Top Site-Selection Trends: A Look at 2018 & Beyond

November 15, 2018 by Midlothian Economic Development

Top Site-Selection Trends — A Look at 2018 & Beyond

This year has been full of political, economic, and technological changes which are expected to continue impacting various industries into next year.

As such, it is critical to understand the site-selection trends that are impacting decisions, and how economic development strategies will adapt going into the new year.

As we enter the fourth quarter, we evaluated the successes of these trends in 2018, and expectations for 2019. The following is a breakdown of continuing and potential site-selection trends:

Skilled Labor Shortage

The skilled labor shortage is — and will continue to be — a major challenge for employers and economic development organizations. Some research suggests there will be a surplus of 95 million unskilled workers by 2020.

Site selectors have to prove that there is still an available labor market. Initial staffing needs are critical, but feeling comfortable that a location will have a reliable stream of applicants in the future is also important. This labor shortage has many industries on edge, especially manufacturers, causing companies to more carefully evaluate where they plan to relocate or expand.

Minimum Wage

One of the most problematic issues for businesses is the minimum wage, which will undoubtedly continue to be a topic of conversation throughout 2019.

For instance, manufacturers pay about $13.63 an hour for material handlers, according to PayScale. If that wage increases to $19 an hour, what happens to the operator that was making about $18.27 an hour? Each position level will need to adjust accordingly, raising wages across the entire company.

Wages are typically one of the largest costs that businesses incur, and as wages rise, products will increase as well. Some states have been shortlisted for many businesses, but as the minimum wage increases, it opens the door for other states to be considered. For companies to relocate and find the ideal value proposition and qualified skillset, they will likely expand their search area.

Advances in Technology

While many manufacturing workers are fearful for their jobs with the influx of technology in the industry, there are many benefits to be reaped from the addition of automation and artificial intelligence.

The inclusion of new technologies has created efficiency and supply chain possibilities that were previously unimaginable. Advanced technology is not only facilitating greater productivity and lower costs, but it’s also increasing worker safety and offering many other benefits to assembly and production line workers.

For example, installing gas tanks was previously a tedious task. Today, however, a robot handles the entire process. While robotics may have eliminated one job from the workforce, it also created a new role as an added step of inspection for flaws and malfunctions is needed. Changes like this have influenced productivity and a worker’s use of time, allowing for more consistency and higher production rates.

Stay tuned as we continue to touch on site-selection trends in the remainder of 2018 and throughout 2019. What patterns have you noticed already in the fourth quarter?

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