NWA employers surveyed plan to add 3,161 jobs by 2018, make $336 million in investments

The business climate in Northwest Arkansas is positive enough for 508 Benton and Washington county employers surveyed to say they plan to add a combined 3,161 jobs by 2018.

The chambers of commerce in Bentonville-Bella Vista, Fayetteville, Rogers-Lowell, Siloam Springs and Springdale interviewed 508 businesses in their towns as part of the Northwest Arkansas Council’s Employer Retention and Expansion survey, now in its fourth year.

The businesses also plan to invest $336 million into their operations in that same time period. One in four employers surveyed are planning an expansion, which is supported by a better overall economy and improving sales revenue among 74% of the PRIME employers surveyed. PRIME employers are businesses associated with production, distribution and headquarters operations. There were 188 PRIME employers in the survey. The remaining 320 businesses in the survey are those companies that provide support and service. Among the service and support businesses, 20% plan an expansion and 18% plan to add a second location in the next two years.

Both groups placed workforce hiring challenges as the top barrier to growth, given the tight labor force locally and nationally in many skilled areas.

“We can see the companies are positive about Northwest Arkansas and believe they’ll be able to create more jobs here, but many of the employers also acknowledge that they face some big challenges to reaching their hiring goals,” said Mike Harvey, chief operating officer of the Northwest Arkansas Council. “One of those challenges is our workforce. Just like it is in so many regions, Northwest Arkansas companies need more people with higher skills, and our region needs to take some major steps forward to help workers gain those skills.”

Harvey said economic sentiment has come a long way since the first ERE survey in 2012. He said the biggest accomplishment the majority of employers touted at that time was “survival.” Three years forward and sentiment is largely positive with the exception of workforce constraints and regulation at the federal level.

“Government regulation is an increasingly cited issue every year: The Affordable Care Act and Dodd-Frank were once again cited as major concerns for smaller businesses, along with Immigration, the NLRB Overtime Rules, Consumer Financial Protection Board, and Environmental Protection Agency regulations,” noted the report.

Harvey said the overall job growth numbers for 2015 are somewhat skewed by the J.B. Hunt expansion, but overall the upward trajectory for job growth is good, held back mostly by workforce constraints, which the entire region is working to fix.

WORKFORCE
Workforce constraints are a major concern among all the Chambers and one of the areas the Northwest Arkansas Council has focused for the past two years. Jayne Lowe, director of economic development for the Bentonville-Bella Vista Chamber, said they established a workforce council that meets once a month to discuss strategies for bridging gaps between the labor and open jobs. She said the group consists of educators, industry and parents of school children that can hold the key to a future pipeline of workers for the trades.

She said the city is also engaged in formulating a new five-year plan and parking is a major issue voiced by many of the small businesses in the business district. She said lack of infrastructure such as Internet connectivity is also a problem just a few blocks off the square because the infrastructure is old. She said the city will need to address the issues in its new plan, issues they may not have been aware of without information from the ERE survey visits.

Steve Cox, director of economic development at Rogers-Lowell Chamber of Commerce, said one of the best ways they have found to engage parents and students in discussion about the need for skilled labor jobs is to hold K-J events – Kindergarten to Jobs. He said parents and students tour manufacturing plants and speak with skilled workers to understand what opportunities there are in the skilled trades.

He said they also have events on site that provide a meal and encourage families to come and learn about the opportunities from the trades. He said high school students line the hallway with the gadgets and items they work on daily in their vocational education classes taught in Rogers’ two high schools. He said they have robots in the hallway and they show parents and kids all the cool things they get to experience in their vocational educational training.

“This has been of the most effective ways to reach parents and kids,” Cox said.

JOB RETENTION
While all the chambers would love to recruit new businesses to the region, they said keeping the ones they have is equally important. Scott Edmondson, director of economic development at the Springdale Chamber of Commerce, said American Tubing in Springdale was able to secure an $80,000 grant from AEDC last year to build a larger site and consolidate its two operations under one roof. He said finding empty space is a challenge but with the grant they were able to construct their own 40,000 square-foot building to suit their needs. This investment keeps 40 jobs in Springdale.

Edmondson said Springdale’s Workforce Council has also been successful in getting the right groups at the same table. He said educators have been receptive to changing curriculum to better match contemporary skills sets.

Harvey said earlier this week he moderated a two-day workshop on workforce education which was attended by all of the big schools in the area as well as industry. He said six of the schools shared new programs geared toward getting high school students ready for the workforce and these programs didn’t exist three years ago.

In addition to gaining information from the surveys, the visits with employers also directly resulted in new investments and new jobs for the region.

INVESTMENT
Chung Tan, director of economic development at the Fayetteville Chamber of Commerce, said one of the biggest constraints in Fayetteville is a lack of available buildings 100,000 square feet or larger.

“We have none,” she said.

During the routine employer interviews for the annual survey Tan talked with Bright Technologies, who owns 65 acres in the city’s industrial park. Tan said Bright Technology management felt confident enough to build an 80,000 warehouse for lease and worked with the chamber to find a suitable renter.

Fayetteville clothier, Lauren James was in need of warehouse space given their rapid growth. Tan said Lauren James leases half the building and has since leased 20,000 additional square feet and there has been some interest in further expansion.

Fred Valle, president and CEO of Bright Technologies told Talk Business & Politics, that real estate is one area his company likes to invest. He said with all the apartment construction in south Fayetteville in recent years, many of the warehouses have been torn down.

“We saw this as an opportunity and it’s paid off,” Valle said.

He confirmed an interest by parties to acquire the spec warehouse, but it’s only talk. He said Bright Technologies has planned an expansion in its own facility, but declined to give details. Valle also said the company looks to build more spec warehouse space, but will first focus their expansion project. Bright Technologies employs 120 workers, according to Valle.

Tan said this effort allowed Lauren James to keep all their operations in Fayetteville, which was is important to growing company.

NEW JOBS
In Siloam Springs Simmons Foods is in the midst of constructing a new wet pet food ingredient facility expected to come online in February 2017. The new facility was almost built in Southwest City, Mo., where Simmons’ other pet food business is centered.

Wayne Mays, CEO of the Siloam Springs Chamber of Commerce, said during the routine annual ERE meetings with Simmons Foods the chamber became aware of the planned project. He said the city’s wastewater treatment plant could not handle the wastewater discharges from another processing plant given that it would be headed for the Illinois River. He said the chamber and City of Siloam Springs worked together with the Arkansas Economic Development Commission to secure a $1 million grant that helped defray the cost of Simmons’ constructing a pretreatment facility onsite.

“The folks at the Chamber and City worked with us to help secure the grant and that swayed our decision to build in Siloam Springs. It creates 78 jobs, about 10 of those are salaried positions and the rest will be skilled tech and boiler operators as well as quality control and support staff. This plant is more highly automated than first run chicken plants,” Jeff Webster, Simmons’ chief operating officer for feed ingredients, told Talk Business & Politics.

Webster said the AEDC pegged the economic impact of this new facility at $50 million which can be felt in Siloam Springs, region and the state. Simmons Foods employs about 1,000 workers in the region.