With the national unemployment rate dropping to 4.7% in April and an estimated 10.5 million jobs added over the last five years, labor markets across the United States are tightening. This makes the site selection process critical for companies seeking to relocate or expand their corporate operations such as call centers, headquarters, shared service centers, software development, manufacturing plants and distribution centers.

Companies are struggling to find the right labor market to attract and retainthe best talent in today’s highly competitive market. Site Selection Group analyzed job creation by state and industry to identify job creation trends over the last five years to help companies identify states to target during the site selection process.

13 states increased their employment by more than 10% over last 5 years
Growth is always a good thing especially when it comes to creating jobs. Utah added over 180,000 jobs over the last five years— a 14.5% increase. This put the state in first place based on growth.

“Utah continues to win a lot of higher-end professional services projects such as software development, shared services and call centers as well as distribution centers servicing the West Coast. The Interstate-15 corridor between Provo and Ogden has seen significant growth and attracted numerous companies,” explains King White, CEO of Site Selection Group.

Other notable high-growth states include Delaware, Nevada, South Carolina, Idaho, Colorado, Arizona, Florida and North Carolina. The Carolinas continue to attract companies due to their friendly  business climate and low cost of doing business, especially in the manufacturing sector. 

Most populous states added the most jobs

Despite a less attractive business climate, California led the way with the creation of over 1.8 million jobs and an 11.2% increase. California got hit really hard during the recession with a lot of lost jobs in the tech sector. With this growth, the current demand for software developers and other IT positions will make it challenging to continue such growth. In addition, the new minimum wage laws will erode most growth in lower-end occupations such as a distribution centers, manufacturing and call centers.  See last month’s blog Over half a million manufacturing, distribution and call center jobs are at risk due to California's minimum wage increase for more information.

Texas and Florida were behind California and each added approximately 1 million new jobs. These states have some of the highest migration of population from other states as well as two of the best business climates in the country. Texas won huge corporate relocation projects for companies such as Toyota and Liberty Mutual. Florida’s hospitality sector grew significantly, leading to growth in related industries such as construction.

Construction is a key driver to growth
Construction, healthcare and hospitality were some of the key industries that created the most jobs during 2015. Healthcare is a very stable industry for continued growth due to shifting demographic conditions. However, the construction sector, which was the leading industry for growth in 21 of the states, will begin to slow over the next couple of years. This could cause a potential slowdown in job growth especially in already slow-growing states.

How each state ranks based on job creation
The following table provides a state-by-state comparison to visualize which states outperformed their peers over the last five years.

Job creation comparison by state (2011-2016)

 

 

Conclusions
During times of full employment, it is more important than ever to carefully analyze a labor market before expanding an existing facility or setting up a new site. By utilizing the latest labor market analytic tools of site selection consultants, companies are able to conduct far more due diligence than in the past and ultimately make more accurate site selection decisions for their companies.

 

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