At the end of each evening in early fall 2017, Michael Flynn walked over to the whiteboard in the research and marketing department to tick one of the 40 boxes he’d drawn as a deadline-countdown.
Then the chief operating officer of the Economic Development Corporation of Utah would turn to his team in their cubicles and ask, “How far did we get today?”
The 17 employees of EDCUtah, based in downtown Salt Lake City, had just six weeks to prepare a proposal for Amazon HQ2, the company’s nationwide search for its second headquarters. Salt Lake City was but a David against such metropolitan Goliaths as New York and Atlanta, but the Beehive state’s government officials were determined to give it their best shot.
Utah didn’t make the 20-city shortlist announced in mid-January 2018. Nevertheless, it came out a winner by creating a game-changing tool called the Labor Stack. The tool addresses the key question a company asks when looking to relocate: Will I be able to hire everyone I need?
The traditional way for EDCUtah and many other economic development organizations to answer this question is to pull information on total employment and wages for the state. With the Amazon proposal, fondly named Project BOAT (Biggest Of All Time), EDCUtah’s staff knew it would need more than a basic labor analysis to prove that Utah was the right choice for HQ2. “There’s not a lot of innovation in the economic development industry,” says Matt Hilburn, EDCUtah’s VP of research and marketing. With the Labor Stack, EDCUtah set about changing that.
The Labor Stack was the brainchild of COO Michael Flynn. In business, capital stack graphs are used to visually represent sources of capital investment. “Can we do something like that for labor to show where it would come from?” Flynn mused.
Amid long nights, weekends, and countless pizza runs while working on the HQ2 proposal, Hilburn took on the assignment of building the Labor Stack. As far as EDCUtah knew, this would be a first-of-its-kind approach to analyze a community’s labor environment as it relates to a specific relocation project. He dove deep into the Bureau of Labor Statistics website to identify what jobs are needed at a headquarters facility and what percent each job made of the total employment for the industry. Next, he contrasted those numbers with the available labor in each profession in Utah. He then analyzed the demand and natural growth in each position to identify how many jobs would be left over—surplus or deficit—to fill vacancies for Amazon.
Along with the Labor Stack demonstrating that there would be sufficient labor available, Hilburn also needed it to show where a company could find that labor. Categories included those already employed in the industry, recent graduates, those moving into the state, the unemployed, and finally those a company may have to recruit out-of-state. He then broke down the number of available employees from each group to see if they would meet Amazon’s needs to hire 50,000 employees over the next 15 years.
Hilburn sent the analysis to Flynn, hoping he had created what Flynn had envisioned. Flynn responded simply with, “Wow!” Hilburn knew by his boss’ lack of words and feedback not only that they had succeeded, but that EDCUtah had developed the first data-centric tool to assess the mix of available local labor sources through a “capital stack” approach.
When EDCUtah ran Utah’s figures through the Labor Stack, Hilburn found that the state could almost meet Amazon’s labor needs. Almost, because while Shakespeare famously wrote in one play, “let’s kill all the lawyers,” it turned out that “legal” was the one profession Utah might have come up short in, requiring Amazon to recruit out-of-state for some legal positions. “We might be the only state in the nation that actually wants more attorneys,” Hilburn says with a laugh.
Rather than employing the Labor Stack solely as an asset to attract relocating corporations, Utah intends to share it with other states. That way, Hilburn says, other states can benefit too by identifying gaps in their labor force that might cause them to lose relocation projects. “Corporate relocation works best when the company and community are a good fit for each other,” says Hilburn. “The Labor Stack shows just how good a fit they can be.”
Perhaps the biggest lesson of the proposal process for EDCUtah and Hilburn was what the Labor Stack revealed about Utah’s workforce. Between Utah’s fast-growing population and its high rate of graduates, Utah has what it takes when regarding such a huge demand for labor as Amazon has. As Hilburn expressed, “My greatest learning experience was ‘Wow, we could handle that.'”
For a more detailed look at how the Labor Stack is created, click here.
