Region Must Focus on Talent to Grow HQs, Professional Services

YOUNGSTOWN, Ohio – Northeastern Ohio needs to focus on developing its talent pool – particularly in information technology – and leverage its position as a low-cost, high-quality environment to reinforce its position as a location for headquarters and professional services, an analyst with Team Northeast Ohio said.

The 18-county economic development organization, also known as Team NEO, released its Quarterly Economic Review today, which focuses on headquarters and professional services.

The document has a dual mission, said Jacob Duritsky, vice president of strategy and research at Team NEO. The first is to promote the growing area of northeastern Ohio and to share that story with the region. The second is to get this information into the hands of companies that might be looking to relocate and the site selectors that work with them to make those decisions, Duritsky said.

Jobs in these sectors also have a significant multiplier effect, he pointed out. Every direct job in headquarters and professional services creates another two to 2.5 indirect and induced jobs, he said.

“These industries also support a host of other sectors,” he continued.

Employment in headquarters and professional services totals 187,000 in the 18-county region and is projected to rise, according to the report. Concentration of headquarters employment in the region is second highest among the top 20 metropolitan areas in the country, the report found. Total employment in the region is 1.9 million.

“While we’ve certainly seen declines in some sectors of the economy like manufacturing, from an employment perspective over the past 15 to 20 years we’ve seen those losses offset by gains in other sectors of the economy,” Duritsky said. “One of the most notable that has really kept our employment level relatively flat and not declining is headquarters and professional services.”

Team NEO points to a couple factors contributing the to the concentration of headquarters employment in the region.

Among these, Duritsky said, is “significant investment in regional professional services and headquarters operations” in the region over the past decade, as with Sterigenics’ move to Broadview Heights from Chicago and, in the Mahoning Valley, Anderson-DuBose Inc.’s move to Lordstown.

The region also has a base of long-existing headquarters, including the Goodyear Tire and Rubber Co. and the Timken Co., he said. Even as some companies have moved production to less expensive areas, they have maintained their headquarters here. “Maybe you’re not making as much here with as many people, but you still run the function of the headquarters from northeastern Ohio,” he said.

Along with Anderson Dubose, which recently expanded its Lordstown facility, companies with headquarters in the Mahoning Valley include Covelli Enterprises and AVI Foodsystems in Warren, Simon Roofing in Boardman, B.J. Alan Co./Phantom Fireworks in Youngstown and Aim NationaLease in Girard, said Sarah Boyarko, senior vice president for economic development.

One of the most critical factors in maintaining growth in headquarters and the professional services sector is talent development, Duritsky said, noting officials with Nestle said those are what drove their decision to place the management of the company’s pizza division in Solon.

“So in an area where working remotely is more accessible, where the dynamics of how businesses operate are changing, having a robust market for talent is increasingly important,” he stressed.

Talent those companies are looking for involves information technology, he added. While northeastern Ohio isn’t seen as a “huge IT market,” the region has a large footprint of professional services and corporate headquarters that require IT talent.

Local educational partners need to be engaged to ensure that the Mahoning Valley can meet the workforce demands of companies. But coordinating education to address that demand requires a long-term approach, Boyarko said.

One of the things economic development professionals have seen as companies move from more expensive metros is back-office functions like IT and accounting that “simply don’t warrant really big-city rental rates and cost of living rates,” Duritsky said.

Relocating those functions to a region like northeastern Ohio allows those departments to operate more cost effectively and lets employees operate in an environment that offers a better quality of life for less money, lower commute times and other benefits.

In comparison to larger cities, amenities Mahoning Valley communities might lack that employers in the sectors might want include walkability and access to public transportation, Boyarko said.

“We don’t have nearly as much headquarters-type office space that a larger metro market might have, with parking on site,” she added.

The Regional Chamber’s pending project list is “fully industrial opportunities” that may have a professional services component to them, Boyarko said.

“We are talking with a number of companies that would involve either a headquarters operation or a division headquarters operation,” she added. The chamber also often works with companies that might have a “headquarters opportunity” in the future, but a division headquarters is more likely.

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