State officials have struggled for years to find an effective way to meet Utah companies’ needs for skilled workers and keep the state’s economy booming. They have discussed or implemented programs to graduate more engineers and computer experts, train high school students for certain industries while getting college educations, entice Utah college grads to stay in the state and even lure highly skilled workers into Utah.
State officials have struggled for years to find an effective way to meet Utah companies’ needs for skilled workers and keep the state’s economy booming. They have discussed or implemented programs to graduate more engineers and computer experts, train high school students for certain industries while getting college educations, entice Utah college grads to stay in the state and even lure highly skilled workers into Utah.
But the chairman of the Governor’s Office of Economic Development (GOED) board believes the answer lies in recruiting executives to the Beehive State.
During discussions about Utah’s talent shortage at prior board meetings, Mel Lavitt would bring up that point, but during the board’s June meeting, his comments were more pointed.
“The important thing, and the really key thing, is to bring in executives from out of state with their families and get them to move to Utah,” Lavitt told the board. “That is No. 1, 2 and 3.”
While other programs to address the workforce shortage are long-term, his priority requires quicker action, he said.
“Short term, if we don’t figure out how to market this state to people out of the state, so that when they have an opportunity to come here they know something positive about Utah, then we’re going to be in real trouble,” Lavitt said.
The issue arose when the board was discussing its fiscal year corporate recruitment and retention statistics and how GOED will best make its case for increased funding from the Legislature. GOED officials have said for a few years that companies’ inability to find enough skilled workers in Utah has likely hampered GOED’s recruitment efforts.
Val Hale, GOED’s executive director, said he knows of companies that are able to get high-level executives to move to Utah but then cannot transfer them elsewhere because they have fallen in love with the Utah, and they’re willing to leave the company in order to stay in the state.
Lavitt said people who have moved to Utah “love it, but it’s always been a struggle to get them here.”
Over the years, Utah has made attempts to get Silicon Valley companies to place operations in the state. Board member comments in June reinforced that approach.
“I think one of the areas that is ripe for that is Big Data,” board member Robert Frankenberg said. The former chairman and CEO of Novell is in the Silicon Valley Engineering Hall of Fame. “A lot of the [Silicon Valley] startups are now bringing product to market and can’t find the people they need or the capabilities they need in San Francisco anymore.”
Lavitt said he spoke recently to a San Francisco tech company executive considering moving some operations to Utah, and the company also is being courted by other states. “And what the CEO said, and this is his words: ‘Forty percent of the people who live in California,’ I guess around the Bay Area, ‘would like to leave.’ We couldn’t have a better time to figure this out,” Lavitt said.
Lavitt prefaced his remarks by asking if the GOED recruitment figures for the 2015-16 fiscal year represented “an opportunity to talk about what we need to market the state to bring in the high-paying, the top professionals that these companies need to continue to grow and to continue to keep their workforce in Utah? Because I think it is a problem.” He said funding from the Legislature is needed “to market the state to keep the flywheel going.”
“Otherwise,” Frankenberg added, “we can make all the investments in people’s education and then they go elsewhere. Perfect, right?”
Board members wondered if the Legislature might be apt to cut or leave GOED funding at current levels, but, they said, that does not make sense with Utah universities producing tens of thousands of graduates each year and Utah’s population continuing to grow — and all of those young people will need work.
“We’ve got to have these jobs for these kids coming out of college,” said Ben Hart, GOED’s managing director of business services. “It was just less than 12 months ago we were talking about students who couldn’t get into the workforce coming out of college and now we’re finally crossing some very important precipices. So we can’t take our foot off the gas because we’re going to see that grow at an increasing rate as these kids have kids, and their kids have kids. We have to continue to grow these jobs.”
Hart noted that Utah County had the second-highest growth rate among U.S. counties in 2015.
“That’s fantastic, but the reality is we have to create those jobs just to keep up,” he said. “So there’s a lot of ammunition for keeping our foot on the pedal right now, not the least of which is we’ve got to create a lot of high-paying jobs as well because those create multiplier jobs through our economy, which are extremely important for our wage force and the makeup of our demographics in the state.”
As for the GOED fiscal year results, the board approved 13 incentives that are designed to lead to the creation of 9,636 jobs.
“It is huge,” GOED deputy director Theresa Foxley said. “It’s actually 1,100 jobs more than any prior year, so we’re really excited about that job number. There’s some great things in these numbers and there’s some things we know we need to work on, though, as well.”
The figures were buoyed by activity last August, when a pair of incentives to solar-power companies were approved with the idea of creating more than 7,100 jobs over the next decade.
The 13 projects are expected to produce new state tax revenue of about $226 million over an average seven-year project term. New wages from the incentivized jobs is expected to be over $4 billion. “We’re really excited about that,” Foxley said. “Over a seven-year term, [that is] a lot of money circulating in our economy.”
Capital spending for the 13 projects is expected to be $305 million, relatively low because of a shift from manufacturing and industrial operations to professional services that need office space.
Foxley said she would like to boost the number of incentivized projects in the upcoming fiscal year. “We do feel good about the number of projects that we have that I think will close in the next three months, including two that should have been at this board meeting that got held up because of some local issues,” she said.