Welcome to the latest edition of EntreWorks Insights, a quarterly newsletter that reports on business trends, policy developments, and other issues affecting the business of economic and workforce development. You’re receiving this note because you’ve asked to subscribe or because you have some previous interest in the work of EntreWorks Consulting. If you wish to subscribe or be removed from this list, please send an email to info (at) entreworks.net. If you’re interested in the newsletter, please read on. Please feel free to share with friends, family, colleagues, and other loved ones. Comments and constructive criticism (and praise) are also welcome. You are also encouraged to visit and comment on the EntreWorks blog at http://entreworks.net/blog. Thanks for your interest.
Erik R. Pages
President
EntreWorks Consulting
www.entreworks.net
HIGHLIGHTS
Attracting and Retaining Talent Post-Pandemic: Ideas for Smaller Communities
Now that the worst of the COVID-19 pandemic appears to be subsiding, pundits are opining on trends for the post-pandemic world. The “great reshuffling” is a common theme, where it is argued that Americans, especially younger talented workers, will be moving out of dense urban centers to rural places and smaller metro areas. I’m not fully convinced that we’ll see a great Migration, but I do expect that the calculus for talent attraction and retention will be different. And, that matters a great deal as talent was the number one issue for economic developers before COVID-19 hit, and it will remain so in 2020 and beyond. This issue of EntreWorks Insights offers some early ideas on what small to mid-sized metros and rural communities might consider as they develop new talent attraction and retention strategies.
Even if the projected great reshuffling is more of a minor reshuffling, the post-pandemic economy will likely prompt many younger and high-skilled workers to reconsider where they live. Many communities, especially smaller rural places stuck in demographic stasis, don’t require a major influx of new people. Even a small in-migration can have a big impact on local economies and on key institutions like schools. These new residents bring new energy, new ideas, new resources, new perspectives, and new money that can and should be a part of economic recovery and revitalization.
How to proceed? What can your community do to encourage talented people to consider relocating to your town, and, most importantly, to make the move and build a life there? Successful strategies should embrace the “3 A’s”: Attachment, Anchors and Amenities. Attachment refers to emotional connections. How can you create an emotional bond that makes people embrace your community? Anchors are core economic, physical, and social foundations that tie people to a place. They typically include a good job, housing, education, and social connections, such as church. Amenities are something like service offerings. What can people do in your community?
Let’s dig a little deeper into the 3 A’s:
Attachment
In the world of economic development, we often underemphasize the importance of emotional connections to place. Our maniacal focus on job creation means that some places have good jobs that are going begging because the community lacks emotional resonance for outsiders.
Building this kind of emotional connection is not straightforward. Most people have an emotional connection to the place where they grew up. That’s why states like Iowa and South Dakota correctly focus their talent attraction strategies on former residents. However, most places will need to think beyond simply encouraging their local diaspora to consider returning home.
An interesting new Knight Foundation/Urban Institute survey offers some useful insights about the factors that contribute to community attachment. The study focused on cities, but offers useful insights for all types of communities. Several factors proved most important in helping people develop a strong emotional attachment to their community. Not surprisingly, the most important factor was spending time there, i.e., visiting sites and amenities and engaging in community activities. These factors are especially important in determining connections between suburbs and core urban areas. Suburban residents who regularly visit and spend time in the core parts of the city are much more emotionally attached and invested in the community.
Quality of Life is also regularly cited by residents as a key factor in their location decisions. Of course, each of us defines quality of life in different ways. A city’s existing residents offer a somewhat unfocused definition, but folks who move to a new community tend to be more specific in their survey responses. Among other things, they cite access to housing and specific neighborhood amenities as the most important quality of life factors.
The basic conclusion from this research is pretty simple: attachment depends on engagement. Current or potential new residents need to participate in the life of the community. This may take a passive form of visiting sites or attending festivals and events, but it should also take more active forms of participation in community organizations and in decision making about the community’s future.
Anchors
As the term suggests, anchors are what truly connects someone to a community. Family and affinity networks, based at churches or social groups, are important anchors, but, from an economic development perspective, jobs and housing are most important.
Economic developers certainly understand the importance of jobs as that has been our primary focus for decades. Yet, the job equation is changing. Talented workers won’t move for a job alone; they seek attachment and amenities as well. This is especially true of the younger millennial and Gen Z cohorts and has been well-covered in books like The Big Sort and other studies.
Two aspects of these location decision patterns deserve attention going forward. First, we need to pay more attention to providing jobs and career opportunities to talented workers and their partners. This need is especially critical in rural regions, where labor markets may offer fewer opportunities for spouses or partners, even if one member of the couple lands an excellent job. Greater attention must be paid to creating rewarding careers for both partners. Here, as we’ll discuss further below, the rise of remote work offers tremendous promise. Rural health providers have been dealing with these challenges for many years, and we can learn a lot from their experiences.
The second set of issues relate to housing, including both affordability and the limited range of housing options available in many rural locales. Most rural places have limited housing stock that is both available and desirable for talented workers and their families who might consider relocation. A recent study estimated that only 3% of existing rural housing stock is available for purchase or rent. (The study did not assess the quality of this housing stock). In my experience, these smaller towns typically have inventory that includes a mix of low-quality entry-level housing and higher-cost high-end housing. But, they have limited inventory in the middle for new or growing families. Without an attractive place to live, talented workers are unlikely to make the big step of moving to a smaller, more rural community.
Amenities
Attachment and Anchors are the things that really matter. Amenities matter too, but they are something of an icing on the cake. Let me give a personal example. I happily reside in Arlington, Virginia, and I am regularly impressed by the quality and efficiency of government services (e.g. garbage, parks and recreation) that we receive here. I value this amenity, but I’m not sure that I would move here to get it. I’m anchored here due to a house, a job, and the fact that we raised a family in Arlington. I like getting efficient government services, but they aren’t the primary factor in my location decision. And, I probably can’t convince you to move here because our utility services are efficient.
Nonetheless, amenities like good government services, great restaurants, parks and trails, are a core part of the talent attraction/retention equation. And, as we noted above, people get attached to communities when they actively use and benefit from local amenities.
Easy access to amenities, not their simple presence, is most important to potential new residents. Here, our society’s many divides come into play, as minority residents regularly report that many local amenities, such as arts and culture events, exist in their community but are not easily accessed.
The Knight Foundation/Urban Institute survey identified a number of amenities that were deemed most closely linked to building community connections. These included a safe place, access to recreation, family amenities, and easy access to arts and culture,
Some Strategies to Consider
How can your community develop a talent strategy focused on the 3 A’s of attachment, anchors, and amenities? Here are a few ideas to consider.
- Embrace Remote Work
Attracting talent and providing rewarding work to professional individuals, couples, and families will depend to a large extent on how communities embrace and support remote work opportunities. Making it easy to work remotely must be a core part of any talent attraction strategy. Of course, this requires excellent broadband as a necessary foundation. But, more is needed.
This strategy to embrace remote work can take multiple forms. Small subsidies to help local businesses and workers move to remote work are one approach that has been embraced by Utah’s Rural Online Initiative. Providing partner and spouse job search coaching, with a focus on remote work, should also be considered. In addition, communities should market themselves as a great place to work remotely.
Some states and regions are taking this effort even further and offering direct subsidies to potential transplants. Vermont’s Remote Worker Grant Program has received a great deal of publicity, and similar programs are also operating in Tulsa and Northwest Alabama.
- Build “Third Places”
It’s likely that your existing or potential remote workers don’t want to always be remote, and are hungry for community and connection. Offering opportunities to network and connect should also be part of your policy and program mix. Communities should consider creation of local independent worker networks that include regular events, happenings, and professional development opportunities.
In addition, consider development of “third places,” such as coworking spaces or other community meeting places, where remote workers and others can connect, network, and do work. This desire to connect will likely be even stronger in the aftermath of COVID-19 so creation of a convening place can be a powerful tool to attract and retain remote workers. These spaces build community (enhancing attachment) and are an important amenity as well. I’ve recently worked in a number of small towns that are building these kinds of spaces, including the soon-opening Pantheon in Vincennes, IN and the Stourbridge Project in Honesdale, PA. These places provide essential business and workforce services, but are also intended to be a hub for the local community.
- Focus on Housing
Most small towns and rural places need more and better housing across the board. This means greater investment in housing maintenance and upgrades and in the production of new housing. This latter step will require a multi-pronged approach that will require creation of new funding streams, such as more dollars to rural Community Development Financial Institutions (CDFIs) and increased mortgage lending from rural banks, to finance new construction. Some incentives to support developers, or at least to attract construction industry talent, may also be needed. Finally, communities should review and scrub local zoning and permitting practices to ensure that local rules are not impeding new developments that are appropriate to local needs and the local landscape.
New Mexico is testing out some new ideas on this front. It has embraced the national Teacher Next Door program to develop a housing grant system for teachers. It is designed to attract teachers to rural schools by offering housing subsidies. These strategies, focused on government workers, police or fire department personnel, are gaining more traction in communities and deserve a closer look.
- Invest in Amenities
While anchors matter most, amenities deserve your attention too. This is especially true as they relate to attracting remote workers. In recent years, Boulder CO has been the US location with the highest share of remote working. I doubt that this fact relates to good broadband access in Boulder, even thought that does matter. Boulder is full of desirable amenities that make it a nice place to live. If you build a nice place to live, you’ll likely do a good job of attracting and retaining remote workers as well.
Rural communities are getting this message, and excellent programs abound across the US. The Indiana Uplands region has embraced this work in a big way via its Regional Opportunities Initiative (ROI) program which has funded a series of county-level strategies focused on quality of place and workforce attraction.
- Open up Leadership Opportunities
Attachment depends on engagement, and real engagement is about more than attending a festival or arts event. Small communities should do more to open their community leadership groups to newcomers. Far too many places have economic development boards and other leadership groups with boards that have the same rosters for decades. We need to shake things up and engage new people—from all walks of life—into community decision-making. This will create community attachment, but, most importantly, it will likely lead to better community decisions too.
What’s New at EntreWorks Consulting?
I won’t say things are “back to normal,” but we’re now engaged in some interesting and rewarding projects. This includes providing support the US Small Business Administration’s Office of Continuous Operations and Risk Management, which is helping to lead the agency’s COVID-19 response efforts. We’re also kicking off new projects in Indiana and Northeast Pennsylvania. My road-tripping work for speeches and presentations is on hiatus, but I will be teaching the North Carolina Basic Economic Development Course in early August, and will continue to post other webinars on the EntreWorks blog.
We hope to move forward with a much-needed webpage revamp and refresh in the coming months. We also continue to provide more regular news and updates at the EntreWorks blog at http://entreworks.net/blog. Recent posts have discussed scenario planning, the gig economy, and other timely issues of the day. You can also access blog updates at our Facebook and LinkedIn pages.