Site Selection Factors Series: #6 Labor Costs

April 3, 2017

PCED Staff Note: This week’s post is part of a series on evaluating site selection factors from a local perspective titled, “Site Selection Factors”. The aim of the series is to outline the criteria used by companies to determine where they will build new facilities or expand existing ones. We will examine the top 10 factors as adapted from Area Development Magazine’s, “The Top Factor’s to Navigate the Location Maze”¹. Those factors, listed in order of priority, are as follows: Availability of Skilled Labor, Highway Accessibility, Quality of Life, Occupancy or Construction Costs, Available Buildings, Labor Costs, Corporate Tax Rate, Proximity to Major Markets, State and Local Incentives, Energy Availability and Costs. Guest bloggers will contribute each week from their area of expertise. Some topics may span multiple weeks.

 To hire or not to hire?

It’s amazing how a simple phrase can start such long winded debates. I can still remember the purpose and meaning of similar words from Shakespeare’s Hamlet being greatly debated with deep contemplations in my college English class. Does such meticulous thought really need to go into this matter? Actually, it does. Especially when you consider the impact of hiring the wrong person or the wrong amount of people and how the result is multiplied by the hours of the work day and the number of individuals involved. The real issue that has this monumental impact on industries and companies is summed up in two words, Labor Cost.

Labor Cost is such a key issue that companies will purposely have locations separated by hundreds of miles to decrease expenses. While location is a factor in labor cost as well as efficiency and complexity of the task, the key factor is the search for a viable labor pool that meets the needs of the industry.

Every industry would agree that labor cost and hiring decisions are important but they are especially important to industries like manufacturing that can require a large workforce especially with non-automated operations. Labor Cost alone can be as much as two thirds of a manufacturing companies total operating costs. Since the manufacturing industry has been a large part of Person County and the surrounding areas’ economy, local employers have an imperative desire to address the factors that impact these numbers. The most common key factors that affect labor cost are the cost of recruiting, training and developing the required workforce locally.

Recognizing the opportunity to better support industry in 2014 North Carolina announced an initiative where education and workforce agencies would be partnering and working together under one banner known as NCWorks. The purpose of NCWorks is to help companies find and develop a strong workforce, by better aligning state and local services and resources to meet that goal. Companies can receive assistance often at no cost with recruiting talent to fill vacant positions and workforce training to provide education and supportive services for new, expanding and existing businesses in North Carolina.

Recruiting Talent

The hub for recruiting talent in North Carolina is the NCWorks Career Center. Through the NCWorks Career Center a company can be connected with qualified, work-ready employees. The Career Center team with other local partners can also begin building a pipeline for future talent needs as well.

NCWorks Career Center Services include:

• Job postings and applicant tracking
• Individualized screening by career professionals
• Validated skill assessments
• Coordination of job fairs
• Interview, meeting and training space
• Labor market information, including local wage data
• Workplace modifications, assistive technology, and job coaches to assist individuals with disabilities
• Tax credits and fidelity bonds to hire individuals who are qualified for open positions, but face barriers to employment

Training & Development

NCWorks provides training for new hires and existing employees through classroom, online, and on-the-job training solutions and supportive services.

On-the-job training (OJT) offers the unique opportunity to offset initial training costs for qualified skilled positions allowing companies to build organizational productivity as employees learn job requirements. The NCWorks Career Center team will assist the employer in the design of a limited duration training plan and the employer will be provided a reimbursement for a percentage of the wage rate of the qualified participant.

NCWorks Customized Training program through our network of community colleges, like Piedmont Community College’s Roxboro Campus, provides education, training, and supportive services to a company’s immediate workforce training needs. Training can include, but is not limited to OSHA Safety Training, Leadership Development, Continuous Improvement and Technical Services.

NCWorks Apprenticeship program is helping companies in all industries develop skilled talent. A specifically designed program is developed for the company that allows the employees to learn through on-the-job training and related classroom instruction.

NCWorks Resources are also available online for Employers and Job Seekers at NCWorks.gov.

Area Development, Volume 51, Number 4, Q42016, pp. 24-36.

This post was submitted by Mr. Lou Grillo, NCWorks Business Services Representative for the Kerr-Tar Workforce Development Board, and may be reached at  [email protected] for more information.