In a report issued in January, West Michigan businesses identified talent as their top concern for 2019. A new forecast by a Grand Valley State University economist suggests they have the right priority.
In the first report, talent-related concerns not only topped the list but also came in at No. 3 in the Grand Rapids Chamber Government Affairs’ annual member survey. Of more than 600 regional participants, 37.7% identified their top concern as “availability of skilled labor,” while 25% listed “general talent retention.” (Cost of health care came in second, at 35%.)
Notably, “diversity & inclusion,” another talent-related topic and a priority for Talent 2025, came in fourth, at 24%.
Last week, GVSU economist Paul Isley issued some predictions for the national and West Michigan economy that lend some urgency to addressing the talent needs cited by businesses.
Recession or ‘soft landing’ for West Michigan?
In an outlook prepared in advance of the Colliers International West Michigan Economic and Commercial Real Estate Forecast, Isley restated his previous prediction of an economic downturn for the United States in late 2019 or early 2020.
The good news? Isley told MiBiz he expects West Michigan’s economy to keep growing, although at a slower pace than in recent years: “The data is still a little thin, but it looks like in West Michigan, there’s a good chance it will be a soft landing.”
Either scenario serves as a reminder for why talent needs to be a priority for our entire region.
Lessons from the past
One of the harshest blows of the Great Recession was the exodus of talent from West Michigan, when more than 49,000 residents lost their jobs in 2009 alone. Much of our talent base simply left in search of work in other regions.
But as noted in a 2010 study by the W.E. Upjohn Institute, the recession overshadowed another problem in West Michigan. Prior to the recession, in the expansion years of 2002-07, the metropolitan areas of the region failed to grow employment – in fact we lost 3,300 workers. Our ability to develop and attract talent was failing, even before the recession.
This report, along with the foresight of West Michigan business leaders that something had to be done, was the basis for the formation of Talent 2025.
Better prepared, more work to do
Fortunately, we are on stronger footing than we were in 2010. West Michigan has seen steady advances in five of six performance indicators Talent 2025 uses to benchmark our progress toward becoming a top 20 region for talent, with improvements in:
- median household income
- reducing the number of individuals in poverty
- the percentage of adults with education beyond high school
- the percentage of jobs in management, business, science and arts
- and the labor force participation rate.
Meanwhile, the sixth measure, population change, has been holding steady and not declining.
Talent 2025 and our working groups have successfully advocated for leading practices being implemented by employers, education sectors, workforce development agencies, nonprofits and funders across the region. More public investment is being directed toward evidence-based practices and strategies.
Prepare for whatever is next
And yet we have work to do if we want to avoid the same scenario we faced at the beginning of the previous decade.
The Upjohn researchers warned at the time that West Michigan faced two possible futures: accept an economic growth rate lagging the rest of the nation, or apply its history of innovation and entrepreneurship to address its talent shortcomings.
Here in 2019, with near-record unemployment, employers already are struggling to find the talent they need. In the Grand Rapids Chamber survey, 77 percent of respondents reported that they had added position due to business growth. The flip side: 67 percent said they had difficulty finding skilled talent to fill positions.
Whether we face a recession down the road, or our economy continues its expansion, the lessons from 2010 are clear: We cannot afford another talent exodus, just as we cannot afford to allow a talent shortage to hinder business growth.
Our work to date has drawn the attention of national researchers who remark on the level of collaboration they see here. Talent is a national and even global concern. West Michigan has an opportunity to lead the way in solutions.
What is your opinion of the talent outlook for 2019? Do you think employers are correct to identify talent as their top concern this year? Let us know on Twitter, Facebook, or LinkedIn.
