A readily available workforce continues to move up the list of the most important site selection criteria for distribution center requirements. Whether it’s an end-user looking to establish a new distribution hub, or an industrial developer planning for its next speculative building, all interested parties want to know they can fill that building with a skilled workforce. 

Site Selection Group closely analyzes workforce trends in the distribution center industry.  Monitoring these trends is not only important for Site Selection Group’s clients that are active in the distribution center industry, but also allows us to assess the pressures that increased hiring can put on the production sector and the labor market at large.  

Metro areas with the highest growth in demand for distribution labor

One key component of Site Selection Group’s analysis is examining real-time job postings data from across the country to identify where growing distribution employers are looking for workers. Site Selection Group identified the top U.S. metro areas for growth in distribution center job postings from the past 12 months (November 2016-October 2017) compared to the preceding 12 months. This analysis gives an indication of those markets that are becoming more competitive every day.  Because this data can be volatile, Site Selection Group identified which metro areas saw their share of overall national hiring for these positions grow and which ones saw their share fall. The top 20 demand growth markets are shown in the table below:

Top 20 Metro Areas with Highest Growth in Distribution Center Job Postings

(November 2016 to October 2017)

  Metro Area Overall Growth
  Reno, NV 49.30%
  Greenville-Anderson-Mauldin, SC 38.20%
  Atlanta-Sandy Springs-Roswell, GA 33.70%
  Denver-Aurora-Lakewood, CO 30.70%
  Baltimore-Columbia-Towson, MD 30.10%
  Nashville-Davidson--Murfreesboro--Franklin, TN 26.80%
  Portland-Vancouver-Hillsboro, OR-WA 26.20%
  Cincinnati, OH-KY-IN 24.90%
  Richmond, VA 24.10%
  Indianapolis-Carmel-Anderson, IN 23.80%
  Austin-Round Rock, TX 21.80%
  Minneapolis-St. Paul-Bloomington, MN-WI 21.30%
  San Antonio-New Braunfels, TX 19.80%
  Jacksonville, FL 19.40%
  Chicago-Naperville-Elgin, IL-IN-WI 19.40%
  Raleigh, NC 18.90%
  Washington-Arlington-Alexandria, DC-VA-MD-WV 18.70%
  Seattle-Tacoma-Bellevue, WA 18.10%
  Allentown-Bethlehem-Easton, PA-NJ 16.80%
  Columbus, OH 16.50%

 Source: EMSI/Career Building – Growth in Share of National Unique Job Postings for Material Moving Workers – November 2015-October 2016 to November 2016-October 2017

As expected, the analysis shows many of the “usual suspects” for growth in the distribution sector like Reno (for California), the Upstate of South Carolina, and fast-growing metro areas like Atlanta, Denver, and Nashville.  In addition, major, centrally located distribution hubs such as Cincinnati and Indianapolis are high up on the list. To a lesser extent, Mid-Atlantic markets — including Baltimore and Washington, D.C. —have also shown high growth.   

Growth and tradeoffs on the periphery of major markets

Due to land and real estate constraints, in addition to following growing populations, distribution center growth and subsequent demand for workers is oftentimes concentrated on the periphery of major metro areas.  For example, growth within the Atlanta metro area is much higher in Gwinnett County (+63.5%) and Cobb County (+51%) than in more centrally located Fulton County (+33.3%).  The same is true in the Cincinnati metro area, for example, with much higher growth in Butler County, Ohio (+54.6%) and Boone County, Kentucky, (+43.6%) compared to central Hamilton County, Ohio (+15.2%). 

There are tradeoffs, however, with many of these suburban and exurban markets. While there are typically more optimal real estate conditions and access to end-consumers in those locations, the supply of a targeted distribution workforce can be limited.

In short, many of the new suburban rooftops near these distribution centers are inhabited by middle and high-income households less aligned with the workforce profiles of most distribution center job descriptions. Oftentimes suburban locations that abut outlying satellite communities that are more aligned with the demographic and occupational makeup of a distribution center can offer the best of both worlds – access to real estate and consumer end-users along with an aligned workforce traveling in from further afield to staff the operation. 

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