Northwest Arkansas economy rich in corporate office jobs, feeds start-up firms

by The City Wire staff (info@thecitywire.com) 610 views 

Benton and Washington counties enjoy a concentration of corporate home office jobs more than seven times the national average according to U.S. Census data tables. The number of jobs related to management of corporate enterprises is 703% higher in Northwest Arkansas then the nation as a whole.

That number is so much higher than the rest of the nation because of the wide range of companies that have based their headquarters in Northwest Arkansas, from startups like Field Agent and CaseStack to legacy institutions like Tyson Foods, Wal-Mart, Simmons Foods and J.B. Hunt Transport.

Between 2001 and 2015 the number of local corporate jobs in this category — management of companies and enterprises — rose 79% from 15,091 to 25,633 according to the NAICS tables furnished by the Census Bureau. Mike Harvey, economist and chief operating officer for the Northwest Arkansas Council, said that concentration level is likely higher that the reported amount because some of the companies like Willis Shaw and P.A.M. Transport which are headquartered here could be listed in the transportation segment. Likewise, George’s Chicken, perhaps Simmons Foods and some of the Tyson management jobs could be listed in the crops and animal production employment category.

The data indicated the second highest concentration category in this region was transportation and storage at 1.73 or 173% above the national average. Agricultural crops and livestock production also trended higher at 149% the national average.

HIGHER WAGES
One thing Harvey said for certain is that number of local jobs that support home office and management operations have been a growing and important dynamic to the local economy in recent years.

The average wages in the home office employment category was $106,254 as of 2015, 134% more than the second highest average wages for wholesale trade-related jobs. Corporate office jobs paid 230% more on average than professional and technical services jobs, which are the fastest growing employment sector in the local economy. The professional services sector added more than 7,500 jobs in the past 15 years up 97%.

Stronger incomes can lead to higher-priced home construction which has definitely been the case in Benton and Washington counties in recent years. With home prices approaching $200 per foot in downtown Bentonville, Harvey said pockets across this region are out of reach for the many of those consumers near the median earnings range.

Harvey said the corporate-related management jobs have been a sweet spot for the region for many years, much like the scientific and astro-physics and engineering jobs have been important to Huntsville, Ala. – home to NASA’s Marshall Space Flight Center and the numerous vendors affiliated with aerospace research.

DOUBLE-EDGE SWORD
That said, it’s important to remember that large corporations evolve over time and the three biggest corporate giants in Northwest Arkansas also go through periods of restructuring. When that happens these higher-paying jobs can be among the first on the chopping blocks.

Kathy Deck, director for the Center of Business and Economic Research, has said corporate jobs can be a double-edged sword that can cut deeply if a region leans too heavily on one or two companies for its long-term growth. With Wal-Mart’s 18,000 local corporate-related jobs, Tyson Foods’ 3,330 or so corporate employees and another 3,149 reported by J.B. Hunt, even a 5% cutback from any of these three will ripple through the local economy.

But there are also plenty of positive results in the region from this skewed corporate workforce number. The high concentration of better-paying corporate office jobs has helped to foster the burgeoning startup activity across Benton and Washington counties.

Entrepreneur John James told The City Wire that for too long the best and brightest students graduating from the University of Arkansas were going to work at Wal-Mart, Tyson Foods or J.B. Hunt. This left a vacuum where potential innovation could not thrive. He and Terry Turpin sought to change that when they launched Acumen Brands in 2009. They grew their Fayetteville-based online commerce business to 70 employees by early 2012 and nearly 200 employees last year. James and Turpin, not only created local jobs, but they also encouraged their own workforce to innovate and were supportive of their workers branching off to do their own startup.

STARTUP SUPPORT
Rockfish Interactive in Rogers has a similar corporate culture. James Smith, owner of James & James Furniture, based in Springdale got his start at Rockfish. Today Smith is making and selling furniture all over the country and runs a retail store in Springdale.

Michael Paladino, co-founder of the growing Bentonville-based tech company Rev Unit, also got his start at Rockfish. Rev Unit, a boutique digital software development company, was launched by Paladino and his partner in 2012. The company has grown to 14 employees in the past two years.

Dan Sanker, CEO of Fayetteville-based CaseStack, said he chose to locate his logistics company in Northwest Arkansas because the region has “great people, it’s a great place to live and I think it is a good place for the kids to grow up.” On a professional level, Sanker said the local expertise in consumer packaged goods (CPG) operations, retail, sustainability and supply chain management were keenly important to CaseStack.

“With 1,300 CPG companies here, numerous supply chain companies and the University of Arkansas,  this a great place to grow our team, so we can be with the CPG and supply chain leaders,” Sanker said.

CaseStack has grown its Fayetteville office to 102 employees since opening in 2008 with more growth coming, Sanker added. Aside from its Fayetteville home base, CaseStack has offices in Santa Monica, Dallas, Chicago, Atlanta, Scranton, Pa., Manila, Philippines and Chennai, India.

“We grow where the greatest talent is,” Sanker said.

Comments

comments