Employment data is always at the top of corporate site selection evaluations. Corporate leaders need to understand the level of talent and specifics regarding various types of positions and overlaps from competing companies and industries.
One of the most misunderstood and misleading data points is the unemployment rate. By definition, the unemployment rate represents the number of unemployed people as a percentage of the labor force. Certainly, those classified as unemployed comprise a latent workforce for any incoming employer, provided that their skills and experiences match the employer’s requirements. However, relying too heavily on this single metric risks underestimating the wider potential pool of available talent. An area with an unusually low Labor Force Participation Rate may possess untapped or unrecorded labor resources that might be drawn into the workforce for the right opportunity.
Site selectors might also investigate and benefit from these prospective pools of underemployed workers:
- Students who may not be in job mode but will soon discover the need to earn. Their nascent talents may render them suitable for entry-level positions in a wide variety of employment opportunities.
- Persons working less than full-time in family businesses that need to supplement their incomes.
- Spouses of military personnel, many of whom are often highly educated and/or as highly skilled as their wives or husbands.
The U.S. Census Bureau maintains several data bases that can help analysts begin to delineate the underemployed in a search area:
- The Current Population Survey publishes detailed tables by age and sex.
- The Survey of Business Owners publishes data on individual proprietorships, partnerships, etc.
- The Decennial Census of Population counts all military service members and their family members.
What site selectors and location decision makers should take into consideration is the importance of looking past simple numbers, such as the unemployment rate, when assessing a location’s potential to sustain new jobs and investment. Of course, this advice extends beyond labor metrics, to incorporate the whole range of locational variables that will influence corporate location decisions. By doing so, we pave the way for more informed, strategic decisions that transcend the superficiality of numerical metrics, ensuring sustainable development and prosperity for both businesses and communities alike.
