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Roundtable: Business Attraction and Job Growth

Posted: January 25, 2014 10:00 a.m.
Updated: January 25, 2014 10:00 a.m.

Rob Hall, Director of recruiting and Human resources for Advanced Bionics

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Attracting higher-paying jobs to the Santa Clarita Valley for local residents has been an ongoing goal of the city’s economic development division and the SCV Economic Development Corporation. Part of that effort has included attracting the right companies to the valley, and helping existing businesses to grow. Companies are slowly emerging from the recession and, as our industry Roundtable participants alluded to, are feeling more confident about hiring again.

The SCV Business Journal invited a number of local experts to sit down with us to discuss the goal of attracting businesses and creating jobs: Holly Schroeder, president and CEO of the SCVEDC, Jason Crawford, marketing and economic development manager, city of Santa Clarita, Ken Wiseman, CEO of AMS Fulfillment, Rob Hall, Director of recruiting and Human resources for Advanced Bionics, and Joe Klocko, director of Center for Applied Competitive Technologies.

For the city of Santa Clarita and the SCVEDC, what are the targets and goals for job creation?

HOLLY SCHROEDER: The EDC takes an industry cluster-based approach to business attraction. We focus on building upon the businesses and industries already here. They are in proximity to each other, which creates benefits and efficiencies in terms of workforce, workforce development, service providers, competition and innovation. Our key clusters are: aerospace, biomedical devices, media and entertainment and manufacturing.

JASON CRAWFORD: The city is a supporter and partner of EDC, so we work together on  those types of projects. We take the lead on future planning for commercial development. Our goal is to have two jobs for each house the city approves. We look at ways to maximize the best use of future properties so there are more retail, commercial and industrial spaces for these new companies to move into. We’re looking long-term. Rather than approving projects the market can handle today, like three one-story buildings, we look at a project that is a three-story building, allowing for future growth.  

Then the EDC takes the lead on bringing in the jobs to fill the available space, and we work more as a wingman in that aspect.

How do you support existing businesses and go after companies that might bring in jobs?

SCHROEDER: Attraction is a variety of different strategies and a team approach. We help to identify future companies, especially ones with some kind of existing tie to Santa Clarita. They could be receiving services from the city, College of the Canyons (COC). They could be using facilities here. They could have executives, a workforce or a desired labor pool here. Or they could have existing business relationships in Santa Clarita. There are a lot of ways we build our prospects list.

In addition to broad-based marketing about the value that exists here in the SCV, we have a lot to offer a company: state-of-the-art buildings, good transportation infrastructure, a highly skilled workforce, services for workforce development and a good tax structure. If a business needs to grow or establish a new division, these things make Santa Clarita a very desirable place to locate. We want to make sure businesses understand the value that’s here.

Describe your outreach with existing businesses.

SCHROEDER: We want to increase our outreach to existing businesses this year, focusing on the key clusters. We are doing some work with cluster coalitions, getting these different businesses to come together and actually see who’s here. There are a lot of gems out there, but people don’t realize they’re here.

Somebody here may be able to provide services, so other local businesses don’t have to seek out a service at a 50-mile radius.

KEN WISEMAN: There’s a real-life example of that happening right now.

We recently won Filmtools as new client. We will be handling all of their distribution here. Out of Burbank, they supply film products to SCV and nationally, and they were outgrowing their distribution capabilities. Like many, they’ve decided to outsource that function. They will occupy about 30,000 to 40,000 square feet in our facility.

Filmtools chose to come here because the studio industry is growing, and they are going to partner with Santa Clarita Studios. So new company will call Santa Clarita home, and it will support the local entertainment cluster.

They are very excited about growing business here. And Santa Clarita Studios is very excited to have their product range available down the street.

ROB HALL: Wait until Disney’s new studios come in.

SCHROEDER: Part of the EDC’s goal is, when there is good news to tell, to help get the word out to different organizations and businesses. There is a remarkable range of innovative companies that fly under the radar because they focus on business to business. So they’re not household names, but they’re still doing remarkable things. It’s important for other businesses to realize their peers are here.

WISEMAN: The cluster management strategy led me to sit down with our sales force to focus on clusters we really wanted to get into. The more companies look outside their current service-providing niche, the more they will find they can fit into others, as well.

JOE KLOCKO: We’ve trained people that have now been picked up by SpaceX and Virgin Galactic space companies. So the city and the EDC can use this information to show businesses that two leading-edge companies are hiring people that have been trained at COC.

While the space companies aren’t here yet, they have buzz about them, validating that we’ve got training programs that could be used by any aerospace and advanced manufacturing companies.

HALL: The training programs at COC are a nice base to work from. We don’t take advantage of them, but a lot of people come from COC. What the school does for us is very helpful for a lot of manufacturing roles. We take advantage of that to recruit and train people.

KLOCKO: A lot of our fast-track assembly folks are very focused on the kind of manufacturing that Advanced Bionics and others need to do. It helps to attract and keep companies like that.

What do you need in terms of training?

HALL: We’re growing 20-25 percent a year right now -- we’re exploding. In a manufacturing world, we expect to have 30-50 percent more employees over the next two or three years. However, we have a hard time attracting high-level engineers locally: electrical engineers, software engineers... We have to recruit them nationally. The beauty is: It’s a great place to raise a family. So it’s easy enough to bring them into the SCV. If they are single, it’s a little bit harder.

Other businesses have described a need for the same skill set. Can we bridge that gap?

KLOCKO: We have associate degrees in engineering, but we don’t pump out a lot of them -- I’d guess about 25-30 a year. The university center at California State University, Los Angeles was going to have a program but didn’t have enough students to kick off the program.

While we don’t have that in place now, that’s when we turn to our partners.

SCHROEDER: It’s an interesting idea to look at relationships with other universities in the area. For businesses that are looking to come to the SCV, partnerships with more universities in the area are something we could add to the package to sweeten the deal.

Is the challenge to find high-end engineers a national problem?

HALL: It is absolutely (a national) struggle for certain niches of engineering, including software and programming engineers.

WISEMAN: We’re experiencing that on the IT side. We’re recruiting from all over.

What other recruiting struggles are businesses facing?

KLOCKO: We serve all types of entry-level positions all the way up to management and IT positions. Because we need to fill entry-level positions, we are able to help place developmentally disabled and at-risk adults. Training really shines at the entry-level positions. We’ve trained Starbucks baristas to become entry-level machinists in seven weeks.

A Kaufman study shows developing high-tech sectors generates higher-paying jobs and supports existing businesses. Jason, will you describe the new incubator.

CRAWFORD: Our focus is on high-paying jobs. The key clusters have already hit the barometer as industries that have future potential and high-paying jobs. If you stay in those industries, you attract high-paying jobs naturally.

The city is partnering with the college on a business incubator to nurture six small new business startups in the creative technology industry. Those are the types of businesses where you can have one or two guys in a single business produce one really great idea that expands, becomes quickly successful and all of sudden needs a whole building and a couple hundred employees.

We can hopefully incubate those startups into successful businesses here in Santa Clarita.

KLOCKO: I previously worked with an incubator. We probably lost 60 percent of the people who may have been interested the moment we said we didn’t have a facility. They want that environment where there are other people with similar mindsets, so they can share best practices and learn.

It’s a great step forward. This is a great grass-roots growth strategy that may establish some roots in Santa Clarita.

Everyone hates the commute out of the valley. How can we bridge the gap between SCV residents and local companies?

WISEMAN: One of the things that intrigued me to become an EDC board member was the opportunity to keep business and jobs in the SCV.

I make a point to say: “Have we looked locally?” We make that our first question now. There’s a need for that. We are all working together, letting each other know what’s happening and what’s available, but there needs to be a lot more.

HALL: We’d love to hire people locally because of the burnout factor. If we can get someone locally, we have proof that they will stay longer in this job because of the commute. We really enjoy having people come from Santa Clarita. We know they’ll stay.

We do all of our recruiting in-house, using the job sites, social technologies, etc.

KLOCKO: The college’s economic development division, under contract with the city of Santa Clarita, offers a free recruiting service through the WorkSource Center. The preponderance of what they do is entry-level, but they are getting more and more higher-level jobs.

What percent of your workforce is local?

HALL: We probably recruit 25 percent of our employees locally. But about 30 percent of our workforce lives locally after they’ve been recruited from another area. We have about 650 employees in our Valencia building, but we are outgrowing it.

CRAWFORD: Advanced Bionics is one of the gems in the SCV. You were in multiple buildings at one point, and there was a chance we would lose you. We worked together to consolidate into one building that works for you. It’s important to have biomed business locally but specifically you because of the good work you do.

SCHROEDER: It’s an example of what a lot of longtime Southern California companies are facing. They grow and grow in various increments, and they end up in multiple locations across the valleys in the region. At some point, that ceases to be efficient operationally.

We have new industrial product coming online; we have really well-designed business parks. We can be a solution for those companies. We want to keep those companies in California.

When they consolidate their operations under a single roof, like Advanced Bionics did, there’s a new efficiency and synergy that will come with that. It’s a good boost.

We think we’ll see more of that because the industrial inventory has been so low here and in the San Fernando Valley. As new construction starts locally this year, that creates new opportunities for these companies to finally capture these efficiencies.

KLOCKO: At one point, the lack of buildings over 50,000 square feet was a major challenge. With $2 million coming online over the next year, there is going to give different solution sets.  

WISEMAN: We were taking over a new building every couple months; at one point reaching about 13 buildings, but we’re down to six buildings now. We’re down to 2 percent vacancy, which means there are a lot of types of buildings that aren’t available.

What are the benefits that allow you to hire more people?

WISEMAN: There are three things that are important in terms of location.

The first is quality of life -- the ability to be able to work and live where you like. Second, business location is important. We’re close to freeways and a reasonable distance from the port. We have high-end business parks with nice spaces. Last, we have the personnel side. This is a wonderful area to recruit from.

We’re at about 180-200. We’re growing again from this time last year; we’re rebuilding again.

The challenge right now is that 2 percent vacancy -- it’s one of the biggest inhibitors to new growth.

We clearly have a need to get that extra space online.

CRAWFORD: We need more office and industrial space. We have about 2 million square feet that’s going to break ground, and it’s very much in need.

If we didn’t have sufficient office space, at the time, we wouldn’t have been able to attract Sunkist and Princess Cruises headquarters.

We’re looking specifically at the eastern corridor. Disney is going to create business momentum in general. We’re looking to plan for new office and industrial business parks from Needham Ranch and the Newhall and the SR-14 areas. That way we’re keeping people from commuting to L.A., and from one side of the valley to the other.

SCHROEDER: Some of that space will be available for use at the tail end of this year, and the rest in early 2015.

What will come online in the next 5 years?

CRAWFORD: There’s a lot in the pipeline, as far as office and industrial space. Some of those projects are approved for future phases. There will be other projects along the SR-14 at Newhall Avenue, as well as the Vista Canyon approved for office and residential. Further down the road is the Whittaker-Bermite site, which is almost 1,000 acres. There’s a lot in the pipeline that’s already been approved and just waiting for the market, or is in the development pipeline for after that.

Is there any speculative work going on?

CRAWFORD: Some of this is spec work, though most of it is build-to-suit.

SCHROEDER: There’s enough strong interest that they’ll probably be leased before they’re ready.

CRAWFORD: A lot of businesses want to be the second into a new business park. Being the first in a new park is hard. Most are waiting to be  people that are all waiting to be No. 2, 3 and 4. So as soon as the work starts, there’s going to be a backlog of interest.

What are the top issues for attraction and job growth?

WISEMAN: I think there still needs to be some economic recovery. Something is still holding people back.

HALL: From a hiring standpoint, we’re not in a rush to hire a bunch of people right now. We’re cautiously optimistic about the future, but we’re not going to hire a bunch of people on just a promise. For six months, we held jobs just to make sure things turned out.

KLOCKO: People haven’t forgotten 2007 to 2009 yet.

Do you think the economy still has people a little gun-shy and cautious in terms of hiring?  

HALL: Yes. Layoffs are painful and horrible for morale. You don’t want to do that.

SCHROEDER: We’ve had periods of great optimism during recovery that turned out to merely stall. That has made businesses very cautious. It’s greatly challenging in California because the legal and regulatory framework is more complicated than any other state. The hurdles a business has to jump through are substantial.

We focus our efforts on companies that need to grow, but that are within a reasonable radius of the SCV. It’s unlikely to attract out-of-state.

Another area we’re increasingly evaluating is foreign investment. How can we help businesses enter the U.S. market and locate in Santa Clarita?

We are a foreign trade zone, which provides significant financial and cash-flow benefits.

How do you pursue leads for foreign attraction?

SCHROEDER: We will be pursuing an international trade trip with Supervisor Michael Antonovich to China, exploring leads. If they are interested in being in Southern California, without some of the problems associated with some areas of L.A. County, than the SCV is very attractive.

How can you use the key clusters to attract foreign trade?

SCHROEDER: We envision the EDC as being a single point of contact for foreign businesses. We can position the SCV positively by providing all the different needs for a foreign company.

 How much of the EDC’s business is retention?

SCHROEDER: Our focus on retention is growing. It’s not as glamorous as attraction, but it is less risk than recruiting new businesses. It’s an important part for us to have outreach to hear the needs and wants of local businesses. It’s an increased focus for us, starting this year.

The regulatory climate is a challenge for all of California, but Santa Clarita has an easier job of it. Working together is the only way to be successful. We all need to be heading the same direction.

Will 2014 be a good year for growth?

HALL: For us, it will be.

WISEMAN: For AMS, it will be. In a tough economy, companies continue to look for ways to outsource and mitigate cost. We’ve also won a new decent-sized account.

 

Local Workforce:

Roundtable participants shared some information about the local job market in the Santa Clarita Valley.

Within a 45-minute commute from the Santa Clarita Valley, there’s a workforce that you can access of 2.7 million people. And the SCV has a highly qualified and educated labor pool.

Holly Schroeder, SCVEDC

About 55 percent of SCV residents are commuting outside the area. If they are commuting, a city survey showed those people are willing to take a 10 to15 percent pay cut to work locally.

Ken Wiseman, AMS Fulfillment

There are about 100,000 people in the SCV workforce. About half of them commute outside the valley. We have about 75,000 jobs in Santa Clarita, which means we’re importing about 25,000 employees into Santa Clarita.

Jason Crawford, city of Santa Clarita

The job outlook for 2014 looks particularly bright in four states in the west – California included among them. Of the 50 states in the country, California ranks 15th for job growth in the coming year. 

Pew Research

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