So you want to hire the best young, highly-skilled employees? You are not the first, and it is not getting any easier.
DFW has record low unemployment rates of 2.9 percent as of December 2019. The workforce gap between retiring baby boomers and up-and-coming workers is causing a labor shortage and skill gap. Large tech companies are offering aggressive compensation packages to beat out the competition. And never mind your corporate culture, workplace strategy, and proximity to hip coffee shops.
These are real challenges for business leaders that require data to make the right decision for their organization. Solutions are out there, but you need a fresh perspective using data. There are hundreds of factors to consider, such as education levels, local workforce skills, or market sustainability, but let’s focus on age for now — specifically, the demographic age group of 20 to 34.
To capture these specific labor pools, you need to understand where younger professionals live and how these populations change over time. Shortening commute times, among a variety of other strategies, is a good way to start retaining top talent. We’ll begin with a map of the DFW office submarkets, which highlights strong concentrations of populations aged 20 to 34.
The top three office submarkets with the highest percentage of people age 20 to 34 are Downtown Dallas (52%), Uptown (45%), and Las Colinas’s Urban Center/Wingren (40%). Although these three submarkets are uniquely positioned to capture a high percentage of younger populations, we need to dig deeper.
Now let’s overlay Class A office buildings to create a relationship between workforce and real estate.
Populations of young people cluster far and wide across DFW. Hot spots include the obvious areas such as Uptown, Downtown Dallas, and neighborhoods surrounding major universities, but they also cover areas such as Arlington and Las Colinas. Although all of these areas are populated with young people, it’s important to understand the major differences in workforce availability these areas have, depending on your business case.
Next, we need to factor in time and how these populations have shifted throughout the market. Comparing historical data to projected data adds value to future long-term real estate contracts. If a company is considering a longer-term lease, then understanding if there will be a nearby sustainable labor pool in 7 or 10 years is critical.
Growth patterns seem to follow a common trend in DFW: the suburbs are booming. If you take the time to zoom in on Dallas’ urban core, you will notice that zip codes near Uptown and Downtown still see positive growth.
The last thing to consider is how DFW compares to other markets. The ability to scale data visualizations is critical in commercial real estate, especially for larger national companies who are considering entirely different markets for cost savings, diversification, or accelerated growth and hiring.
The top markets for population growth between 2015 and 2020 for people ages 20 to 34 include:
- Dallas-Fort Worth, TX MSA (+134,180)
- Atlanta, GA MSA (+98,062)
- Phoenix, AZ MSA (+81,484)
- Houston, TX MSA (+66,676)
- Seattle, WA MSA (+65,601)
This map highlights the common theme that people are overwhelmingly migrating to larger metros, which leaves many tertiary markets to fend for themselves. Although this is not always the case (Chicago, New York City, and L.A. markets all had negative population growths in this category), these mass migrations to high-growth metros could create cost of living inflation and commute issues in the future.
Attracting young, talented employees to grow your business takes focused efforts from multiple different directions and departments. In this example, the research looked at only populations of people age 20-34. Most business cases will have various factors that will be examined at both the micro and the macro geographic level. Thus, businesses need a greater understanding of public and proprietary datasets, the ability to utilize and scale spatial data, and the skill to create visual narratives to make location-related decisions confidently.
Your challenges to grow your business, hire the best talent, or strategically locate your facility are not unique. But your approach needs to be. Connecting the dots between people and places is the new norm in commercial real estate.
Data Sources: Emsi, CoStar, Experian, Bureau of Labor Statistics, Cresa Data Intelligence
Hunter McGuinness, Vice President – Consulting Services, is based in the Dallas office of Cresa. He focuses on business intelligence and spatial analytics that help drive intelligent location strategies from an occupier-only perspective. His work is proven to reduce risk and save money on projects by leveraging data.