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Expansion Plans A key factor in retaining businesses in Burlington and Chittenden County is understanding where local companies choose to expand, as well as their reasons for doing so. Since 1994, there are several trends worth exploring when observing business expansion plans. A significant number of companies are no longer planning to expand at their current site, and the number which plan to expand at a new site in Burlington remains small. There is some positive news in that fewer companies plan to relocate outside of Vermont, but more plan to relocate out of Chittenden County. The size difference in companies surveyed may partially explain this trend; given that large regional employers may plan to expand statewide while remaining in Vermont, but nonetheless, the trend is positive.
The chart below catalogues the given reasons for companies' expansion predictions (for those planning to expand outside of Chittenden County). The top three reasons given in both years are Closer Proximity to Markets, Land/Building Availability, and Taxes. While taxes moved from first to third from 1994 to 2008, (a positive sign as it is more challenging for government policy to affect the other two expansion factors), that taxes continue to remain a disadvantage for businesses is a challenge which more can still be done to address.
Business Assistance Organizations To measure firms’ perceptions of local business assistance organizations, the survey asked whether businesses had used any of a number of local business assistance organizations, and if so, what was their opinion of the services they had received. There were relatively few differences between 1994 and 2008. More than three-quarters of businesses were familiar with the Chamber of Commerce, UVM, and the Vermont Economic Development Authority (VEDA). More than 25% of businesses had used these three companies, Greater Burlington Industrial Corporation (GBIC), and the Vermont Economic Development Department (VEDD). Of these most-used companies, all except UVM received at least a 66% favorable response rating. The highest favorable rating was received by GBIC, and the Chamber of Commerce has the highest increase in favorable ratings, moving from 53% in 1994 to 74% in 2008. The sample sizes of businesses who had used each organization were too small to adequately determine whether opinions had changed significantly, but overall, both familiarity and opinion appeared to match up relatively evenly.
Recruitment While unemployment has remained relatively low in the past decade, one of the main challenges in supporting businesses and workers remains understanding the characteristics of occupations in high demand. This understanding, particularly of any major shifts over time, can enable new training programs and other efforts to assist the business and labor markets. The results from this survey question show a general trend where employers have the most difficulty finding qualified workers with technical, engineering, and scientific skills. This field has greatly increased since 1994, when there was only moderate demand for these workers. There also remains relatively strong demand for skilled and semi-skilled production workers, although this has declined since the last survey, likely caused by the continued decline in manufacturing. Unskilled, clerical, and administrative/managerial employees have remained relatively easy for businesses to find; however, sales and marketing employees have become significantly easier to find since 1994. Likely causes of these effects include the increased general education levels of Burlington and Chittenden County residents and the student population, which supports a large supply of unskilled, clerical, and sales workers. This clear disparity between technical and professional/pre-professional work suggests that continued training programs for technical fields may yield significant results, as there remains a high demand for these workers.
Training Needs Responses to whether specialized employee training would be helpful led to less clear results than the previous question on recruitment. Each company had a different protocol; a significant number of organizations responded that they completed all employee training internally or had no interest in training assistance. Businesses that did respond had an even balance between the same need for managerial and production employee training. For management, companies were primarily interested in general Management Training and Problem Analysis Techniques. Production employee training focused on technical skills such as CNC Operation, Blueprint Reading, and Computer Aided Drawing or Manufacturing.
Energy Use and Conservation A new section on the 2008 business survey asked about energy use and conservation, expanding on two questions originally in the demographics section of the 1994 survey. Given the recent increase in energy prices, and as Burlington updates its Climate Action Plan, understanding local companies’ views on energy use can provide a baseline for future efforts to help businesses cut costs and reduce their greenhouse gas emissions. The responses to this survey question were largely positive. 84% of companies agree or strongly agree that energy is a major cost for their organization, twice as many as in 1994, and nearly 75% of companies agree or strongly agree that they would be interested in learning more about energy conservation programs, up from 47% in 1994. Again, over 80% and 90% of companies surveyed respectively agree or strongly agree that their organization is already working to reduce their energy use and that energy reduction programs would benefit their company.
Best Factors of Operating in the Region Both the structural and perceived benefits and challenges of operating in the region are important in attracting and retaining businesses. What companies view as the best features of the region include some that have been promoted along with others that may have been overlooked. By examining these views, Burlington has the opportunity to possibly brand or further advertise certain opportunities while publicly addressing or solving the difficulties that have been raised. Quality of life is by far the greatest advantage seen by companies to operate in the area, with 72% of respondents referring to it as an advantage and none as a disadvantage. This response moved from being ranked 5th in 1994 to first in 2008, where it received more than twice as many votes as any other category. This is an area where the region can continue to use this reputation to attract more companies that appreciate this value (and who will in turn support efforts to retain and improve this feature). Burlington also has the opportunity to modify its definition of what quality of life includes, whether this is environmental sustainability or livable wages. Additional positives to this include that the rank of companies referring to this as an asset of operating in the area increased from 5th place in 1994 to 1st in 2008. While availability of labor and quality of schools are seen as positive by a number of companies, others are still having significant difficulty recruiting qualified applicants (as seen in the list of the most challenging operating factors). This disparity may indicate a gap either in the types of employees the companies recruit or that more needs to be done outside of traditional educational methods in providing needed skills and matching jobs and qualified employees. Telecommunications has also declined slightly as an asset, as has utilities capacity. These factors remain a net positive for operating in the region; however, a likely cause of this decline in that infrastructure development in the region overall has simply not kept pace with other locations across the country, or that a basic level is simply taken for granted. Telecommunication needs have also changed over time, as companies have become more dependent on specialized technology needs such as website development which the city is less able to support or influence.
Most Challenging Factors of Operating in the Region As of 2008, property taxes are now viewed as the single most difficult factor of operating in the region. This indicates a significant challenge for Burlington and the surrounding community, as local governments must balance efforts to maintain services while retaining businesses and homeowners struggling with high property taxes. Zoning also remains a challenge, but the land and buildings are more available than they were in 1994, hopefully maintaining a balance that allows for sustainable development. Energy costs will continue to be an important factor in local businesses, particularly in the realm of transportation. That energy costs are now high on this list is consistent with the previous question regarding energy use and conservation and indicates that efforts to help companies reduce their energy bills may be more successful than past attempts have been.
Conclusions In today’s economy, Chittenden County businesses appear hesitant, as the slowing national economy and rising costs are leading to more cautious growth. While in 1994 projected 3-year growth was nearly double growth from the past 3-year period, in 2008 companies are projecting slower growth than took place from 2004-2007. However, this data projecting the number of new hires is likely somewhat skewed by the current perception of a national recession and its potential impacts. The years from 1994-1997 also involved the national economy’s recovery from the prior recession, explaining the period’s high employment growth rate. Property taxes and energy costs are leading concerns for businesses, and some employers still find it difficult to recruit employees, particularly in technical fields. However, most feel the labor market is relatively strong and appreciate Burlington’s quality of life. Many companies have also already started or are open to support in reducing their energy costs. The large companies surveyed have few financing problems and most plan to expand, but not in Burlington. As Chittenden County has become more developed, more of these companies are expanding to outside the region, although remaining in state. Most companies are either aware of or have used a number of the local business assistance organizations. Fewer than 10% had an unfavorable experience, and approximately two-thirds had a favorable experience with a given organization. Recommendations
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Page last updated March 29, 2010 |
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