At a Glance
- Regions are investing heavily in talent attraction efforts. However, to sustain economic growth brought on by talent attraction efforts, it is a worthwhile pursuit for economic developers and community leaders to consider talent retention strategies.
- New residents provide a number of benefits especially as regions, and their employers, face talent shortages. Developing strong workforce ecosystems can help retain residents and the benefits they provide.
- Organizations focusing on talent retention efforts should work with employers to leverage funding to support these efforts. Key strategies they can use include collecting resident sentiment data, facilitating sense of community among family members, and creating a strong workforce ecosystem.
Cities, states and regions are heavily investing in methods to attract talent
It’s no secret and we’ve all seen it in the headlines the past couple years. Communities are investing heavily in talent attraction efforts across the United States. Tulsa, Oklahoma, Rochester, New York, and Muscle Shoals, Alabama, all stand out for the relocation incentives they specifically offer remote workers.1 These three cities are not alone. Attracting remote workers has become quite popular. MakeMyMove, for example, provides a listing of nearly 200 communities, all with incentives specifically to entice remote workers to move there. These communities have been having a lot of success with these initiatives. That is why it is important that these communities, and others who are considering talent attraction initiatives, build upon this work.
Other regions are providing relocation assistance to attract talent from across the country, and it is not just for remote workers. The need for on-site employees is just as much of a priority as the need for remote workers in some communities, if not more! The Choose Topeka initiative is a great example of this. Their incentive program partners with local employers to get talent to move to and work in the community.
These programs are worthwhile pursuits but are not without their limitations. Many of these programs are limited to the number of services they can offer. Relocation incentives can be boiled down into several categories:
- Cash incentives
- Tax breaks
- Property incentives
- Community perks
- Relocation expense reimbursement
- Membership benefits
These incentives appear to be great, but at what cost? All of this adds up fast for communities. Peoria, Illinois’ most recent initiative reportedly has a budget of, at minimum, $1.6 million for the first year. It takes a lot of public and private dollars invested in communities to move the needle forward. When they do, they need to make sure they are doing it right. And what about communities with smaller budgets? Where are they to focus their efforts for new resident support and retention?
Are they attracting the right people to the community? What kind of longevity are they expecting for these new residents? How are they tracking the new resident experience and success rate? What do these new residents truly need to be successful in their new community?
Some communities focus singularly on attraction efforts and miss the mark completely on retention, while others attempt to ensure their new residents are supported as they transition into their new community but often still lack critical pieces to this puzzle.
The Importance of New Residents in Communities
Since the COVID-19 pandemic, labor force participation rates are down nearly 1%, or roughly 1.9 million workers across the US. The U.S. Chamber of Commerce attributes this drop in labor force participation to several key causes:
- Early Retirements – The COVID-19 Pandemic led more than 3 million adults to early retirement.
- Decrease in Net International Migration – Migrant population growth from 2020 to 2021 was around 247,000, lower than the previous decade’s high of 1,049,000 from 2015 to 2016.
- Accesses to Childcare – From February to April 2020, childcare providers lost nearly 370,600 jobs and current childcare industry employment remains 10 percent lower than pre-pandemic levels.
- New Business Starts – Over the last two years, nearly 10 million new business applications have been filed.
- Increase in Savings – Several factors led to a collective increase of $4 trillion in individual savings accounts, thus allowing individuals to abstain from the labor force.
In addition, recent trends indicate that domestic relocations are increasingly motivated by personal and lifestyle reasons. Job-related moves are on the decline. This means that people are choosing where they want to live and are willing to relocate to live the life they want, in a community that they choose. They are prioritizing lifestyle preferences over jobs, yet jobs and strong workforce ecosystems are critical for communities.
New residents help grow regional economies supporting local businesses such as retailers, restaurants and bars, recreation organizations, and entertainment industries. They may also spend time volunteering with local nonprofits and donating to charitable causes. Remote workers are a unique segment of the new resident workforce that can have numerous benefits to cities and regions. They can diversify regional economies by bringing their careers, occupations, and knowledge to a community that lacks these specific talents and help promote innovation and job growth. They can also expose communities to outside businesses that may be able to provide support such as capital investment opportunities, consulting services, technology development, and other means to help regions grow their economy.
Many of the incentives deployed by regions are focused specifically on remote workers. However, a recent survey of 3,000 American managers reported that 60% of surveyed managers believe is very likely that remote employees would be the first to be laid off if downsizing became necessary. Other studies report that 89% of human resources leaders teams have voiced concerns about job security and 32% of surveyed remote workers were more likely to feel anxious in the wake of news about layoffs.
Cities that have robust workforce ecosystems can mitigate the stress harbored by remote workers and drive retention by facilitating connections with local and regional employers. To build strong workforce ecosystems, it is important to have a thriving business community that can support local workers and new residents, have educational systems that are aligned with regional business needs, have platforms and spaces where workers (both local and remote) can broaden their networks, and so much more. This has a compounding effect because regions that are more connected with their workers can better track and monitor the skills they have within their community, thus supporting business attraction efforts and other economic development endeavors.
Regardless of the current shifts in the workforce, we still see employer-facilitated relocations for on-site jobs. Communities that are home to employers who depend on the on-site workforce are advertising their communities and investing in talent attraction initiatives. We also see the communities that do not house large employers, still hungry to attract remote workers (and their families). Communities of all sorts are enthusiastic about advertising themselves to be appealing to both remote and on-site workers, in order to stimulate economic growth. This is especially true for communities that have experienced, or are projecting, stagnant or declining population trends.
Talent Attraction is Not the End Goal
Once a community successfully attracts workforce talent (whether remote or on-site) and provides the “move-here” incentives, what are they to do next to ensure those relocations are a success? Cities and states need their relocations to be a success for their communities to thrive and be resilient. Employers need their relocated workforce to avoid becoming another employee turnover statistic. Between relocation incentives, employer relocation packages, and the economic impact of these relocations, there is a lot invested in these moves. In spite of all of that, the success of those relocations boils down to the individuals and families who relocated.
When a family relocates, they completely uproot their lives, pack up their belongings and move across the country to start from scratch, rebuilding their lives somewhere new. If families receive any relocation support, it would be either through community incentives (cash and memberships) and/or logistics (household goods move from point A to B) provided in an employee relocation package. A major gap in relocation support is on the personal side…how a family settles into their new community. How their new house becomes their home. How they make friends. How they get connected and get involved. How they fall in love with this new place and want to stay there.
The top reason relocations fail is because there is a lack of support during this major life-change and the family is unable to settle successfully into their new community. We know that a spouse and family greatly influence relocations. Whether or not an employee accepts a job offer to relocate for work is heavily influenced by the confidence that the family has to move and start over somewhere new. It has to be beneficial for the entire family. Similarly, the success of that relocation, once they have physically moved, depends on the family’s ability to turn their new community into a home.
Back in May, Ashlee’s family (husband and two kids) packed up all of their belongings, loaded up a moving truck and relocated from Michigan to Texas for a great job opportunity. The whole family was excited for their next adventure and thought everything was going well. Unfortunately, after just a few short months, everything had come to a screeching halt. In the weeks and months after the move, it felt like the family was on a never-ending rollercoaster ride and they had no support to help them make this new place home. Ashlee and the kids felt sad, isolated, stuck and regretful about the move. The job opportunity was good, but not great enough for Ashlee’s husband to keep the family there. So, they decided to leave the job, leave Texas and try again somewhere else.
After residents have been attracted and moved, we think we’ve got them! They moved, bought a house, kids enrolled in school… But this isn’t the end of the story, it is just the beginning of every relocation journey. This is precisely where we see gaps in relocation support and a disconnect in community retention efforts…which go hand-in-hand.
What we aren’t seeing is the data 6 months, 12 months and 18 months+ post-move for those new residents who were sold on moving to communities with the promise of incentives, breweries, parks and four seasons. This data can help regions understand:
- What value did their incentives actually play in the long-term success of those relocations?
- Did the new residents get connected and find their place in the community?
- How long do the new residents plan to stay in the community?
- Are they rooted for the long run, or will they be moving again soon?
- What do they deem as relocation success for their families?
- What resources does the community have to get them there?
Tracking this information, over time, can help communities make better decisions on where to invest their capital.
Supporting Resident Retention
Several cities have begun shifting their focus. They understand that talent attraction efforts will only get them so far and these efforts should be supplemented by investments in talent retention. Tulsa, Oklahoma is an example of a city that has taken action. Tulsa Remote is the area’s latest talent attraction AND retention tool that you likely have already heard of by now. This initiative focuses specifically on the remote workforce. They have the typical attractive incentives in place: money, coworking space, assistance finding housing… But they are also heavily invested in new resident retention efforts. They’ve incorporated intentional community building, events, and meetups as part of their retention strategy. Furthermore, they have a whole Member Experience team in place to support the successful retention of new residents. How would we know if their retention efforts are effective? They are collecting data. Of the 2500+ ”remoters” that have moved to Tulsa as a part of the Remote Tulsa initiative, 88% have stayed in the community more than 1 year.
Even small rural communities in states like South Dakota have recognized the need to focus on retaining those new residents and talented workforce. In 2022, South Dakota saw a domestic net migration increase of 1.5%. In the same year, Texas, which for years has consistently been one of the top inbound states for domestic migrations, had a 1.6% population increase. This goes to show that South Dakota, overall, has done well attracting new residents.
Yankton, for example, is a city in South Dakota with a population of 15,000+ residents. Like many communities, they highlight and market the community to entice people to move there. What sets Yankton apart from so many communities across the nation though, is their decision to invest in new resident support and retention initiatives. Two key components in these efforts are: support resources that specifically fill the gaps in traditional relocation support for new residents, and data collection.
“Employers realize that if their employees connect to the job AND community, they are more likely to remain here in Yankton and be happier in the workplace. Human Resource directors are especially busy and tend to be the ‘go-to’ person as their relocating employees (and families) transition into the community. If our community can provide support resources that alleviate some of the stress and ease the transition for our new community members, we are happy to do so.” – Nancy Wenande, Yankton Thrive CEO
With strategic efforts customized to the community, Yankton is now able to support new residents in ways most communities do not. They are also able to track data on the new resident experience, which will help them make healthy decisions, backed-by data, on future attraction and retention investments. Furthermore, by engaging in these relocation support and retention efforts, they have solidified themselves even more as a relocation-friendly community, which they can in turn use to sell themselves in their talent attraction efforts.
Other communities have been jumping on this bandwagon, as they recognize the importance of such strategic efforts and how critical this “next step” is in their economic stability and growth.
Exploring resident retention opportunities
Consensus shows that a strong sense of community is a strong factor in resident retention. When considering how to retain residents, regions should consider two specific groups, current long-standing residents and new recently relocated residents.
Many communities use resident sentiment surveys to gain insights on residents’ perceptions of tourism and visitor experiences and how tourism impacts the lives of the residents being surveyed. What if these efforts were put into identifying residents’ perceptions of their local communities to better understand what they want? These surveys can identify perceptions of key drivers that retain residents such as local amenities, affordability, local resident support systems, sense of community belonging and help regions invest their dollars appropriately.
This work is no easy task and worth careful thought and deliberate efforts. To engage in further conversations and learn more about talent retention strategies, visit https://therelocationcompanion.com/contact/ to schedule a conversation with Rhiannon and Ben!
Authors
Ben Helkowski, Consultant, TPMA
Rhiannon Israel, The Relocation Company