A study funded in part by the Savannah Harbor-Interstate 16 Corridor Joint Development Authority shows that – unless population growth trends change – the region within a one-hour drive of the Hyundai Motor Group complex will fall about 2,200 workers short of the needs of area industries by 2027.
That doesn’t mean the needs of HMG Metaplant America alone, although the electric vehicle and battery manufacturing facility under construction at the Joint Development Authority’s nearly 3,000-acre “mega-site” in northern Bryan County is projected to employ 8,500 people after a hiring and production ramp-up lasting several years.
An established major manufacturer in the region, namely Gulfstream Aerospace, and a statewide utility company, Georgia Power, along with the JDA, put up the money for the study conducted by Wadley Donovan Gutshaw Consulting LLC. The study takes into account the needs of existing industries, as well as Hyundai and its suppliers and other new industries building plants in the JDA’s member counties: Bulloch, Bryan, Chatham and Effingham.
Benjy Thompson, CEO of the Development Authority of Bulloch County, speaking to the DABC board members during their Nov. 21 meeting, said “part of the good news” is that more people will move here for newly created jobs.
“We’re not sure if those numbers (census projections used in the study) take into full account the ‘Hyundai effect’ of even more people moving here,” he said. “But we know there will be more people moving here to live, work, play retire – all those things. Unfortunately, even with that growth we may not have enough.”
Tight labor supply
“Overall, labor supply is extremely tight in the region,” was the repeated heading of a series of slides in the PowerPoint presentation summarizing the study. One slide noted that “Much like the U.S. as a whole, the Savannah region is experiencing record low unemployment and is struggling to fill job vacancies.”
A chart showed unemployment rates of just 2.9% for the Ellabell region of northern Bryan County around the Hyundai Metaplant; 3.0% for the four-county Joint Development Authority, or JDA, area; and 3.8% for the overall region within a 60-minute drive time to the plant.
The four-county area’s 2022 population estimate was 484,646 residents, providing a civilian workforce of 238,343 willing adults, of whom 231,315 are currently employed, according to the study. For the 60-minute commuting radius, the population estimate was 699,907 residents, with 338,772 in the civilian workforce, of whom 329,220 were already employed.
The study shows projections of 4.9% population growth over five years for the four-county region and 4.6% for the 60-minute commuting zone.
Jobs outpace labor
“Starting in 2024, annual industrial demand will outpace professional jobs for the rest of the decade,” another of the report slides states.
A “one-time supply” of underemployed people – such as those working part-time who could go full-time – is expected to make up for a deficit of newly arriving or maturing workers to fill all of the new industrial jobs this year and in 2024, according to the report. But the Wadley Donovan Gutshaw Consulting, or WDGC, report projects that the supply balance will go negative in 2025.
A chart shows a shortage of 1,454 workers that year, increasing to 1,968 more jobs than workers in 2026 before the deficit peaks with a 2,206-worker deficit in 2027.
Of course, these look like precise numbers but are really just forecast estimates. Thompson described them as predictions of what will happen if nothing more is done to attract and retain more employees for area industries. The concerns addressed in the study, he said, are not unique to the Savannah region or Bulloch County but reflect challenges with the labor force across the United States.
“This study provides us with a better understanding of what we have today, and it helps us to know what to do next, but some of these numbers you’re going to see are going to be a little bit concerning,” he told the local board. “But they’re based on if we didn’t do anything to help it. So what I want to you remind you is we’ve got plans to help it get a little bit better.”
Development officials and community leaders in the JDA counties were already thinking about the labor supply issue before the Hyundai plant announcement, he said. Since then, the JDA has helped to fund and the study and hired a regional workforce director who helped coordinate it.
Director of Workforce Maria Whitfield, employed by the Savannah Harbor-Interstate 16 Corridor JDA since January, attended the Development Authority of Bulloch County meeting for November and helped with the presentation about the workforce study.
With the boom in industrial job creation, employee retention becomes increasingly important in the region, the study suggests, while indicating that 20% growth in typical entry-level production wages has occurred in two years, from around $15 to around $18 per hour.
$1 turnover gap
The survey of 40 participating employers in the region and interviews that WDGC did with some of them showed a major gap in annual employee turnover rates that correlates to a difference just $1 in entry-level wages.
“What’s interesting is, those that pay $17 or less an hour are experiencing 60 to 94 percent turnover,” Whitfield said. “Those (industrial employers) in the region that are paying $18 an hour or higher are experiencing 5 to 18 percent turnover. So that $1 makes a significant difference.”
But the study presentation – and planning toward a workforce strategy for the region – also suggests that other measures could help retain employees, such as flexible scheduling, progressive bonuses, on-site childcare, pet-friendly workplaces or steps to provide “fun at work.”
The report actually showed lowest current hourly pay of $12 and average pay of $17.75 for unskilled jobs, lowest pay of $16 and average of $21.30 for semi-skilled jobs and lowest pay of $20 and average of $27.13 for high-demand skilled jobs among participating employers. Average annual turnover for all employers was 35% of their positions.
A large majority of the manufacturing production jobs being created require a high school diploma but not a college degree, Whitfield noted. Thompson said he believes Bulloch County is ahead of the other counties in working with its kindergarten through 12th-grade schools on introducing students to the availability and requirements of manufacturing jobs.
The study report states that people leaving the military at the end of their service are an underutilized source of potential employees for industries in the Savannah region, with more than 3,500 separations from Fort Stewart and Hunter Army Airfield each year. Nearly 75% would prefer local employment, the report states.
Targeting 5 states
But with veterans and local high school graduates unlikely to fill all of the jobs, the JDA is also strategizing for “in-migration recruitment.”
“We will be working with a talent-attraction agency to identify some places in the United States to actually recruit some of those people to move from where they are to here,” Thompson said.
A marketing consulting firm has identified five states to be targeted in this effort – Florida, Tennessee, Illinois, New Jersey and Pennsylvania – because of their population and labor supply characteristics related to jobs in industry, Whitfield said.
A detailed executive summary of the workforce study may be found at https://www.savannahjda.com/workforce/
The workforce strategy is due out in January, Whitfield said.