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Most Pressured Metro Areas for Seasonal Distribution Employment

by Josh Bays, on Sep 26, 2017 11:39:35 AM

One of the most difficult tasks companies face when seeking to locate a new distribution center is assessing the impact of seasonal employment. Site Selection Group, a full-service location advisory, economic incentives, and real estate services firm, evaluates the supply and demand dynamics of seasonal employment in the distribution center sector to understand competitive pressures our clients can expect to face.

Many of Site Selection Group’s clients are forced to scale their workforce on a seasonal basis, sometimes as much as quadruple their normal headcount. Regardless of their intended hiring plans, the clear majority of Site Selection Group’s clients want to avoid metro areas with excessive competitive pressures caused by strong fluctuations in seasonal employment. In addition to diminishing supply of workers, seasonal fluctuations can have a negative impact on turnover, labor rates and productivity.

Assessing seasonal workforce trends early in the site selection process
Since the most reliable way to assess seasonal pressures is by conducting primary research via employer interviews. Assessing seasonal workforce trends early in the site selection process can be a difficult task due to the large number of candidate geographies in contention. However, a prudent community filtering model should include some proxy for seasonal pressures. Site Selection Group favors evaluating job postings over a set time period to provide valuable intelligence on what distribution center employers can expect for the upcoming seasonal ramp-up.

Site Selection Group evaluated seasonal workforce pressures in the 100 largest distribution employment markets. Specifically, the number of job postings for distribution occupations from August-October 2016 relative to total 2016 distribution employment was compared to the same figures from May-July 2017. In summary, this identifies metro areas with higher growth in job postings relative to the employment base. The table below shows the 20 metro areas with the highest absolute change in the job postings to total distribution employment.

Most Pressured Metro Area for Seasonal Distribution Employment

Metro Area 2016 Seasonal Peak Postings:
Jobs Ratio 1
2017 Non-Peak Posting:
Jobs Ratio2
Absolute Increase in Postings:
Jobs Ratio
Portland-South Portland, ME 9.52% 0.35% 9.17%
Salt Lake City, UT 7.41% 0.03% 7.38%
St. Cloud, MN 8.50% 1.24% 7.25%
Washington-Arlington-Alexandria, DC-VA-MD-WV 6.81% 0.11% 6.70%
New Haven-Milford, CT 7.17% 0.79% 6.38%
Portland-Vancouver-Hillsboro, OR-WA 6.47% 0.11% 6.37%
Springfield, MO 6.21% 0.07% 6.14%
San Francisco-Oakland-Hayward, CA 6.25% 0.30% 5.95%
Roanoke, VA 6.21% 0.53% 5.68%
Scranton--Wilkes-Barre--Hazleton, PA 6.33% 1.54% 4.79%
San Jose-Sunnyvale-Santa Clara, CA 5.63% 0.85% 4.77%
San Antonio-New Braunfels, TX 5.57% 0.83% 4.74%
Wichita, KS 5.79% 1.05% 4.74%
Cincinnati, OH-KY-IN 9.67% 5.14% 4.53%
Urban Honolulu, HI 4.56% 0.14% 4.41%
Sioux City, IA-NE-SD 4.87% 0.54% 4.33%
Spartanburg, SC 6.50% 2.22% 4.29%
Seattle-Tacoma-Bellevue, WA 4.80% 0.82% 3.98%
Spokane-Spokane Valley, WA 4.10% 0.37% 3.74%
Colorado Springs, CO 8.02% 4.69% 3.34%

Source: EMSI

Several of the metro areas that seem to have higher pressures of seasonal employment are intuitively known as markets synonymous with distribution-related activities. While this proxy  should not be used when evaluating a single market, it is a reliable way to draw relative conclusions when evaluating a long list of markets.

Job postings data should not be a substitute for primary research
The most reliable method for accurately assessing the pressures of a seasonal workforce is from testimony derived from companies already operating in the region. Although subjective in nature, their feedback can be the last determining factor when drawing distinctions between two semifinalist locations. This primary research accompanied by an experienced site selection provider that can leverage past experience can be invaluable to mitigating future hiring risks.

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Topics:Distribution Centers

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