The Higher ED Blog: Tough Talk from an Industry Veteran on Talent Attraction and Retention
Paul Knafelc / August 14, 2017
Is it possible not to notice that thousands or tens of thousands of people have moved to your region? Apparently so.
Over my 22 years conducting research for economic development organizations, I have observed that the appetite for comprehensive understanding of socio-economic characteristics, trends and performance is declining. In a world that is more competitive and complicated this cannot be a good thing.
I worry about communities’ ability to be successful with economic development initiatives when they lack a basic, necessary understanding of their socio-economic characteristics. Believing you have 8,000 businesses locally when there are actually 32,000 can’t be helpful. Dismissing the importance of your manufacturing sector because employment is down may be foolish. Building an industrial park for a business sector that is in steep decline seems impractical. Not realizing that your fastest growing business segment is unlikely to pay property tax may have negative consequences.
Take, for example, the proliferation of approaches aimed at getting people to move to your community. Almost every strategic economic plan speaks to the critical importance of talent attraction (and retention). This is why economic development is so heavily invested in place marketing and a plethora of attraction and retention strategies. Whether it’s the creative class, youth, families, skilled tradespersons or technology workers, the goal is to attract and retain people.
But what do communities actually know about people who move? Very little. In fact, the majority of communities lack a basic understanding of the number and characteristics of people who move in and out of their communities.
Compounding this lack of insight is the mislaid emphasis on net population change. This keen focus on net population growth widely understates the churn of people moving in and out of communities. Even regions experiencing net population loss attract people. The fact is that every community – from rural regions to large cities – attract and lose a significant number of people on a regular basis. The net number is simply the end result, which fails miserably at representing the volume, factors behind and consequences of population churn.
While primarily working in Ontario, I have found the sentiment of many communities is that it is difficult to compete for skill/talent with Toronto or Waterloo. Once again, it is a lack of understanding that contributes to this view.
As the data shows, Toronto loses far more people to other Ontario communities than it attracts. Toronto’s intra-provincial migration characteristics reveal consistent, annual net losses (a net loss of more than 25,000 people in 2014-2015 time period alone). In fairness, Toronto excels at attracting immigrants, explaining its population growth.
Turning to Waterloo Region, an analysis of people who moved (excluding immigrants) into and out of Waterloo and their employment income reveals that this region had a net loss of people who earn $60,000 or more, which is surprising if we assume that higher paying jobs are more skilled. Furthermore, Waterloo Region also had a net gain of people who earn less than $30,000. Not what you would expect based on its image.
There’s more. Communities concerned about not being able to pay “big city” wages must realize they don’t always need to. While more than half the number of people who move into a community receive a pay increase (the proportion varies from region to region), plenty of people receive a pay decrease after their move.
People move for a variety of reasons – nice place to live, proximity to family, affordable housing – not only a pay cheque.
We engage in local economic development because communities are different, and generic solutions will not work. Understanding these differences is important. For example, Sudbury is great at attracting people, but poor at retaining people. Essex is great at retaining people but poor at attracting people. Different approaches are justified, but must be built upon a solid understanding of the local socio-economic characteristics.
We have to be careful not to be swept up in conventional knowledge that is not supported by evidence. We require a comprehensive understanding of what we are trying to address. We can’t be ignorant, at least not if we want to be constructive.
About the author
Paul Knafelc is an economic researcher, as well as founder and President of Community Benchmarks Inc. As a recognized leader in local socio-economic metrics and interpretation, Paul regularly serves as a ‘consultant to the consultant’ in this regard. He has established a reputation for developing innovative data products for public and private organizations. Paul also teaches a graduate course, “Analytical tools and techniques for economic development” for the Masters of Economic Development and Innovation program at the University of Waterloo.
About the series
Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.
Established in 1987, the Master of Economic Development and Innovation (MEDI) is one of the only graduate programs in Canada focused exclusively on economic development. Students learn economic development theory and practice, and are exposed to leading edge knowledge, tools, and approaches to address contemporary challenges in cities and communities across Canada and internationally.
The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.