Employers must continue creating jobs to help Northwest Arkansas remain one of the nation's fastest growing regions, local business leaders said.
IHS, an information and analysis firm, released a report last summer that ranked the region as the United States's third fastest growing economy through 2020, with an annual growth rate of 4.2 percent.
Christie Swanson can be reached by email at cswanson@nwadg.com or on Twitter @NWAChristie.
The metropolitan statistical areas's workforce was 224,509 people at the end of 2014, up 14 percent in the past decade, according to the U.S. Bureau of Labor Statistics. The nation's workforce grew 5.5 percent and the state's by 3.1 percent.
The Northwest Arkansas metropolitan statistical area includes Washington, Benton and Madison counties in Arkansas and McDonald County, Mo.
New Geography, an analytics firm, last year ranked Northwest Arkansas as the 10th best midsize city for job growth; CareeBuilder placed the area in the fifth spot of its Labor Market 150 Index; and economic research firm Policom ranked the metropolitan statistical area 45th out of 381 in its most recent Economic Strength Ranking.
The IHS report, created for the U.S. Conference of Mayors, also ranked Northwest Arkansas in the top 10 for real gross metropolitan product growth in 2013, posting a rate of 3.8 percent. Gross metropolitan product is the measure of the total output of goods and services within a given area.
Northwest Arkansas also benefits from its large number of younger workers, said Mike Harvey, chief operating officer of the Northwest Arkansas Council.
One indicator of economic success is a region's ability to recruit and retain people ages 25 to 44 because they are an important part of the area's workforce and its innovators, according to the council in its Greater Northwest Arkansas Development Strategy report released in January.
The area's 25-44 age group grew 8.2 percent in the past five years, faster than the rate in other regions or the United States as a whole, the report stated. The Brookings Institution, a nonprofit research firm, reports 1-in-3 adults will be a millennial by 2020. Millennials are in the group born between the early 1980s and early 2000s.
The region ranked 10th in the percentage of employees aged 22-34 years, according to data firm Economic Modeling Specialists International, a CareerBuilder company. Employers added 2,526 millennials to payrolls between 2007 and 2014, taking employment to 69,212 or 30 percent of total workforce.
Millennials' workforce percentage ranged from 36.8 percent in Provo, Utah, to 23.1 percent in Youngstown, Ohio.
"The challenge for us is keeping those millennials here," Harvey said. "Attracting people to the area under age 30 is always a challenge because you have competition with bigger areas."
Marketing and branding the area will play an important role in attracting new talent, said Ted Abernathy, managing partner of Economic Leadership and a consultant on a couple of regional plans. He said it's not just the message itself, but how that message is amplified that matters. Options include advertising in certain markets and editorial content in trade magazines, he said.
"Northwest Arkansas is still relatively unknown as a place for jobs and a high quality of life," he said. "Most people that come to Arkansas are surprised by all the amenities."
Harvey said recruitment gets easier as the area continues to add amenities, such as the 37-mile Razorback Greenway, Crystal Bridges Museum of American Art, Walmart Arkansas Music Pavilion or Arvest Ballpark, home of the Northwest Arkansas Naturals minor league baseball team.
One obstacle the region faces is finding enough workers with skills that match up with job openings, Abernathy said.
"When you look nationally, the number one issue is workforce development. It's trying to make sure the skills meet the needs," he said. "We are in a transitional point in America."
He called the job market a moving target as job descriptions are constantly changing and requiring different skills.
Groups including the Northwest Arkansas Council and local chambers of commerce are addressing the worker training issues.
The council released a pair of reports this year that state the area needs more and better trained workers. The council's Employer Retention and Expansion survey outlines initiatives that would help high school students learn about employment options not requiring a four-year degree and teach them life skills employers want. The plan would also be aimed at attracting and keeping workers through an increased social media and trade show presence.
The Fayetteville Chamber of Commerce each year organizes tours of local manufacturing facilities for high school students. The Rogers-Lowell Area Chamber of Commerce last year started K2J Connect, a program designed to bring educators and manufacturers together.
"The workforce is becoming a bigger and bigger issue here in Northwest Arkansas, and part of our role as a chamber is to address those needs," said Steve Cox, the Rogers-Lowell chamber's vice president of economic development.
The Northwest Arkansas Education Service Cooperative hosted a meeting earlier this month that brought together high school and postsecondary educators, business leaders and the Northwest Arkansas Economic Development Council to improve career and technical education programs.
Northwest Technical Institute recently started a new, 10-week class to train people to become computer numerical control operators, or CNC's. The class met for three hours twice a week and costs $400.
Abernathy said reports such as the council's Employer Retention and Expansion survey help identify areas that need help. Chamber representatives conducted 487 confidential interviews with area businessmen. Nearly half reported trouble filling open positions because of a lack of skilled production labor. About 20 percent said they needed scientific and technical workers.
Greg Fogle, president of Midwest operations for Nabholz Construction Services, said increased area building activity has made finding qualified workers a bit more difficult. Nabholz is looking to hire eight to 10 people from its Rogers office, including skilled craftsmen to project managers, he said.
"We start looking before we need them. It's not impossible finding workers, but it is harder than in the past," he said.
The construction industry, along with professional and business services, health care, skilled trades and hospitality fields, show a lot of job growth potential, according to Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas.
Real estate agent is a professional service occupation showing year-over-year growth. There were 1,849 real estate agents making at least one sale last year, compared to 1,700 in 2013, according to MountData, a real estate marketing firm.
"Bright spots are almost everything except our trade and transportation sectors, which are lagging at the moment," Deck said.
The trade, transportation and utilities sector makes up 21.8 percent of the area's total employment with 48,300 workers. Employment was down from 49,600 in December 2013.
Deck said the loss in the region's core sector is keeping good employment numbers from being great. The area lost jobs in retail and wholesale trade and transportation. Nearly half of December's lost jobs were in transportation.
Those losses occurred at Wal-Mart Stores Inc., its vendors, and trucking and logistics companies.
Cameron Smith, owner and founder of executive recruitment firm Cameron Smith & Associates in Rogers, said there are 1,488 Wal-Mart supplier teams with offices in Northwest Arkansas employing more than 6,000 people. He said his firm placed more than 300 workers in jobs last year.
"We are a tad slower than normal, but it's always been pretty steady," he said. "We had a record year last year."
Smith said placing top executives -- including presidents, CEOs, chief financial officers and chief operating officers -- makes up about 15-20 percent of the company's total revenue.
"Corporate management is a driver in this region. It has grown 30 percent since 2010," he said. "The post-recession rebound in that particular area has been very good."
Professional and business services rank as Northwest Arkansas' second largest employment category, employing 41,800 people in December, or nearly 19 percent of all jobs. That's 800 more than the year before.
Professional and business services include a wide swath of jobs including legal services, accounting, computer systems design, consultation, advertising and management.
"The vendor community is a stalwart of our economy and those kinds of jobs are going to be created. That is what differentiates our area from other places our size," Deck said.
Ryan Hunt, spokesman for CareeBuilder, said Northwest Arkansas was able to grab the fifth spot on its Labor Market 150 Index in part because of it's high quality employment ranking.
Like Smith, Hunt calls corporate management "the area's driver industry."
"The post-recession rebound in that particular area has been very good," he said
Harvey said he hopes manufacturing employment can at least hold steady as industries become more efficient and need fewer workers. Manufacturing counts for nearly 12 percent of the area's total workforce, with 25,400 employees at the end of last year. The area lost 200 manufacturing workers in a year's time. Manufacturing is down about 21 percent from 2004.
"A business that makes something brings money into a community," he said. "A lot of these support jobs would not be here without manufacturing."
NW News on 03/29/2015