Workforce Trends Impacting Distribution Center Site Selection Strategies in 2020
by Josh Bays, on Feb 25, 2020 8:30:35 AM
To help our clients be certain they can meet their hiring needs, Site Selection Group, a full-service location advisory economic incentives and real estate services firm, evaluates and monitors talent trends in the distribution and warehousing sector. Whether a company is hiring 200 or 2,000 employees, assessing a community’s pool of available distribution workers is as critical as ever in identifying the optimal location for new site selection projects. Despite unprecedented investment in increased automation, distribution centers continue to be labor intensive.
Distribution workforce growth occurring throughout the country
Looking forward to the next five years, the data suggest geographic diversity in distribution occupational growth. However, it is apparent that metro areas in Arizona, Nevada and Utah seem to be the beneficiaries of the “ABC” strategy folks in industrial site selection “joke” about. “ABC” has become an informal term for “Anywhere But California” while still preserving the ability to serve the population bases of Southern California and the Bay Area.
Top 20 Metro Areas for Distribution Talent Growth 2020-2025
| Metro Area | 2020-2025 Projected Occupation Growth |
|---|---|
| Austin-Round Rock-Georgetown, TX | 11.3% |
| Salt Lake City, UT | 11.2% |
| Las Vegas-Henderson-Paradise, NV | 10.6% |
| Phoenix-Mesa-Chandler, AZ | 10.1% |
| Nashville-Davidson-Murfreesboro-Franklin, TN | 9.9% |
| Ogden-Clearfield, UT | 9.8% |
| Denver-Aurora-Lakewood, CO | 9.7% |
| Stockton, CA | 9.4% |
| Reno, NV | 8.8% |
| Jacksonville, FL | 8.2% |
| Riverside-San Bernardino-Ontario, CA | 8.2% |
| Savannah, GA | 7.9% |
| San Antonio-New Braunfels, TX | 7.8% |
| Dallas-Fort Worth-Arlington, TX | 7.7% |
| Orlando-Kissimmee-Sanford, FL | 7.4% |
| Charleston-North Charleston, SC | 7.4% |
| Grand Rapids-Kentwood, MI | 6.8% |
| Allentown-Bethlehem-Easton, PA-NJ | 6.4% |
| Charlotte-Concord-Gastonia, NC-SC | 6.4% |
| Seattle-Tacoma-Bellevue, WA | 6.2% |
Overall increase in job posting activity
Job postings data reveal insights into demand for labor within material moving occupations. Site Selection Group utilizes online job postings data via EMSI and CareerBuilder to evaluate labor demand conditions within the sector. The table below shows the top 20 markets with the greatest change in demand for distribution workers over the past year.
Top 20 Metro Areas with Highest Growth in Material Moving Occupation Demand
| Metro Area | Avg. Unique Postings (February 2018 - January 2019) | Avg. Unique Postings (February 2019 - January 2020) | One Year Change |
|---|---|---|---|
| Seattle-Tacoma-Bellevue, WA | 588 | 930 | 58.2% |
| Las Vegas-Henderson-Paradise, NV | 106 | 160 | 51.5% |
| Providence-Warwick, RI-MA | 165 | 243 | 47.0% |
| Scranton-Wilkes-Barre, PA | 122 | 173 | 41.9% |
| Portland-Vancouver-Hillsboro, OR-WA | 423 | 600 | 41.8% |
| Cleveland-Elyria, OH | 247 | 334 | 35.3% |
| Austin-Round Rock-Georgetown, TX | 170 | 230 | 35.1% |
| Raleigh-Cary, NC | 135 | 182 | 34.6% |
| Dayton-Kettering, OH | 103 | 138 | 34.2% |
| Madison, WI | 130 | 174 | 33.9% |
| Chicago-Naperville-Elgin, IL-IN-WI | 1235 | 1631 | 32.1% |
| Milwaukee-Waukesha, WI | 233 | 307 | 31.9% |
| Omaha-Council Bluffs, NE-IA | 153 | 201 | 31.6% |
| Akron, OH | 111 | 146 | 31.0% |
| Columbus, OH | 443 | 576 | 30.0% |
| Richmond, VA | 143 | 186 | 29.4% |
| Virginia Beach-Norfolk-Newport News, VA-NC | 161 | 207 | 28.8% |
| St. Louis, MO-IL | 293 | 369 | 26.1% |
| Phoenix-Mesa-Chandler, AZ | 399 | 502 | 25.8% |
| Cincinnati, OH-KY-IN | 419 | 527 | 25.7% |
Northeast and Midwest experiencing higher posting intensity
Posting intensity, that is, the average number of times the same job will appear on different job boards, is another way to measure demand for labor. In short, if companies place their job postings on, for example, 10 boards instead of five, it indicates they are working harder to find talent – one sign of a tightening labor market. The table below shows the top 20 markets that experienced an uptick in job posting intensity over the past year. While last year, increases in posting intensity were concentrated in markets in the Northeast and Midwest, this year the growth is more widespread.
Top 20 Most Competitive Metro Areas for Distribution Jobs
| Metro Area | Avg. Posting Intensity (February 2018 - January 2019) | Avg. Posting Intensity (February 2019 - January 2020) | One Year Change |
|---|---|---|---|
| Detroit-Warren-Dearborn, MI | 5.21 | 7.31 | 40.3% |
| Dayton-Kettering, OH | 4.26 | 5.92 | 38.9% |
| Winston-Salem, NC | 5.35 | 7.33 | 37.0% |
| New York-Newark-Jersey City, NY-NJ-PA | 4.77 | 6.46 | 35.5% |
| Ogden-Clearfield, UT | 5.45 | 7.34 | 34.6% |
| York-Hanover, PA | 6.37 | 8.29 | 30.0% |
| Seattle-Tacoma-Bellevue, WA | 6.42 | 8.34 | 29.9% |
| Portland-Vancouver-Hillsboro, OR-WA | 6.90 | 8.96 | 29.8% |
| Milwaukee-Waukesha, WI | 5.88 | 7.61 | 29.6% |
| Savannah, GA | 4.97 | 6.44 | 29.5% |
| Minneapolis-St. Paul-Bloomington, MN-WI | 6.75 | 8.64 | 27.9% |
| Greensboro-High Point, NC | 4.98 | 6.36 | 27.8% |
| Knoxville, TN | 7.19 | 9.07 | 26.2% |
| Scranton--Wilkes-Barre, PA | 5.40 | 6.78 | 25.6% |
| San Antonio-New Braunfels, TX | 5.96 | 7.45 | 25.0% |
| Boston-Cambridge-Newton, MA-NH | 5.56 | 6.94 | 24.9% |
| Memphis, TN-MS-AR | 8.47 | 10.57 | 24.8% |
| Tampa-St. Petersburg-Clearwater, FL | 4.92 | 6.13 | 24.8% |
| Salt Lake City, UT | 6.06 | 7.49 | 23.5% |
| Toledo, OH | 6.41 | 7.91 | 23.4% |
While the information above provides useful insight into real-time labor market conditions, it is only one part of establishing a balanced and substantive assessment of a market. Site Selection Group works with its clients to develop a balanced analysis utilizing data from many diverse sources to identify the optimal labor market for distribution centers from a macro perspective, to avoid the risk of locating in a sub-optimal market.
Sources: EMSI/CareerBuilder. Average monthly postings and average posting intensity (i.e. total online postings of one particular job) for Material Moving Occupations. List filtered to include only those metro areas with at least 100 average job postings in the time frames analyzed to prevent small market outliers.
