Y’all Come Back Now, Y’hear? (Gwen Moritz Editor’s Note)

by Gwen Moritz on Monday, Aug. 27, 2018

I traveled to Jonesboro last month with my boss and several coworkers for lunch and conversation with several local business executives. It was one of those things that had been on my calendar for weeks, and I wasn’t enthusiastic about the drive — but I left energized and intrigued.

We gathered in the enviable new offices of Haag Brown Commercial Real Estate & Development, where Josh Brown’s office is fitted with garage-type doors that lift up to access a balcony overlooking a pond. It’s good to be Josh Brown.

The general discussion will eventually be featured as part of BKD LLP’s sponsored CEO Roundtable series similar to the one on Pages 20-21 of this issue. A common concern, one that I hear from almost every business executive I talk to regardless of industry, is the shortage of skilled employees. Brown made a practical, counterintuitive suggestion: Instead of putting time/effort/money into attracting new industries, Jonesboro needs to attract more residents to fill job vacancies that are already there.

With a local unemployment rate of 3.5 percent, many long-established corporate citizens are missing out on revenue because they simply don’t have the warm bodies to make more sales or produce more work product.

Brown tells me that there are probably 1,000 “primary” jobs aching to be filled in Jonesboro, and those would generate hundreds more service jobs. Recruiting a single new plant employing that many would be a massive economic development accomplishment, but it would also mean cannibalizing gainfully employed workers from existing businesses who are already poaching talent from each other.

I have to wonder: Could Arkansas’ stagnant GDP — growing only 0.7 percent over the past four quarters, compared with a national average of 2.6 percent — reflect opportunities missed because too many jobs are unfilled?

(Michael Pakko, the state economic forecaster at the University of Arkansas at Little Rock’s Institute for Economic Advancement, noted on his Arkansas Economist blog that Arkansas’ GDP was absolutely flat — zero growth — in the first quarter of 2018. Only North Dakota, with a decline of 0.6 percent, had a worse 1Q. The second quarter was strong nationally, but state-level GDP for the second quarter won’t be available until November.)

The first hurdle to filling jobs in Jonesboro is to get prospects to actually visit the city. This is a problem common to all of Arkansas, even the booming northwest. Last fall, the Seattle Times published a Bloomberg story under a headline that reflected a direct quote from a Penn State student from Connecticut: “Wal-Mart tries to recruit Ivy Leaguers who view Arkansas as a deal breaker.”

The executives I talked with in Jonesboro expressed some frustration that too few graduates of Arkansas State University stay in the area, but I think the desire to land someplace new and different — and generally bigger — is also a common phenomenon.

That doesn’t mean they have to be gone forever. HR professionals in Arkansas have long realized that the easiest recruits are those who already have a tie to the state — people like me, 19 years ago, when I was lured back home after a 10-year sojourn in Nashville, Tennessee. It doesn’t take a decade to realize that bigger isn’t necessarily better, especially if too much of one’s life is spent sitting in traffic.

So how would a city like Jonesboro, or an entire state, go about attracting new residents or bringing back former Arkansans? Arkansas’ population has been growing, but much slower than the national average. We’ve traditionally tried to lure retirees, and they and their out-of-state dollars are always welcome, but that’s not what Josh Brown was talking about. Detroit has had some success in luring expatriates home to try to revitalize a city hollowed out by the car-making diaspora, but that effort has also been aimed at luring new industry to fill the void. That seems even harder.

If luring in private industry is accepted as a government function — and that boat sailed long ago — could luring in residents be an appropriate investment of tax dollars in support of existing industries? Brown is in the real estate industry, so he has ideas for lifestyle amenities that would be attractive to new residents, especially younger families. But I’m also thinking about direct recruiting, like filling up buses of welding students or accounting students and treating them to a weekend in a potential new hometown.

I’d love to hear other ideas.

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Article via Arkansas Business by Gwen Moritz | Monday, August 27, 2018