This blog is for all those communities, especially rural ones, that for a generation attracted manufacturing businesses with a value proposition focused on low wages, plentiful unskilled or low-skilled workers, a strong work ethic, and a low cost of living. I’m here to tell you that the world has changed and this formula is unlikely to continue to be successful. No matter how hard your economic development team tries, they’re facing some strong headwinds. More importantly, if your community does not realize that the world has changed, continuing to do economic development as usual may result in a long-term decline in your community that will be harder to reverse the longer the denial goes on.
- Talent in many rural areas is no longer plentiful.
- Increasingly, talent has options. With low unemployment rates in many areas, they will drive another thirty or forty miles for a couple of dollars more per hour.
- The talent that ends up being available is often high in turnover or absenteeism, often with underlying drug issues.
- Sometimes, the low wages compete with entitlement programs, meaning that the labor force participation rate is lower as some workers choose to stay on unemployment rather than work.
What to do now:
- The first step is to acknowledge the situation you are in. Using quantifiable data is one of the most effective ways to do this.
- A starting place might be data from your business retention and expansion (BRE) visits, the US Census Bureau, and other public sources.
- Additional data could come from subscription labor force databases such as Emsi, or labor market studies. Note that your state or regional EDO may subscribe to these services or be able to provide you with support.
- Next is to build a base of support in the community. Think broadly. This is more than just an economic development issue, or a workforce issue, so include all the key stakeholders.
- A helpful tip is to include employers to help drive the urgency of the issue and to focus on results.
- Increasingly, communities are also engaging residents more intentionally.
- Develop a thorough list of potential community assets, from operating costs, operating conditions and quality of life to other potentially unique characteristics.
- Lead a process to identify what your vision is for the community, and how you will get there.
- Building on the assets identified above, identify opportunities that could be turned into strategies.
- Examples of some strategies we have seen include pivoting to more tourism activities; leveraging nearby clusters that may have higher wages to build out supply chains; help upskill current employees; etc.
Ady Advantage has worked with over 500 economic development groups across the country, many of which are rural. Let’s start a conversation today about how your community can stay ahead of the curve! Give us a call at 608.663.9218.