Bringing Talent to Small Towns

Small towns will need to recruit talent the way they recruit companies, which means pursuing four strategies.

First, just as prospective employers need to hear a compelling pitch, so do prospective employees — and their spouses. Small towns need to tell their stories. The last few years opened a door. Workers seem to increasingly value what small towns offer: space, affordability, the outdoors. And of course, remote work frees workers to live anywhere. But open doors don't guarantee new workers will walk in. Each town is now competing with every other small town. That's where the story comes in.

These stories almost always start with a sense of place, and there are a lot of options. In Lake City, S.C., for example, a nine-day art festival and competition has expanded the creative economy and brought crowds to town. With displays in a wide array of local venues, the town isn't just showcasing art — it's showcasing what Lake City has to offer.

Other towns create a sense of place by rehabilitating their downtowns and bringing in shopping and restaurants. Danville, here in Virginia, comes to mind. It has developed its riverfront, building apartments with nearby dining establishments and creating a lively, downtown feel.

Towns can also leverage nearby amenities. As Fayetteville, W.Va., transitioned away from coal, it turned to outdoor recreation, which in turn attracted entrepreneurial types who then created an entrepreneurial culture that persisted.

If a town can't tell a story on its own, we are seeing regions work together to bundle one. Southwest Virginia has the Crooked Road heritage music trail, the historic Barter Theatre in Abingdon, the Spearhead Trails for adventure, and wineries, breweries, and shopping. In southern West Virginia, we've seen similar efforts built around the Hatfield-McCoy Trails.

These stories bring in new talent. They also help encourage kids to stay.

Second, just as recruiters make a move easy for businesses, small towns need to make moving easy for workers. In today's world, the ultimate barrier to moving is housing. Every town seeing success is experiencing this challenge. Simply put, the math isn't working to put new residents into affordable homes. We don't have enough supply. And building is getting ever more expensive with construction, interest, and labor costs rising.

Small towns face their own issues. Their housing stock is often older. Rough terrain and absentee landlords often inhibit construction. Developers may have better options elsewhere.

But can we change the math? If we can find the funding to create buildable sites for businesses, why can't we develop buildable homesites for developers? If cities can transform office space into apartments, why can't small towns tackle the barriers to repurposing their old commercial or municipal spaces into residences?

And there are ways to motivate people to join their local workforce.

Let's start with child care. Finding and paying for high-quality child care can become so costly that it makes more sense for a parent to stay home. The United Way of Southwest Virginia has leveraged state and federal funding to expand access to affordable child care by creating a new facility, giving technical assistance to existing ones, and building up the sector's workforce — with the intent that local employers will support these facilities over time. In West Virginia, the Chamber of Commerce worked to get legislation passed last year to provide a tax credit to businesses that create a child care facility on their premises.

Transportation is also a motivator to connect people to places of employment. It has attracted some controversy, but beach communities have transported workers into their markets for years. The city of Wilson, N.C., is trying a more tailored approach; it has partnered with Via Transportation to replace its traditional bus system with an on-demand microtransit service. (See "Public Transit Rides Out the Pandemic Storm," Econ Focus, First Quarter 2023.) This allows riders to get curb-to-curb rides for a low price, saving time and expanding access to those who did not previously live near a bus route. Approximately half the rides are to or from work.

Finally, just as towns must grow their own local entrepreneurs, they also need to grow their own workers. Education and connecting locals to jobs is an evergreen challenge. But we are seeing a lot of innovation in this arena.

GO TEC (which stands for Great Opportunities in Technology and Engineering Careers) is helping build a pipeline of talent for Virginia's strategic sectors. Hoping to spark early interest, the program exposes middle schoolers to various career pathways, such as robotics and health care, as well as industry jargon and relevant equipment. Once in high school, students have access to industry certification programs and may then pursue postsecondary degrees.

The STEM East Network in North Carolina is training the key influencers in youth's lives — educators — to understand the workforce needs of the region. The hope is they in turn will help students visualize what participating in the local labor market could be like.

The Surry-Yadkin Works partnership, also in North Carolina, allows high school students to intern at local companies and access resources at their local community college. Students earn a real wage, a transportation subsidy, work experience, and the opportunity to get college credit and industry-recognized credentials. Nearly 70 percent of participants continued to work on their internships after finishing the experience.

It's trendy to say that post-COVID-19, we are in a "new normal." But I really do think, when it comes to small-town economic development, that the ground has shifted. The focus that employers are placing on talent is palpable, and the places that can supply that talent will be the winners. The good news is that small towns offer a sense of place and community that many of today's workers want.

A longer version of this essay was delivered as an address to the Richmond Fed's Investing in Rural America Conference on April 12, 2023.