Journal of Business - May 29, 2008
By Emily Proffitt
Employers face boomer retirements, recruit in California
Last month, representatives from Greater Spokane Incorporated and several Spokane-area companies traveled to Southern California looking to strike it rich. But unlike the gold rush of the 1800s, they were mining for workers, not precious metals.
In anticipation of the coming wave of baby boomer retirements, companies here say they're searching here and in other markets such as Los Angeles for employees to fill expected gaps in their work forces. One of the demographics they're particularly seeking to attract and retain is what Greater Spokane Incorporated (GSI) calls the Emerging Professional group, which includes much-coveted young adults up to 25 years old.
Spokane-area businesses say they want to find and groom young workers to assume greater leadership responsibilities after the boomers retire. One of the obstacles standing in their way, however, are companies in larger metropolitan areas such as Seattle that beckon college graduates away with the lure of higher salaries and big-city life.
"People around here hear me tell them to get ready, because it's coming," says John Sporleder, director of human resources at Liberty Lake-based Telect Inc., of the baby boomer exodus. "We're not having a problem right now, but we want to make sure we're developing a good farm club."
Telect was one of the 15 businesses here that participated in the recent GSI trip to the Los Angeles area. Amy Johnson, vice president of work-force development at GSI, says the economic-development group set its sights on that market because of a glut of highly skilled and highly trained emerging professionals and incumbent workers there.
An estimated 5,000 manufacturing, 3,000 information-services, 2,000 financial-services, and 2,500 construction jobs will be lost due to the current economic crisis in California, GSI says. The number of people willing to leave that area for jobs elsewhere hit 89,000 last year, it says. Meanwhile, Spokane County had more than 1,800 job openings in April 2007, it says.
"We're looking at areas that are graduating people with the skills that we need here," Johnson says. "Washington state is still increasing the number of jobs available, so our message to the folks down there is that we have jobs for them."
The GSI-led group held job fairs in Orange County in early April, Johnson says. The group promoted the availability of jobs, quality of life, and affordable cost of living in the Spokane area. It met with mixed results, and now GSI is creating a strategic plan on how to target its work-force and business-development efforts in that region better, she says.
"We got reactions from some student who said, ‘Are you kidding me? Why would I leave Southern California and move to Washington state?'" Johnson says. "Others said, ‘Wow, I didn't realize what that area could offer.'"
GSI also is evaluating other states with depressed economies, such as Ohio and Michigan, to see if the capabilities of their work forces match Spokane's needs.
GSI's Emerging Professionals program also is seeking to connect college students and recent graduates here to local business leaders, she says. While Spokane's growth in recent years has fostered a more vibrant economic and social environment that's attractive to young adults, recruiters still have difficulty competing with employers in cities such as Seattle and Portland, she says.
Out of 34,400 students surveyed who graduated from WSU in the last decade, the vast majority have moved out of the region, according to figures provided by GSI. Roughly 1,900 of those students have stayed in Spokane, while about 2,450 have moved to Seattle, 460 have relocated to Portland, and the remaining 29,600 have moved elsewhere. Of the 2,039 students surveyed who graduated from Whitworth University between 2004 and 2007 and still live in the U.S., fewer than 730 live in the Spokane area, GSI says.
"It's a hard sell. Young people are attracted to the excitement of the big city," Johnson says. "You get higher salaries in larger metro areas, but when you're young you don't realize that your costs go up as well."
GSI has been emphasizing to young professionals the career opportunities that await them here, particularly in fast-growing industries such as manufacturing, aerospace, and health care, she says. It also provides a "reality check" by pointing out the faster commute times, greater accessibility to outdoor recreation, and lower cost of living here compared with that in larger urban areas, she says.
Despite competition with larger cities, Spokane appears to be making strides in attracting young workers. The Spokane Society of Young Professionals, a networking group that started with six founding members in 2004, now has more than 1,000 people on its e-mail list, says co-founder Bethany Luck-Hutson. Roughly 10 new members sign up at each networking event, and many either have returned here from places such as Seattle or California or are moving here for the first time, she says. At a recent event, roughly 40 percent of the attendees said they had moved to Spokane within the past five years, she says.
Lisa Shaffer, CEO of Signature Genomic Laboratories LLC here, says at least half of the company's 68 employees fit within the emerging professionals category or did when they were hired. She says the company rarely has had to recruit workers from outside Spokane because it has found plenty of qualified applicants here.
"Most of our applicants want to stay in the area and are looking for work here," Shaffer says. "Spokane is the perfect place for us. I'll never move my company."
By the numbers
In 2007, the number of 20- to 24-year-olds living in Spokane County rose to nearly 35,800, from about 30,300 in 2000, the Washington state Office of Financial Management says. The number of 18- to 34- year-olds in Spokane County has tracked closely with the Washington state average for more than 10 years, according to the Community Indicators Initiative of Spokane at Eastern Washington University (CII). Meanwhile, the total number of degrees awarded by higher education institutions in Spokane and Whitman counties rose to more than 7,600 in 2006 up from nearly 6,400 in 2000, CII data show.
"We're educating a lot of students around here and even though a lot of people are leaving, I would suspect quite a few are staying as well," says Patrick Jones, director of the Institute for Public Policy and Analysis at EWU. "We're not in the hot water at this point."
He adds, "The brain drain is a complicated issue to analyze. It's driven by classic demographics as much as a conscious departure of that age group from this community."
People in the U.S. between the ages of 18 and 34 numbered 69.6 million in 2006, compared with nearly 119 million people ages 35 to 64, according the U.S. Census Bureau. In 2010, 40 percent of the work force will be eligible for retirement, and over the next 20 years, 50 million baby boomers will retire nationwide, GSI's Web site says. Starting in 2007, for every two employees that leave the work force, only one will enter, it says.
Companies here say that for the most part they haven't experienced a significant dearth in available workers yet but are anticipating shortages within the next decade.
Telect's Sporleder says that company typically recruits workers from the Spokane region, but could participate in more recruiting efforts in other areas in the future. While Telect uses salary and benefits as incentives, it also seeks an edge over the competition by emphasizing its workplace culture and the cutting-edge nature of its work, he says.
Phyllis Gabel, chief human resources officer at Inland Northwest Health Services here, says offering a work environment that's innovative and team-oriented is an important part of attracting younger workers. Those characteristics are inherent to INHS's information-technology department, and could be one of the reasons why positions in that department are filled quickly, she says. In contrast, it took INHS an average of 36 days to fill registered nurse positions in 2007, up from 20 days in 2005, she says.
Five years ago, INHS started looking at ways to prepare employees with leadership potential to take over senior-level positions vacated by retiring baby boomers, Gabel says. It created a succession plan and now runs internal management and leadership classes for employees.
"We're constantly trying to develop new talent," she says. "The coming retirements are still a concern, but I feel like we're addressing it now."
Paul May, CEO of Spokane Valley-based Wagstaff Inc., who participated in the GSI trip to California, says Wagstaff is looking constantly at ways to recruit employees. The company has at least 10 immediate openings for machinists, but is struggling to find qualified workers here, he says. Meanwhile, it faces a surge of retirements within the next 15 years, since 30 percent of its work force is at least 50 years old. The manufacturer is supporting programs at GSI, local high schools, and Spokane Community College that encourage young people to consider manufacturing careers.
"We're trying to grow the company and at the same time we anticipate losing people to retirement," May says. "We're forced to hire people who don't have all the skills and try to train them to the skill level we need."
Diane Quincy, director of leadership and organization development at Avista Corp., says the utility is fostering relationships with schools here to promote careers in the power engineering and energy industries. Avista offers a student employment program, as well as a lineman apprenticeship program through collaboration with Spokane Community College. It also offers an engineering rotation program, which is attractive to younger workers, she says.