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BR&E Grants Pass/ Josephine County, Oregon Summary data from business visitations and surveys AUGUST 2008 We believe our existing firms are our best pros- pects for future growth. The purpose of this pro- gram is to see how we can help them grow. GRANTS PASS/ JOSEPHINE COUNTY, OREGON BUSINESS RETENTION & EXPANSION PROGRAM 2008 BUSINESS RETENTION & EXPANSION (BR&E) BUSINESS SURVEY/ VISITATION SUMMARY REPORT AUTHORED BY: Charlie Mitchell, CEcD BR&E Program staff August 2008 DATA AND SURVEY DEVELOPMENT: Rebecca L. Reid For more information contact: Charlie Mitchell SOREDI 541-244-3239 Charlie@soredi.org Jon Jordan Grants Pass/ Josephine County Chamber of Commerce 541-476-7717 email@example.com Program information, including electronic versions of this report, is available on this website: http://www.bre.grantspasschamber.org "This Project is funded in part with a grant from the Oregon State Lottery through the Regional Investment Fund, administered by the State of Oregon Economic and Community Development Department." Grants Pass/ Josephine County, The history In 1998, the City of Grants Pass was seeking to de- Oregon Business Retention & velop a business retention and expansion program. Expansion (BR&E) Program At the same time, the Grants Pass/ Josephine County Chamber of Commerce called together its Introduction Business Retention & Expansion Committee which Every community needs to pay attention to its ex- had been on hiatus for a number of years. Through isting businesses. The Grants Pass/ Josephine research conducted by the City, the Chamber Com- County Business Retention and Expansion (BR&E) mittee ultimately decided to undertake a program program is a key element to communicate with lo- developed by the Minnesota Extension Service. At cal businesses and develop strong local economic the time the Western Rural Development Center development efforts. While attraction of new busi- was housed at Oregon State University in Corvallis nesses and encouragement of new business start- and would be able to provide a significant amount ups are important parts of an overall economic de- of technical assistance and guidance at little or no velopment strategy, many communities across the cost to the community. country now recognize the need to do more to help existing businesses survive and grow. In early 1999, the program was launched and the first round of business visitations and surveys was The survey conducted by the Grants Pass/ Jose- conducted. The effort won the “Sustainable Ore- phine County Chamber of Commerce BR&E Com- gon” award from Gov. John Kitzhaber that year. In mittee is one way to understand the needs and aspi- 2001, the program won an international community rations of our local businesses. The survey results award from BREI (Business Retention and Expan- are used to develop strategies that help businesses sion International). The awards were due mostly to remain and expand in Josephine County. the fact that the program had demonstrated real re- sults from its efforts, namely enabling one or more Objectives key local manufacturers to expand their facilities 1. To demonstrate to local businesses that the and add jobs. One of the most visible success sto- community appreciates their contributions to ries is the development of the Spalding Commerce the local economy. Park, initiated in part from the 1999 survey results. 2. To help existing businesses solve problems. 3. To assist businesses in using programs aimed at Each year, an annual retreat/ planning session is helping them become more competitive. held to look back on the previous year’s accom- 4. To anticipate future local business issues and plishments and look ahead to planning for future trends and develop strategies to address these. activities and strategies. It was determined that 5. To build community capacity to sustain growth. comprehensive surveys would be conducted every 6. To specifically identify those businesses poised three years, so a second round of surveys was con- to expand that need assistance to grow. ducted in 2002. In 2003 the format of the annual 7. To develop collaborative relationships. meeting was changed to become more akin to an 8. To identify opportunities to attract support busi- annual economic development forum, complete nesses. with professional speakers and an awards program. Sponsorship 2005 marked the third round of surveys and the This program is sponsored locally by the Grants Pass/ third year for the annual forum under the new for- Josephine County Chamber of Commerce with support mat. Both activities were bigger and better than in from the City of Grants Pass and Josephine County. previous years. 2008 marked the 10th anniversary Southern Oregon Regional Economic Development, Inc. of the program and the fourth round of surveys. (SOREDI), Rogue Community College, Oregon Em- ployment Dept., The Job Council, Pacific Power, Avista Utilities, and the Oregon Economic & Community De- velopment Dept. are also keep supporters of BR&E. 3. Why is Business Retention & Expan- dramatically different in the post-9/11 era. Did the sion (BR&E) important? businesses add the jobs they anticipated after 1999? Our slogan in 1999 was, “We believe our existing Many expansion projects were placed on hold. Most firms are our best prospects for future growth. The businesses were on track to meet their projections purpose of this program is to see how we can help until the catastrophic economic events of 2001-2002 them grow.” That statement continues to hold true set in. One thing is certain; businesses in 2002 were today and has worked its way into local economic less optimistic than they were in 1999. Still, most of development policy and is evident in some of the them were planning for healthy future growth. major business growth projects happening today in the Grants Pass area. Virtually all new projects, job In 2005, the optimism seemed to have returned for growth and capital investment are due to existing the most part. Businesses were again looking to the businesses expanding. The BR&E team has been in- future for growth, and many grew significantly since volved in most, if not all, of the projects in one way 2002. Most local businesses survived the recession or another. We’ve demonstrated our ability to suc- very well, and some even thrived. The size of the cessfully transition business relocation efforts such labor force and the number of people employed lo- as Encore Ceramics and Fire Mountain Gems into cally were at historic highs in 2005. Dozens of area successful BR&E efforts by providing continuing businesses are in one phase or another of a local ex- and ongoing assistance even after the business came pansion effort. More business surveys were com- to town. It’s classic “service after the sale.” pleted in 2005 than in 2002 or in 1999. Most new jobs are created by existing, smaller busi- The 2008 survey revealed a continuation of the three nesses. Beyond that, the return on the investment of -year economic cycle seen in financial and human resources is much greater when previous surveys as a na- 78 invested in local businesses than on new business tional recession loomed in recruitment. And lastly, a happy and healthy local the post-housing crisis era. business business climate will actually make new business Generally speaking, busi- surveys recruitment much easier as existing businesses be- nesses surveyed were rather come ambassadors for the community. apprehensive about the fu- were ture, yet still continued to completed The process prove their dynamism with There are many methods to conduct a successful lo- significant and on-going in 2008. cal BR&E program. One of the ways this program capital and technology in- differs from others is that it uses local community vestments. leaders as volunteers to visit with the business own- ers and managers in a one-on-one sit-down visit/ What’s different between the 2008 sur- survey at the interviewee’s place of business. A key vey and data and the previous ver- benefit of this approach is the relationship-building sions? that it inherently fosters. This approach is also much more cost-effective than hiring “professionals” to Number of businesses surveyed. In 1999, we collect the data for the community. set out to visit around 95 businesses and collected data from 61 when all was said and done. In 2002, In 1999, when the Grants Pass/ Josephine County we set out to visit over 140 and ended up collecting BR&E project conducted its first formal comprehen- data from only 37, with five being considered incom- sive business visitation and survey program, local plete. In 2005 we set out to visit 100 businesses and businesses were riding the crest of an exciting eco- completed 66. In 2008, we set out to visit around 105 nomic wave. One of the most revealing facts from businesses and completed 78, our highest completion this effort was that 45 of the 61 businesses surveyed number and rate to date. were planning to add 1,200 new jobs over the next three years. Three years later in 2002 the world was The types of businesses surveyed. In 1999, 4. we targeted every non-government business with over launching it in late January. 100 employees, then took a sample of businesses by Red Flag Review. In each round, after the surveys SIC code in manufacturing, wholesale trade and some were completed and returned, the Committee meets to service sector. In 2002, we visited a broader mix of review each survey and decide on how to handle the businesses, including some we had visited previously immediate follow-up. The Red Flag review is de- and many new, smaller businesses, including several signed to identify and deal with immediate issues or retail businesses. Some of high refusal rate may have problems discovered during the survey process, with- been due to the types of business, but may also have out waiting for formal analysis of the survey data. been due to such things as: state of the economy and Prompt attention to issues raised creates a positive businesses’ comfort level, inadequate visitor training response from survey participants and builds good and follow-through, and the fact that the survey proc- rapport and trust. The Committee addressed 94 ess and instruments were not fully understood by the unique Red Flag issues in 2005 and in 2008 we ad- visitors or the businesses. The 2005 and 2008 surveys dressed 94 unique issues among 41 businesses. Of were very similar to 1999 in that we targeted every these, 13 needed assistance with some aspect of a cur- private sector employer with over 100 employees and rent or planned business expansion. Issues ranged sampled “traded sector” (and a few non-traded sector) from complaints about governmental agency services businesses to round out a list of around 100 busi- to training and workforce needs to expanded infra- nesses. Generally speaking, the list of businesses cho- structure issues to information on legislation. sen is based on a selection of businesses which have the ability to make significant impacts on the local People involved in the local economy, both positive and negative. The list was BR&E program: chosen by the BR&E Committee, approved by the Chamber Board. 2008 BR&E Committee (active): The amount of technical resource assistance. David Gaskin, Chair, Big O Tires In 1999, we were privileged to receive a great amount Steve Roe, Vice Chair, Roe Motors of technical assistance, including the writing of the Charlie Mitchell, staff, SOREDI survey document and the final report by Oregon State Linda Draper, The Job Council University staff. We also had much human support Ainoura Oussenbec, Oregon Employment Dept. from partnering agencies, specifically from the City Gail Gasso, Oregon Employment Dept. of Grants Pass. In 2002, we had neither. We ran a Jon Jordan, Chamber of Commerce leaner ship, and quality suffered a bit. In 2005, the Colleen Padilla, SOREDI City received an Oregon Lottery grant from the Re- Larry Holzgang, OECDD gional Investment Board, which allowed us to hire Lois Keller, Recognition Specialties Rebecca L. Reid to develop our survey and provide Donna Love, RCC Small Bus. Dev. Center data analysis and technical assistance. The 2008 sur- John Lopez, RCC vey followed a similar format, slightly modifying the Steve Dahl, City of Grants Pass 2005 survey and again using Reid for data analysis David Tally, Tally Media Group and program staff for the writing of this report. Stacie Walsh, Personnel Source The survey instrument changed. We struggled Todd Thompson, Rogue Advisors in the years between 1999 and 2002 with some in- Darlene Dart, PremierWest Bank terim surveys, testing out simpler, shorter surveys. Linda Barkey, Visp.net We elected to go with a two-part survey in 2002 Bob Schumacher, IVCDO which created confusion and may have led to incom- Diana Corder, Pacific Power plete surveys and frustrated visitors and businesses. Lew Tagliere, RCC Small Bus. Dev. Center In 2005 we returned to what worked best in 1999, Shari Downhill, NW Timberfallers using funds to hire a professional to develop our sur- Gina Marie Agosta, Coalition For Kids vey instrument and analyze the data. We also re- sumed survey field testing in 2005. In 2008, we tested a modified 2005 survey with three businesses before 5. 2008 Volunteer business visitors: (In addition to Committee) Dean Wendle, RCC Board Joe Rich, volunteer Brad Ross, RCC Ken Heindsmann, The Job Council Peter Angstadt, RCC President Mike Peil, Bank of the Cascades Chris Isabell, Rogue Advisors Nancy Maxwell, volunteer Mike Enger, Home Valley Bank Ruth Pepple, volunteer Terry Goodell, Holiday Inn Express Sid Jack, Oregon Employment Dept. Dawn Baumer, Volunteer Susan Goracke, Daily Courier Jill Gleysteen, Home Valley Bank Shari Downhill, RCC SBDC Denise Davis, Home Valley Bank Steve Ware, Home Mortgage Solutions Marty Clapp, volunteer Tracy Thompson, Prudential Real Estate Claudette Wilder, Wilder Appraisals David Smith, Oregon Employment Dept. Jeff Smith, UWIN Renee Barron, volunteer Mollie Means, volunteer Bea Ryan, Sterling Savings Bank Reg Powell, SOREDI Karalee Black, Personnel Source Ron Fox, SOREDI DonnaJean Wendle, Grants Pass City Council Bill Peterson, Copeland Paving Firms Visited: 108 firms were targeted to be visited in 2008 and 78 surveys were completed. This was our highest number and completion rate to date. Facts on the 2008 round of BR&E business surveys: • Surveys completed: 78 • Completion rate: 73% • Businesses with “Red Flags”: 41 • Individual “Red Flag” issues: 94 • Businesses with expansion needs: 13 • Number of volunteers involved: 50 • Approx. number of volunteer hours: 340 This compares well to previous rounds and even to 2005 when 100 firms were targeted to be visited, and 66 surveys were completed. The community and the BR&E Committee greatly appreciate the willingness of these businesses to help the community understand their needs. Their survey responses are confidential yet it is im- portant to credit their participation by listing their names in Table 1. on the following page. Forty-seven of the businesses surveyed this year have been surveyed by us in the past and four have participated in each and every survey. • Surveyed for the first time in 2008: 31 • Participated in at least one other survey: 47 • Participated in one other survey: 21 • Participated in two other surveys: 26 • Participated in all surveys: 4 6. Firms Visited in 2008: Table 1. AE Light Kauffman Wood Products† Albertsons* Laurel Hill Nursing Center† Ausland Construction Marzi Sinks† Aviation Associates MasterBrand Cabinets*§ Bi-Mart Met One Instruments* Bob Drake Reproductions*§ Mountain Alloy Carson Helicopter Mycorrhizal Applications Inc.† Cary's of Oregon* NWD† Copeland Paving* OOGP Core-Mark* Oregon Swiss Precision*§ Courier Publishing* Pacific Aviation DCS, Inc.* Pacific Botanicals Duro-Last Roofing* Pacific Ironworks Inc† Dutch Bros.† Paklite (Victor Henry) Dutch Mining Co. Pharmacy Computer Services* Eagle Veneer Precision Screw Mfg. (Ray Urias) Encore Ceramics* Radio Design Group† ESAM* Recognition Specialties* Exceptional Metals Riverside Inn* Farmer's Building Supply/ Rogue Truss Roe Motors Fields Truss Co./ Grants Pass Truss LLC Rogue Truck Body† Fire Mountain Gems† Roley's Pacific Supply Flora Research Rough & Ready Lumber Co.* Foris Winery† Royale Gardens Health & Rehab* Fred Meyer* Sequoia/Carling of America FW Murphy† Sharp's Tarps Inc.† Gates Home Furnishings* Shelter One Gottschalks Siskiyou Community Health Center GP Water Lab So. Oregon Sanitation* Grants Pass Clinic† Summer Jo's Grayback Forestry† Swissmetric* Hach Ultra Analytics† Taylor’s Sausage† Henderson's Line-up† Three Rivers Community Hospital*§ Herb Pharm* Timber Products* Hy-Speed Machining† Umpqua Dairy* ICX/Meso Systems USF Reddaway† Impact Physical Therapy Visp.net† Incident Solutions Inc. Woodruff Construction Isecure Yanase Jewelers *Firms that were also surveyed in at least two previous rounds of BR&E surveys † Firms that were also surveyed in one previous round of BR&E surveys §Firms that were surveyed in all four rounds 7. Grants Pass & Josephine County Eco- tourism, retirement services, retail trade and other service and manufacturing sectors, the wood products industry is nomic Profile: still a major force in the county. Many of the top manufac- Job growth and industry diversity have been the themes turers in the county, including those producing wood prod- for Josephine County for more than a decade. Once a tim- ucts, have generally continued to expand and add employ- ber and natural resources dependent community, today no ees throughout the past decade. singular or group of businesses and no singular industry In fact, the County leads the state in economic dominates the local economy. Total employment in Jose- diversity among rural counties. A state economist has de- phine County hit an all-time high late 2005 just prior to a termined Josephine County to rank highest among rural state and national economic slowdown that continues into Oregon counties in terms of economic diversification. The 2008 and for the foreseeable future. Josephine County, index model, known as the Hachman Index, was produced once adding jobs at rates higher than the state or the nation by Frank Hachman of the Bureau of Business and Eco- in 2004 and 2005 has seen stagnant and slight negative job nomic Research at the University of Utah. growth since 2006. The phenomenal growth of construc- The county currently employs around 640 in wood tion, especially residential, resulted in an employment products. Health services is the largest sector of employ- boom; now many industry sectors, including construction, ment (15.7%), followed by retail trade (15.1%), manufac- are facing contraction. Many other business sectors, in- turing (12.5%), leisure and hospitality (11.5%), and local cluding finance, real estate and some manufacturing real- education (7.6%). ized their recent growth was due to ties to the construction 200 new jobs were added in 2007 in health ser- industry. Still, some sectors continue to do well in the vices while the other traditional high-paying industry sec- county, namely health care, wholesale trade and manufac- tors of construction, manufacturing and wholesale trade turing businesses that are enjoying profits through exports, saw either very modest gains or small declines in jobs. The taking advantage of a weak U.S. dollar. total civilian labor force in the county grew to just under Josephine County’s unemployment rate in 2007 35,000 in 2007, slightly up over 2006. Despite recent and ranged from a low of 6.2 percent in May to a high of 8.2 current economic woes, overall in the whole county 269 percent in January and February. Despite little or no job net new jobs were added between 2004 and 2007 (a 0.8% growth, the unemployment rate remained within or below growth rate), and payroll jobs increased by 1,090 in the historic averages, pointing to a shrinking labor market. same period (4.4% growth). Josephine County gained only 50 payroll jobs in 2007, a MasterBrand Cabinets, Three Rivers Community sign of the times of economic stagnancy. Our year-to-year Hospital and Fire Mountain Gems remain the largest em- payroll job growth rate was about 4.6 percent. The number ployers in the county with above-average compensation of unemployed as the year closed out was 2,756, still be- and benefits. The construction and government sectors low over 3,000 recorded in the mid-1990’s. continue to decline due to a decreased demand in housing The largest city and county seat in Josephine and budget cuts in county government. Generally, com- County is Grants Pass, population 34,237. The Grants Pass mercial construction remains active, and new commercial/ urban area has a population of around 40,000. Since 1990, retail centers have been added in recent years in response the population of Grants Pass has increased by nearly 50 to population growth. Spalding Commerce Park continues percent, rising from 17,448. Population for Josephine to grow and add new businesses and Paradise Ranch Re- County as a whole has seen similar trends, growing from sort readies itself for opening in 2009 or 2010. 62,649 in 1990 to 82,390 in 2007. The county’s population Following similar national and statewide trends, is projected to reach 85,000 by 2010. Cave Junction, the manufacturing employment is now generally holding county’s other incorporated city, has 1,685 residents. All steady following a decade of decline. Employment in the recent population growth in Josephine County has come Josephine County wood products industry had fallen by from in-migration. While Josephine County has an aging about 33 percent in the previous decade and now represent population (over 20 percent of the county’s residents are about one-half of numbers posted as recently as 1999. 65 or older), the fastest growing age group in the county Through 2016, the health care sector is projected has been the 45-54 cohort; this is also the largest age to see the fastest job growth in the region (31 percent); group by percent of total. The 25-34 age group has de- followed by professional & business services (21 percent); clined by 4.5 percent in the past decade. and leisure & hospitality (20 percent). Health care services and retail trade will continue to dominate the market in Employment Trends and Industry Diversity terms of total job count in the region. Some of the fastest Josephine County’s reliance on logging and timber growing occupations in the region through 2016 include a products manufacturing has decreased over the past two variety of healthcare occupations, computer services, per- decades. Despite this, until very recently, new jobs con- sonal care services, food preparation, building mainte- tinue to be added. And while the county’s industrial base nance, community/ social workers and retail sales. has diversified to include high technology, medical care, 8. Grants Pass/ Josephine County 2008 -defined “groups”: Survey Results • Dynamic Group (33%): Small & medium-sized Following are the results of the survey of 78 firms by traded sector businesses with the potential to grow the Grants Pass/ Josephine County BR&E Committee • Heavy Group (22%): Large businesses (generally and volunteer visitors January through March 2008. over 100 employees) The firm characteristics are summarized first followed • Heritage Group (8%): Sample of long-term busi- by selected detailed data on a variety of issues and nesses subjects, and finally suggested projects and strategies • New Group (6%): Traded sector businesses new to selected by the data analyst, author & Committee. the area within last five years • Other Group (31%): Sample of other businesses Characteristics of Firms Visited suggested by the Committee The firms visited represent a sample of around 2.5 percent of the businesses in Josephine County (~3,000 firms). Of the 108 Fig. 1. Business Types Surveyed - GP/JoCo 2008 Natural Resources: Construction: firms targeted, 78 completed the vis- 3% 2% Other: its, the highest number and comple- 5% tion percentage yet for this program. Wholesale Trade: The types of firms in the visited sam- 5% ple fell into several categories (see Fig. 1). In order of decreasing size the Manufacturing Other services: 30% largest broad industry categories 8% were: Manufacturing: 30% Health care/social assist: 24% Retail Trade: 23% Retail Trade Other services: 8% 23% Health Care/Social Wholesale Trade: 5% Assist. 24% Other: 5% Natural Resources: 3% Construction: 2% These firms employed nearly 5,750 full-time people in 2008 (about 23% Fig. 2. Surveyed firms by employment size GP/JoCo 2008 of the total County payroll employ- 100+, 17% ment. Distribution of employment <10 , 25% size was fairly evenly spread across the range (see Fig. 2). The overall mean employment size was 75. General Information Geographic distribution of firms sur- veyed: 50-99, 14% • 71% in the Grants Pass urban area • 15% in Merlin/North Valley • 9% in the Illinois Valley • 5% in other unincorporated areas of Josephine County 10-24, 23% 25-49, 21% Firms were also selected based on pre 9. What did we learn in 2008? Businesses re- Major findings: main dynamic and • Businesses remain dynamic and continue to invest continue to invest in technology, modernization and facilities. in technology, modernization and • Many businesses will need assistance with their ex- facilities. pansions. • Most businesses are apprehensive about the future Most businesses and are less likely to have firm predictions. are apprehensive about the future • Over half of the survey respondents reported that and are less likely their company had expanded or remodeled in the to have firm predic- past five years and 45% plan an expansion or re- tions. model in the near future. • Several community services received low marks Most continue to this year; most ratings did not improve over 2005 marks. find this area to be a good or better • Over 60% of businesses had recently completed a place to live and wage analysis. do business. • Generally, optimism fell below that expressed in 2005 and was more similar to 2002, echoing eco- Most businesses account nomic conditions at the time of the survey. for superior product/ service quality and cus- • More than half of the businesses surveyed stated tomer service as the as- they had problems with employee recruitment. pects of their company that distinguish them • Most find this area to be a good or better place to most from their competi- tion. live and do business. in their business. About the data: The next several pages contain brief text and graphical representations of the data obtained from the surveys. The data is generally presented in the order that it was asked. Not all questions and responses are listed here; only those that lend themselves best to interpretation. This document is intended to be a summary of the data for general con- sumption. Some of the detailed data contains responses with confidential and/or proprietary or inappropriate com- ments and responses. In these cases, the responses may have been edited and/or paraphrased for the purposes of this summary to protect the confidentiality of the employer and/or the volunteer visitor and in some cases to produce smoother-flowing data. The strategies that are listed are the expert opinion of the data analyst, author and the BR&E Committee. 10. Rating the Opinions of GP/JoCo as a place to do business & live community 2008 In each round of the four 0% 10% 20% 30% 40% 50% 60% 70% 80% surveys conducted so far businesses were asked to Excellent=5 rate the community as a place to live and as a place to do business. Prior to Good=4 2008, community ratings had improved each year the survey has been con- Fair=3 ducted. Through 2005 each rating improved by Poor=2 about 0.2 in each category As a place in which to live every three years. For As a place in which to conduct business 2008, ratings for the com- Very Poor=1 munity as a place to do business slid by 0.4 while ratings for the community Fig. 3. as a place to live held steady from 2005 both a hindrance and a help—such as workforce ratings. See Fig. 3. For the first time, and the size of our local community and our rela- and Table 2. Firms’ community ratings tive remoteness. In fact, workforce was rated as the opinion of Grants number one disadvantage and the second highest Pass/ Josephine did not improve in advantage. See Tables 3. & 4. Most businesses sur- County as a place to 2008. veyed account for superior product/service quality do business is still and customer service, not price or the product or 79 percent good/excellent. Their opinion of the com- service itself, as the aspect of their company that dis- munity as a place to live is 97 percent good/excellent. tinguishes them most from their competition. It is unclear at this time why these ratings did not Table 3. continue to improve; however Committee members Key Advantages: had mixed feelings about the 4.7 community rating in Quality of Life 29% 2005, unsure of whether such a high number could be Labor/Workforce 27% sustainable or continue to improve. Location/ Climate 22% Community 18% Table 2. Community as a place Community as a Programs/ taxes 12% to do business place to live Economics/ costs 10% 1999 3.9 4.4 Wages 8% Access to Customer 8% 2002 4.1 4.5 Table 4. 2005 4.3 4.7 Key Disadvantages: Workforce 24% 2008 3.9 4.7 Transportation 15% Advantages & Disadvantages. Distance from Inputs/ 12% Businesses were asked to list the main advantages Small area/ Market 12% and disadvantages they gain or incur from being lo- Community Issues 9% cated in the Grants Pass/ Josephine County commu- Distance from Markets 8% nity. In many cases, the attributes of this area can be Shipping costs 9% 11. the mean of all employers surveyed and the distribu- Employment tion of employees by employment status appears to be largely unchanged when comparing the past three In the survey, businesses were asked to report how years with 2005 and looking ahead to 2008 (see Ta- many employees in the categories of full-time, part- ble 6.) The most significant trend has been the time, and temporary/ Employment among 78 reporting businesses seasonal were work- FIG. 4. ing there three years GP/JoCo 2008 ago, currently and projected in three Anticipated in years. Fig. 4. shows 3 years that among the 78 companies who re- sponded, they antici- pate adding 887 new Currently jobs in the next three years. This represents about a 15% increase, or about 5.1% per 3 years ago year. This is more than actual previous three-year growth. Growth among this 0 1000 2000 3000 4000 5000 6000 7000 group of businesses tends to exceed that of Employees the county as a whole, according to projec- tions from the Oregon Employment Department. change of more companies to hire more “temporary” Also, this group of businesses added jobs in workers from professional staffing agencies. This the last three years over three times the rate of the number has jumped from 3% in 2002 to 26% cur- entire county. However, several businesses surveyed rently. failed to provide an answer regarding future growth, and in these instances an assumption was made that Table 7. Currently In 3 years employment in three years would remain the same as Mean percentage: Gen. 31% 31% current employment. We have considered this to be a Production conservative estimate. Employment growth based on Mean percentage: Skilled 46% 46% Table 6. 3 years ago Currently 3 years from Production now Mean percentage: Cleri- 13% 13% Overall mean 69 75 81 cal/ office size of em- ployment Mean percentage: Sales 14% 15% Mean per- 81% 83% 83% centage: Full- Mean percentage: Profes- 39% 24% Time sional/ Mgmt. Mean per- 30% 27% 24% centage: Part- The percentage of employees by occupation Time classification is projected to remain essentially the Mean per- 8% 26% 22% same in three years as it is today (see Table 7.), thus centage: demonstrating no major shifts anticipated by Temporary 12. those local employers surveyed between a distribu- their employees than they were in previous years. In tion of general production, skilled production, cleri- fact, the percentage of those who say they provide cal, sales and professional/ management. The results benefits is higher in 2008 than it was in any previ- ous survey year. Benefits may have risen and fallen Table 8. General Skilled with the economy in the last slowdown (as the per- Production Production centage of those businesses which provide benefits Mean Wage* Mean Wage dipped slightly in 2002; see Table 9.), but did not do 1999 Survey $7.76 - $8.23/hr. $11.20/hr. so in 2008. This is good news for the economic health of the community, and it may also serve to compensate for what appears to be a dip in wages. It 2002 Survey $8.24 - $8.25/hr. $13.63/hr. may also be reflective of employers’ realization that benefits are equally, and sometimes more, important 2005 Survey $9.19/hr. $12.18/hr. to their employees than wages, and that to keep good employees from leaving, a sound benefit pack- 2008 Survey $9.86/hr. $13.29/hr. age is a necessity. A variety of different types of benefits are being offered, with health insurance, *The wage range stated in 1999 and 2002 is due to general paid holidays, vacation and retirement being the production labor included in two separate job classifica- most popular (see Figure 5.). tions in the 1999 and 2002 surveys. Over 80% of the businesses surveyed pro- show a slight decrease in the percentage of professional/ man- Fig. 5 Benefits provided by employers, GP/JoCo 2008 agement positions, an intriguing 100% indicator. 90% Generally, wages have 80% risen over the years, especially 70% entry-level wages, but the mean 60% wage paid to skilled production 50% labor appears to have slipped slightly between 2002 and 2008 40% for an unknown reason (see Ta- 30% ble 8.). This aberration may in 20% part be due to the small sample 10% size of the 2002 survey. 0% Employee Benefits Despite the rising cost of health care, it appears that more busi- nesses are providing benefits to viding benefits are providing paid vacations, paid Table 9. % of firms sur- % of firms sur- holidays and/or health insurance. The percentage of veyed who pro- veyed who don’t surveyed firms that are paying health insurance to vide benefits provide benefits their employees has risen from 80% in 2005 to 90% 1999 survey 88% 12% in 2008. The provision of dental insurance rose from 11% in 2005 to 55% in 2008. Vision insurance did- 2002 survey 85% 15% n’t even make the list three years ago, but is now being provided by over half of those employers sur- veyed. Meanwhile, sick leave seems much less 2005 survey 91% 9% popular and retirement has remained about the same. 2008 survey 96% 4% 13. Employee turnover Is Employee Turnover a Problem? GP/JoCo 2008 Like in 2005, more than three-fourths of Yes, 22% businesses say that employee turnover is NOT a problem for them (78% no vs. 22% yes—see Figure 6.). When asked if turn- over was related on housing, only 15% said that it was; when asked if substance abuse was a contributing factor to turnover, 28% said that it was. Only 13% said they antici- pate turnover to be an issue in the future. As in past years, employee turnover does not appear to be a major issue facing local employers. However, as the following sec- No, 78% tion demonstrates, finding employees re- mains a challenge for many. Fig. 6 Recruiting for employees Companies were asked whether or not they rate of as high as 50% during pre-employment D&A had problems with the recruitment of employees. Sur- testing. Many employers tend to do pre-employment FIG. the prisingly, 2008 did not continue 5 trend of the 2005 testing followed by random testing. Eight out of 10 survey which showed about a 60/40 split of “Yes” to business said they did have a drug & alcohol policy in “No.” In 2008, just place. Only about a over half stated Do You Have Problems Recruiting Employees? fifth were interested in problems with re- GP/JoCo 2008 attending additional cruitment of employ- training on the develop- ees, still a significant ment of a D&A policy. number and a higher Over half of percentage than in those surveyed also ex- 2002, shown in Fig. pressed concerns about 7. Past surveys have No recruiting employees in shown us that em- 49% Yes the future. Stated one 51% ployers naturally employer: “We’re terri- have more difficulty fied that when we grow finding employees we will not be able to during good eco- find quality folks.” nomic times, as the Over half also plan to labor market tight- Fig. 7 implement new strate- ens. In those re- gies in the future to at- spects, given the current economic climate, the fact tract new workers. These new strategies ranged from that over half still have issues with recruitment points adjusting compensation to changing marketing tactics to a shrinking labor market. to creating new partnerships. Half also suggested new Firms listed problems recruiting higher skilled strategies in the future to hang onto the workers they and professional workers, with skills in general being have now, and these ideas ranged from adjusting the limiting factor that stood in the way of employers compensation to better recruitment practices to main- finding the people they need when they need them. taining a great work environment. Nearly three- One third listed housing as a contributing factor. fourths of the firms surveyed said they have and/or Nearly half said that substance abuse created recruit- will consider the employment of “mature work- ment problems. Some employers relayed an attrition ers.” 14. they need training and assistance, both for business Employee Training productivity and their own professional development, but also for their employees, current and future. The Most local employers provide some sort of mix of training needs was shuffled a bit this year, training for their employees. In 2005, only 1.5% of compared to previous years. A trend that continues to the businesses surveyed did not Fig. 8 Methods of training - GP/JoCo 2008 p ro v i d e an y training at all; in 2008 that num- Apprenticeships 14% ber rose slightly to 4%. In-house Private Vendors 23% training remains the most popular (94% in 2008), Public Vendors 24% as it has in previ- ous surveys. Self On the Job Training 31% -teaching and sending employ- ees to workshops Distance Learning 32% are other popular methods, again Workshops 55% very similar to previous sur- veys. See Fig. 8. Self Taught 62% Like in previous sur- veys, businesses In House 94% continue to say Fig. 9 Areas in which employees need training, develop is the increased demand for “advanced” GP/JoCo 2008 computer skills, as well as “basic technical skills.” Management skills needs Apprenticeship programs always remain at or near Sales training the top of the list, along with “basic workforce Utilizing new technology skills.” See Fig. 9. Just Customer service under half of the firms surveyed stated they had a Advanced computer skills need for business leader- ship or management train- Basic Computer Skills ing, consulting or assis- Basic workforce skills tance. Those that did, stated needs for manage- Management skills ment and leadership train- Basic technical skills ing. 0% 10% 20% 30% 40% 50% 15. vestment and change. The local economy is all about Looking to the future change, and businesses are continually adapting to a very dynamic global economy. Sales volume changes • As in years past, a majority (67%) of businesses Businesses were asked to state whether or not surveyed said they added or subtracted product their sales had increased or decreased in the past three lines in the past, and even more expect to do so in years and what they projected their sales would do in the future as well. the next three years. The majority of firms reported • About two-thirds say they have entered new mar- strong past and future increase in sales. An extraordi- kets in the past and will continue to do so in the narily high percentage (97%) expect increased sales future. in the future, the highest number yet recorded in this • Only a third of the businesses surveyed made or category in our four surveys when this question was plan to make market adjustments due to foreign competition, but two thirds have made or will Sales Increase Decrease Stay the make adjustments due to domestic competition. same • High percentages have made or will make ex- panded uses of technology, adopting new tech- Last 3 years 75% 22% 3% nologies or investments in labor-saving technolo- gies or “green” technology. Next 3 years 97% 3% 0% • The most-cited challenges expected to encounter when making changes were: financing, training Table 10. (learning new technology) and regulatory issues. asked. See Table 10. Ten firms surveyed expect sales Business expansions/ changes increases of 50% or more, with three firms anticipat- As in past surveys, we remain surprised at the ing triple-digit growth. Many firms attributed sales number of businesses surveyed who say they do not increases to expected changes in economic conditions own or lease sufficient property at their current site as well as increases in population and/or market size. for expansion. The percentage has finally begun to About one in five firms reported de- shrink a bit in 2008 (in all previous clines in sales in the past, with a In 2008, nearly one surveys, around 40% of the busi- wide range of reasons offered, but citing economic conditions was the third of the busi- nesses surveyed did not have suffi- cient property for expansion) to most popular answer. nesses surveyed do around 32%. Additionally, 45% have Two-thirds of firms are aware of emerging technologies and/ NOT have sufficient present building. 69% of those who plans to modernize or expand their or market forces what will affect property for expan- plan facility changes will add square them, most related to new methods sion. footage, which includes space for or technologies. Some expect these plant production, warehousing and changes to affect their business positively, while oth- office space with most work planned for 2008 or ers expect more of a negative impact. 2009. Businesses were also asked to evaluate their Over half of those surveyed have undertaken a industry and the trends facing the industry. Just over physical expansion in the past five years with three- half of firms surveyed perceive that production or fourths of the work occurring between 2005 and sales levels industry-wide are increasing, with about a 2008. Just under half have remodeled in the past five third seeing industry-wide sales or production levels years, with most being internal remodeling, again oc- decreasing. Only less than one-third see their industry curring in the past three years. About a fifth have re- moving operations outside of the U.S., and just over located in the past five years, and again most occur- one-third are seeing market share of non-U.S. com- ring in the past three years. petitors increasing. Half of those that have undergone expansion, Josephine County businesses continue to im- remodel or relocation projects in the recent past stated press with their dynamic approach to innovation, in- they encountered challenges with “planning require- 16. • One-third of the businesses surveyed plan to affecting a move or closure. (See Fig. 11.) For add square footage those few that were considering relocations, most (71%) were considering relocating with the • 45% plan to begin a facility change project Grants Pass area, while the remaining few were within the next 3 years considering another location within the Southern Oregon region. • 56% have physically expanded in the past 5 It appears opportunities exist to interact years with many businesses who are planning a reloca- tion or expansion in the future. Since many busi- • 46% have remodeled in the past 5 years nesses do not have the building/ land needed for expansion, there is a need to facilitate real estate • 23% have relocated in the past 5 years development or redevelopment to accommodate these needs. As no businesses are planning to • 32% DO NOT HAVE sufficient land or building move out of the region, there is less of a retention to expand! need and more of an expansion assistance need. Over half have expressed concerns with • 18% plan to relocate in the next 3 years planning and permitting as these activities pertain to expansion/remodel projects, thus suggesting a ments. Another 44% listed a related Key factors affecting move/close, GP/JoCo 2008 issue, “permits,” as a challenge. Oth- Fig. 11 ers related issues with financing, Crime/vandalism 11% land prices/ availability and zone Government regulations 11% variances as issues. Over one-third said they did not encounter any chal- No land for expansion 11% lenges at all during their project. (see Taxes 11% Fig. 10.) When asked whether or not a Transportation infrastructure 11% business was considering relocating Lease expiration 17% or closing within the next three years, none said they were planning Better opportunities elsewhere 22% a closure. But 18% were considering Changing market conditions 22% a relocation. Six percent answered “maybe” or “perhaps” when asked Overcrowded building 28% the question of relocation Challenges encountered during recent facility changes, GP/JoCo need to inter- or closure. 2008 Labor face with gov- Availability of Existing Skills/Availability Those that Building 3% ernment agen- were consid- 4% cies in an at- ering reloca- Zone Variances tempt to ad- 7% tion or clo- Planning Requirements dress these is- sure listed Land Prices or 27% sues and possi- overcrowded Availability 8% bly seek to building, streamline changing Financing some processes market con- 9% or implement ditions and better under- better oppor- None Permits standing or tunities else- 18% 24% education on where as the these proc- main reasons esses. Fig. 10 17. Rating community services Businesses were asked to rank (using the 1-5 breakdown. Most categories saw no improvement rating scale, with 1 being very poor and 5 being ex- from 2005, reflecting a much different general out- cellent) 18* different community services, ranging look on the world by the business community. It will from day care to street maintenance. Most areas re- require further investigation and time to determine ceived a “fair” or better average rating, with the low- whether the issues are perception, reality or attitude. est average rating a 2.8 (child care) and the highest a Four categories (child care, zoning & land use, law 4.7 (community as a place to live; see Table 2. on enforcement and workforce housing) hovered around page 11). the “fair” average rating. Ratings for only one cate- However, responses ran the full range in most gory (Post-secondary education) improved between categories from “very poor” or “1” to “excellent” or 2005 and 2008. For the first time, not a single cate- “5” with considerably more “excellent” ratings than gory in this table scored above a 4.0 rating. “very poor” ratings. See Table 12 for the detailed Table 12. Ave. rating Ave. rating Ave. rating Ave. rating Category Change 2008 2005 2002 1999 Building codes and inspection ↓↔ 3.3 3.5 3.3 3.2 Zoning and land use ↓ 3.0 3.5 3.5 2.9 Child care ↓ 2.8 3.6 3.6 3.1 Telecommunications ↔ 3.6 3.6 n/a n/a Availability of parking ↑↓ 3.6 3.7 3.3 3.2 Law enforcement ↓ 3.1 3.8 3.8 3.1 Post-secondary education ↑ 3.9 3.8 4.1 3.6 Vocational schools ↓ 3.3 3.8 3.6 3.4 Health care ↓ 3.6 3.8 3.8 3.6 Roads, highways, freeways ↓ 3.7 3.9 3.8 3.2 Elem. & Sec. Schools ↓ 3.8 3.9 4.0 3.4 Water treatment ↑↓ 3.8 4.0 3.8 3.6 Sewer treatment ↑↓ 3.8 4.0 4.0 3.6 Solid waste disposal ↑↓ 3.9 4.0 3.9 3.4 Fire protection ↓ 3.7 4.2 4.2 3.9 Recreation facilities ↓ 3.9 4.3 4.3 4.1 Park System ↓ 3.9 4.3 4.3 4.2 Ambulance services n/a n/a 4.1 3.8 Hospitals n/a n/a 4.3 3.6 Workforce Housing 3.1 n/a n/a n/a *“Workforce Housing” was added as a category in 2008. “Telecommunications” was added as a category in 2005. “Ambulance services” and “hospitals” were discontinued as categories after 2002. “Water treatment” and “sewer treatment” were combined into one category in 2005, as were “recreation facilities” and “park system.” “Street main- tenance” was changed to “roads, highways and freeways” in 2005. “Day care” was changed to “child care” in 2005. “Community education” was changed to “post-secondary education” in 2005. The categories of rating the “community as a place to live” and the “community as a place to do business” were added to this set of questions in 2005, but are reported out separately; in this report they are included in Table 2. on page 11. 18. Suggested strategies and recommendations Ensure “Red Flag” issues are followed-up accordingly. The BR&E Committee should appoint a small group to audit the Red Flag issues uncovered during the 2008 round of visitations and ensure all are addressed appropriately, ideally by the end of 2008. It is critical that these do not fall by the wayside. Address employee recruitment issues through a variety of tactics. Over half of the businesses surveyed stated they are having problems recruiting employees and roughly the same percentage expect to encounter recruitment problems in the future. Many said they were having trouble finding higher skilled employees and nearly half cited substance abuse as a contributing factor to recruitment problems. Through collaborations with other agencies, the BR&E Committee should take on assisting with employee recruit- ment issues as a top priority and work to develop strategies to address these issues and help employers implement plans to improve employee recruitment and retention. A subcommit- tee of the full BR&E Committee (which may include members of the Chamber Education Committee and others) may need to be formed to take on the task of developing and assist- ing in the implementation of county-wide (or region-wide) employment strategies. Assist with expansion issues. Nearly half of the businesses surveyed are planning a remodel or expansion in the near fu- ture and one third don’t currently have sufficient space for an expansion. BR&E needs to pro-actively lend assistance through individual firm assessment, property identification and planning/ permitting negotiation and resolution. Develop a strategy to respond to key community issues that received low ratings. Child care, zoning & land use, law enforcement and workforce housing received low rat- ings for community services. Ratings for only one category (Post-secondary education) im- proved between 2005 and 2008. BR&E should attempt to appropriately respond to the re- spective agencies on these issues and report back to the business community through the Chamber of Commerce. 19. 2008 Grants Pass/ Josephine County, Oregon BUSINESS RETENTION & EXPANSION (BR&E) BUSINESS SURVEY/ VISITATION SUMMARY REPORT "This Project is funded in part with a grant from the Oregon State Lottery through the Regional Investment Fund, administered by the State of Oregon Economic and Community Development Department."