How do I assess this risk?

The Expert Says: In the wake of the devastating earthquake and tsunami in Japan, everyone is having heightened concerns about natural disaster risk. The events around the world over the past couple of years have brought the issue to the forefront for most selection decisions.

So, what is an expanding company to do? The global impact of far-away disasters is best addressed with various business-continuation strategies such as redundant capacity, strategic replacement capacity, higher levels of inventory, critical raw material reserves, alternative logistics scenarios, etc.

But for your facility location decision, there are clear steps you can take to assess the risk of a natural disaster impacting your facility.  Some of these are more precise than others, and all have limited predictive ability for a specific event at a particular time at a particular location.  However, they can infuse your decision with an understanding of what risks there are, and help you understand the cost penalties you may face when you decide to locate.

The cost penalties can include higher insurance costs, lower insurance caps and limited maximum coverage; site preparation costs; construction cost penalties; even potential disaster training and drill expenses.  In the US, many business facilities survive the initial disaster, but the immediate area suffers such devastation that daily life is brought to a halt.  All types of infrastructure can be out for extended periods of time, although US electric providers often do a remarkable job in restoring electricity.  Your employees won’t be showing up for work if their house, or their family’s houses, have been destroyed, let alone the dealing with the trauma of missing or lost loved ones.

With all these potential impacts, how do you account for disasters in site selection?  If you take an extreme risk-avoidance approach, you need to incorporate disaster risk data into the definition of your search region, and immediately screen out regions prone to disaster.  More typically, the search region is defined by business factors (e.g., inbound supply and outbound product markets for manufacturers).  Once those factors establish a defined region, natural disaster risk can be one of the screening tools to identify the Areas of Interest in your region.  For example, you may apply different scores to different risk levels, so coastal areas would get low scores for hurricane risk, while inland areas would get higher scores.

Natural disaster risk data is available for earthquakes (ground movement hazard), and tornadoes (measures of size, frequency, damage).  Hurricane data includes historic tracks and some measurements of historic wind peaks, but it can be difficult to apply to the site selection process.  Flood risk assessment is improving as the Federal Emergency Management Agency reviews much of their flood zone assessments.  Fire risk is based on historic patterns and current conditions (development, weather, brush management, etc.)

Once these items are included in your screening, your model should steer you away from areas more prone to natural disasters.  Further investigation during your field work stage may uncover more local details regarding disaster issues, such as recent history, community response, etc.  As with all other site selection factors, this approach will help you make an informed decision, even accounting for natural disaster risk.

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Q My company’s internal team is looking at several places for possible site locations. Workforce is a huge driving factor in our decision, and we need to get a true sense of the workforce/labor in each location. How do professionals evaluate the labor environment in competing locations?

The Expert Says: Workforce is often a major factor driving the site selection process. Therefore, it is extremely important to dig deep to truly get a sense of the labor environment in each competing location.

A starting point for workforce information is federal data from sources such as the U.S. Bureau of Labor and Statistics. This information will allow you to compare counties, metropolitan statistic areas (MSA), etc. While there is information available on the local level, this data is generally not comparable with one another. It is important to compare “apples to apples” when looking at workforce data.

Although federal data is a good starting point, it is very important to look at factors past the data. Professionals often use labor interviews with representatives from existing industries in a community to evaluate the labor market.

Labor interviews are confidential interviews that include a consultant and a representative from an existing industry (Human Resources Director, CEO, etc.) that can speak to a broad range of topics at the company. No one from the local economic development team is included in these interviews. Companies are more willing to speak honestly about issues without the local representation present in the room. A consultant will interview several companies from certain industries that would reflect similar situations to the client’s companies. The information from all the interviews is aggregated into a confidential document that does not give any names with direct quotes, adding to the comfort of the interviewed firm. Having a consultant on the project is a great benefit at this point in the process because consultants have ready access to existing industries.

Labor interviews can be the most valuable tool for evaluating the workforce in an area. These extensive interviews delve into topics such as employee commuting patterns, wages and benefits, shift models, labor management relations, recruiting techniques, training experience, infrastructure, and community characteristics. In these interviews, the consultant will explore the data of the company such as absentee or turnover rates while also pushing into more conversation from employers. Having a face to face interview allows the interviewer to go past basic comments such as “Wages are low,” or “Training programs are good.” For example, having a conversation about recruiting will allow the client to understand how both geographically (search region) and technically (newspapers, online, etc.) they should recruit for certain positions. One will be able to get a sense if whether or not local recruiting will work for hiring salary positions or if you should look outside the region for these positions.

When visiting a community, most economic developers are going to tell you that his or her community has the best schools, workforce, and utility providers. It is important for you to sift through their praise to determine if the community is a great fit for your company.

From this interview, one can see trends in the region that will affect the workforce both positively and negatively. There will be far less unexpected curve balls thrown at a locating company once they have evaluated the workforce thoroughly.

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Q How does a Geographic Information System (GIS) enhance the site selection Process?

The Expert Says: As the saying goes, be it a map, pie or bar chart, or scatter plot, a visual is worth a thousand words. GIS is a database linked to geographic features to perform complex location inquiries with a user-friendly map format as the end result. So the product of a GIS site selection analysis is composed of a map or group of maps displaying the requested site selection screening criteria in a way that is easily visually understood.

A typical site selection process is conducted in four phases. The primary GIS component falls within Phase I, which focuses on describing the project and then defining and screening the search region to determine Areas of Interest. The other three phases include: Phase II: extensive field work and analysis resulting in the creation of a shortlist of Finalist Locations; Phase III: final negotiations among the Finalist Locations with the selection of a Preferred Location; and Phase IV: incentive documentation, real estate transaction, and incentive capture.

In Phase I, the client’s project requirements are interpreted into a set of measurable screening criteria. GIS then provides a great value in determining and assessing a target search region using the clients requested criteria, resulting in qualified “Areas of Interest” that are displayed in a map format. The resulting maps visually aid the project team in locating pockets of viable areas to consider for further review). It is important to note that GIS is just a tool used in the process—a decision-support instrument, not a decision-making instrument. Using the GIS screening process in Phase I reduces the amount of time necessary to locate Areas of Interest to days instead of weeks or maybe even months, therefore getting the client through the Phase I process quicker. In addition to efficiency, GIS enhances effectiveness, directing the location team to areas that meet initial criteria and so more likely to house their preferred location.

After the viable areas are selected, an RFP is submitted to the qualifying state and/or local offices. GIS is then used to show the locations on a map that fit the RFP requirements that have been submitted by the various offices. After analysis of the RFPs, a map is generated that shows which candidate locations were retained, marginal, or eliminated. If you do not have a GIS system, some analysis can be conducted in spreadsheet format; but the result is an output of rows and columns, which do not easily show the Areas of Interest in a visual, comprehendible format.

Some criteria require the analysis of mileage radius around specific data, such as a 10-mile radius around interstates and connecting free limited access highways or a 25-mile radius around union locals that have 500 or more members. This analysis cannot be easily done in a spreadsheet format; and along with the mileage radius, a percentage of the county area needs to be calculated.

After you have calculated the screening criteria in different formats or software, you must bring together the resulting analysis into a chosen software to display the results. A GIS system will do all that for you with a map or set of maps showing each individual criteria screen and a resulting composite map.

So, GIS can be an important tool in making a decision process more efficient, effective, and understandable; but to realize GIS benefits, the system needs to be a part of a sound overall decision process using in-house expertise to best utilize the programs and manage the data that are available.

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Q Our company is evaluating incentive proposals for a new facility location. Most offer training incentive support, but we are not sure we understand how these work, or even if they work at all. How do we best assess these training incentive offers?

The Expert Says: Workforce training programs are now available in almost every state, although the nature of the programs, including funding sources, as well as their training experience and their ability to deliver in a timely manner, vary widely.

Here are four major points to make sure you understand when you are evaluating the proposal and then proceeding with any additional negotiations.

1. Be prepared. Ideally, you should have a good idea of the number of employees and job titles/functions as well as some idea of the desired skill requirements for the positions – both for initial hire and on-going skills development. Similarly, you should have a hiring schedule showing how people in which positions will be expected to be hired by certain dates. This will go a long way toward moving the training incentive offer to a more definitive state. It will also enable you to better understand your expected training cost and how to evaluate the impact of the training offer.

2. State sources of funds for your training incentive. (You can benefit from both federal and state programs; they are not mutually exclusive.) State funded programs generally have more flexibility in whom you qualifying for the training programs; e.g., there are rarely “targeted population” limitations, and in general far less “red tape”. They are often “pre-employment” programs, meaning the training is done prior to you employing the person. This is designed to provide you with a basically trained workforce upon opening your facility. They are generally well managed and easy to work with, and can be available for future employment expansions as well. In many states, these state training programs are offered at no cost to the company.

3. Components of the training offer. In full service programs, the services provided include recruitment, screening, and training. Recruitment involves the state labor/employment office providing job descriptions, job postings, application process, and even available space for interviews. Screening services include basic application assessment to selected testing (manual, written, etc.); interviews are typically the responsibility of the hiring company. Training can include everything from training program design, materials development (including custom videotaping of existing processes), space for training, and instructors (they can usually “hire” your employees as trainers). For certain projects, many states will pay (at state per diem rates) for travel of select trainees to existing locations for more intense training, with the objective that they will return and become some of the trainers at the new facility (“train the trainer”).

4. Capturing the value of the incentive. Training benefits are offered as a combination of cost avoidance services and expense reimbursement. Cost avoidance is where the training organization provides services on your behalf (example, recruitment and screening services are typically offered as cost avoidance). Reimbursement elements, where the state program reimburses you for eligible training expenses that you undertake yourself, may also be available in some states. The mix of cost avoidance and reimbursement varies widely from state to state, so it is important to understand this detail.

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Q I have to find a suitable site for our first U.S. wind turbine component manufacturing facility. How do I start?”

The Expert Says: Facility location decisions are extremely complex and the wrong choice can impact a company well into the future, so be thorough. I recommend that you consider numerous factors in your decision-making process. The evaluation criteria below can be measured for all types of projects or industries, but wind turbine component projects require a much deeper dive into logistics and labor.

One of the most important criteria is proximity to wind farms, since components are enormous and are both difficult and expensive to transport. Assuming that you have determined the likely locations that your product will be deployed, you next need to solicit property proposals and begin your in-depth evaluation. Target a property with adequate acreage for current and future growth, ample outside storage, and enough room for onsite rail infrastructure. Port proximity will need to be considered if you plan to ship internationally.

Wind towers, rotor blades, and nacelles are increasing in size, so the difficulty with transporting equipment over-the-road or on rail is escalating. Trucking oversized loads will require permits in each state traversed, and the permit requirements differ by state (acceptable time of day, weather restrictions, etc). Also, routes may be limited due to traffic congestion or obstacles.

Though most of your product will likely depart by truck, rail access is important if you need to ship well outside of the immediate region. Rail use is typically more cost efficient when heavy equipment must be transported more than 500 miles. Keep in mind that a rail carrier may not be willing or able to serve the property even if an existing rail siding is adjacent. The service provider must first confirm that the equipment will have unimpeded access to their mainline, and then identify a suitable route to an available rail siding close to the wind farm to unload.

An adequate labor pool is important. Whether you are seeking welders for towers, mechatronics specialists for nacelle assembly, or molders/grinders for rotor blades, it is critical that you identify locations where those proficiencies adequately exist, and qualified training institutions are present to upgrade skills as necessary.

Be sure to work with local agencies offering recruiting and screening assistance to identify and hire qualified candidates. Experienced agencies can support your HR department during your growth phases.

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Q As we prepare site selection decision, we are faced with labor data from various sources that appear to have different results. How can we best understand local wages in the areas we are considering?

The Expert Says: In order to thoroughly evaluate an area under consideration for new investment, you must compare data from a variety of sources and not rely solely on one source. An important first step, if you have not already done so, is to identify the positions that you will be employing in your new facility.

Once you have identified the positions that will be employed in the new facility, a good place to start your research is with federal data available through the Bureau of Labor Statistics. You will be able to find out the number of people employed in each occupation code in an area as well as the median hourly wage, the mean hourly wage, and the mean annual wage. By starting with federal level data, you are able to compare different areas of the country by the same resource. While a good starting point for your research, it is important to note that BLS data is usually a few years behind.

Your next step is to look at state level data for the areas in which you have narrowed your site selection search. Most states have a labor market information (LMI) division that provides labor statistics similar to those available through the Bureau of Labor Statistics. This data is usually slightly more up to date than federal information, but each state may calculate the data differently, so it is not always comparing apples to apples.

Once you have narrowed down your search to specific communities, you should ask the local economic developer if they have any local wage surveys. These surveys are usually conducted by their local chamber of commerce or the Society for Human Resource Management (SHRM) chapter. These are usually not published publicly, so asking the local economic developer if they have a survey available is important. Like the state level data, each survey is conducted differently so you need to pay special attention to the methodology, date, and sample size of the survey.

In addition to the data available at the federal, state, and local level, there are also private databases where you can purchase wage information for specific areas and industries. Like the information collected from other sources, you need to consider the methodology, data, and sources of the information you are purchasing.

After you have narrowed your search to a few specific locations, talking to private industries in the area where you are looking is helpful. While the local economic development contact can help you arrange these meetings, the meetings should be closed door between you and the general manager or human resource manager at the companies. You want to find out about specific wage and benefit information, and you also should ask about the labor market in general, recruitment of new employees, unionization issues in the area, workers compensation climate, etc. While these meetings can be the most revealing in terms of wage information, you need to realize that these companies are just a small subset of the market, so you should not rely solely on these interviews.

While the above sources of information are important pieces when evaluating wage information in an area, they are all merely pieces. Evaluating all of them together makes the picture clearer and allows you to make a more informed site selection decision. And finally, wages are only a piece of the site selection decision, so it important not put too large of an emphasis on wages alone.

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