Report finds lakeshore businesses are in good shape
Most are spending on R&D, introducing new products and planning to expand.
A West Michigan business report provides a snapshot of continued strength of Ottawa County and northern Allegan County businesses despite talent development concerns.
Lakeshore Advantage, a West Michigan-based economic development organization, last week released its fifth Business Intelligence Report, which highlighted regional businesses’ continued investment in research and development, projected growth and the challenge of talent acquisition.
The 2015 Business Intelligence Report is intended to provide a snapshot of the region’s business environment through data-based information and one-on-one interviews with more than 180 primary businesses throughout Ottawa and northern Allegan counties.
Jennifer Owens, president of Lakeshore Advantage, said it is a great way for the organization to evaluate its strategic plan on a yearly basis to ensure it is making investments in the areas that will best impact companies in the region.
“Internally, it allows us to do a gut check on a regular basis and say, ‘We are listening to the voice of the customer,’” said Owens. “All of our existing companies who participate in this survey regularly quote the data and research, and use it to drive their internal programs and policies. They often want to know what the business environment is like out there. We really use it be a great guide for them to see they are not alone in the challenges they are facing, or there is a sense of community.”
This year’s report indicated area companies are leveraging new products to grow sales and market share. Approximately 90 percent of respondents reported introducing new products in the last five years and nearly 85 percent plan on introducing new products in the next two years.
Due to the number of manufacturers in the area incorporating R&D activities and engineering discovery positions within the production facilities, Owens said it really helps area companies maintain their strength.
“The interesting piece is, I think a lot of people think research and development stands alone. What we do so well here are the majority of our manufacturers have strong engineering, early-stage production, prototyping capacities, so they are working and are engrained in our production plants,” said Owens. “They are working not only to improve what is being produced today but also to create what could be produced tomorrow. The new products are designed side-by-side with the production work.”
While only 45 percent of companies were spending more on R&D as of 2014 compared to 52 percent as of 2013, approximately 77 percent reported increasing sales in 2014. Of those companies, roughly 53 percent experienced growth from international sales in 2014, compared to 41 percent in 2013.
More than 73 percent of participating businesses have expansion plans for the next three years, which is estimated to result in approximately 1,700 new jobs. Companies with decreasing sales also declined from 6 percent in 2013 to 2 percent in 2014, according to the report.
With the rapid growth among lakeshore businesses, the report indicated the unemployment level for the region has declined from 12.4 percent in 2009 and 6.2 percent in 2013 to nearly 4.7 percent in 2014 for Ottawa County. The unemployment level for 2014 is the lowest since 2005, which was at 5.2 percent.
Of the participating companies, 76 percent indicated they are experiencing challenges with recruiting talent, up from 71 percent in 2013. Approximately 33 percent of companies reported an increasing number of unfilled positions, while 64 percent have stabilized unmet workforce needs.
To address the talent and workforce challenge, Owens said the best way for a company to ensure its future is to have an internship program because it is a great way to expose high school students to the business.
“Unfortunately, there is not a one-size-fits-all approach to talent. It depends on what type of talent they are looking for,” said Owens. “When you are looking at recruiting technical talent, degree talent, I would encourage all companies to start a very robust internship program. It has been proven individuals are more willing to accept positions at companies they have already had an experience with through an internship.”
Area employers are investing in their existing workforce with employee training and skill development, according to Owens. As of 2013, roughly 37 percent of companies were increasing spending in training internal employees, while that number shot up to nearly 59 percent in 2014.
“A lot of employers I am seeing now are looking at those entry levels that have the capacity to grow into a skilled trade position and investing in those individuals,” said Owens. “That will be a very important element for any company to be successful.”
Lakeshore Advantage partnered with Ottawa County Michigan Works to secure more than $800,000 in Skilled Trades Training Funds to help finance employer-driven programs to train existing employees. In 2014, nearly 37 companies benefitted from the funds and trained 902 existing and 187 new employees, according to the report.
Lakeshore Advantage also is working with the Ottawa Area Intermediate School District to connect students with more than 30 participating companies in the career preparedness program known as “futurePrep’d.” The program was designed in collaboration by Haworth, Herman Miller, Lakeshore Advantage and the Michigan West Coast Chamber of Commerce. It offers a number of services and opportunities, including connections, Skills4Success, WhoAmI, Summer Immersion, Early College, iChallengeU and Ladders2Success.
The iChallenge U competition is a two-week educational program for juniors and seniors in high school to work on a challenge presented by various employers and present a solution to a team of leaders.
“On the talent development side, there are a lot of different facets we are tackling. We have a very close relationship and work side-by-side with Herman Miller and Haworth to pilot many of the programs that are now being run by the Ottawa Intermediate School District,” said Owens. “Those programs start as early as eighth grade to expose students to in-demand careers.”
The economic development organization also has partnered with Hello West Michigan to assist companies in establishing internship programs, and has collaborated with the West Coast and Grand Haven chambers to host a series of intern education events during the summer.
“The economic development playing field has changed quite a bit for us in this time of great economic boom. We are focusing more of our time in attracting talent and individuals, and continue to respond to attraction opportunities,” said Owens. “If we can’t fix the talent challenges and disconnect of what our employers need, then long-term we will not continue to grow as a region.”
The 2015 Business Intelligence Report uses a national data analytics tool known as Synchronist Business Information System to compile the information. The fifth edition of the regional business climate study is also used to show perspective companies looking to relocate or expand in the lakeshore region the business climate in the community, according to Owens.