UNION COUNTY BUSINESS RETENTION & EXPANSION

SURVEY ELEMENTS AND RESPONSESPRODUCTS AND SERVICESFirms interviewed by the BR&E teamswere asked to identify the attributes thatdifferentiate the business from theircompetitors. As shown in Figure 2, therespondents identified product/serviceoffered by the firm and service provided tothe customer as the top differentiatingattributes of their businesses. Quality,leadership/management, and price wereidentified to a lesser degree.Figure 2Defining Attributes of Quality35%Product/ServiceOther68%14%Sales of Products/ServicesSlightly less than one-half of the firms interviewed (46%) stated theyhad an increase in sales over the past three years. A slightly lowerpercentage reported they experienced a decline in sales over the sameperiod of time. [See Figure 3]As to the degree of increased or decreased sales over the past threeyears, the average increase in sales was 21% and the average reporteddecrease in sales was 31%. The range of increased sales was 1% to500%. Three firms reported their increased sales at 100% or more.These three estimates were not included in the averaging of reportedincreased sales to avoid distorting the results. For decreased sales, thedecrease ranged from 5% to 70%.Figure 4Sales Three Years ForwardNo Report14%No Change16%DecreasedSales5%IncreasedSales65%Figure 3Sales Past Three YearsNo change11%DecreasedSales43%IncreasedSales46%Looking ahead three years,the respondents were far more optimistic. [See Figure 4]Nearly two-thirds of the firms expect to see an increase insales and 16% expect sales to remain level. Only two firmsreported an expectation of reduced sales and neitherprovided an estimate of the expected reduction.Asked to explain the decline in sales for the past three years,respondents identified the economy (22% of the firmsinterviewed) followed by the decline in construction in theCounty (14%), competition (5%), and changes in consumerspending (5%).Those reporting an increase in earnings over this period of time cited increased sales (14%), the strengthof the agricultural sector of the economy (5%), and the quality of the product/service offered in themarketplace (5%) as factors promoting increased sales. Other factors supporting increased sales werechange in prices, entering new markets, and offering new products/services.1

As for the next three years, the expectation of economic recovery was cited by 8% of the firms as wasexpected increase in construction activity and the benefits of entering new markets. Also mentioned ascauses for optimism were product quality, new products/services offered by the firm, continued strengthof the agricultural sector, changing consumer preferences, and increased consumer spending.Emerging Technologies or Market ForcesSeventy percent of the respondent firms recognized emerging technologies or market forces that willhave an impact on their businesses.The most often cited impacts on businesses were: rapid change in use of the internet, social networkingand advanced software (27%), and technological advances in equipment and machinery(27%) as causalagents to change. Other impacts noted were the state of the general economy (if improving or notimproving), new competition from local, regional, national, and international sources, customerpreferences, and the need to expand one’s market reach with new products/services and/or entering newgeographic areas.As for the nature of the impact of these forces on the local business (positive or negative), respondentsoffered a mildly positive perspective. Thirty-eight percent see an impact on production (30% beingpositive and only 8% being a negative impact on production) and 43% see an impact on sales (27%being positive and 16% being a negative impact on sales).BUYER/SUPPLIER LINKAGESFirms interviewed were asked to provide information on where they made their sales of goods andservices and where they purchased the goods and services used by their business. The information canbe used to identify industries and businesses for targeted recruitment that would support local businesses.Sales of Products/Services – Geographic RegionThe firms were asked to identify where,geographically, they sell their products or services.While there is some confusion in delineatingbetween the local and regional market area, thesetwo geographic regions are the most significantmarkets for locally generated goods and services,followed by the Pacific Northwest. [See Figure 5]Figure 5Sales by RegionLocal78%Regional59%Pacific Northwest32%National19%International19%2

Asked to place a percentage estimateof their sales to these regions, thecompanies were on a whole lesscertain and precise. The geographicareas show again the local, regional,and Pacific Northwest markets are, ona whole, more significant than thenational and international markets.[See Table 1]Table 1Where Firms Sell Products/Services(Number of firms reporting for each percentile group)Percent of 12863Pacific Northwest3658Nationally Internationally312613030205Over three-quarters of the firms interviewed (78%) proffered an estimate of sales to the local market andtwenty firms provided regional estimates of sales. Only seven interviewed companies reportedinternational sales. Four firms report their national sales represent 50 percent of their sales and twofirms have international sales of 50% to 74%. The average reported sales within each region, asprovided by the firms, showed the local and regional markets combined to be most important to firmsproviding data on sales. [See Figure 6]Based on the responses given by the interviewed firms, the“Local” and “Regional” markets are most important to thesefirms. As provided later in the survey, interviewed firmsraised the need for growth, both in number of businesses andin population, as a critical factor influencing future well-being.Figure 6Average Percentage of Sales By RegionLocal62%Regional37%Pacific Northwest39%Asked to estimate the percentage of sales over the Internet,National39%twelve companies (32%) report they do have sales over theInternational13%Internet. Of those twelve companies, one firm reported theirsales over the Internet comprised 50% of their company sales.The remaining eleven companies estimated sales over the Internet ranged from 2% to 20%. The averagesales attributed to the Internet was 8%. It is noted that seven of these eleven companies reportedInternet sales of 5% or less.PurchasesFirms were asked where, geographically, theypurchase their goods and services. Therespondents reported they made theirpurchases across the geographic landscape(Figure 7).Figure 7Purchases of Goods/Services By RegionLocalRegionalPacific Northwest41%32%41%National41%Twenty-one of the companies interviewedInternational5%(57%) report using the Internet to purchasegoods and supplies. For eleven companies,the percentage of purchases using the Internet comprised 15% or less of the total purchases made by thecompany. The remaining ten companies report their purchases over the Internet to be in the range of 25%to 99% of the company’s purchases (averaging about 73% for this group of companies). [See Table 2]3

Table 2Purchases Over the InternetPercent of purchases ofFirms reporting purchasesgoods and services overof goods and service overthe Internetthe Internet75-10016%50-748%25-493%1-2430%No report43%Office supplies and maintenance items and services are themost often cited goods and services purchased in UnionCounty (60% of the respondent companies) followed byvehicle purchase, servicing, and fuel (49% of therespondents). Other goods and services obtained locallyand mentioned by at least one company are machining andwelding services, parts and shop supplies, accounting,payroll, and billing services, shipping, and food.Targeting New BusinessesRespondents were asked to identify types of businesses to be targeted for recruitment to Union Countythat would be supportive of their business. A small percentage of respondents offered to address thisquestion. Manufacturing businesses were identified by five respondents. Other businesses identifiedwere construction related businesses, steel fabricator, cabinet maker, laser cutting service, and advancedprint shop. Most of the respondents simply stated the need for growth – new jobs and more people.INDUSTRY EVALUATIONAsked if their industry was growing or not growing, nearly three-quarters of the respondents (78%) seesales and/or production within their industry as increasing or remaining unchanged. Only one-quartersee a decrease. [See Figure 8]Nearly two-thirds (65%) of the respondents do not see theirindustry moving operations off-shore. Slightly more thanone-quarter (27%) do see off-shoring occurring in theirindustry.Twenty-three percent of the interviewed companies report theshare of market increasing among their foreign competition,7% see the share as unchanged, and 11% see the market sharedeclining among foreign competitors. Forty-one percent ofthe respondent companies do not have non-U.S. competition.Figure 8Industry Sales/Production MENTEmployment NumbersAll thirty-seven companies provided employment data.These firms reported a cumulative current employmenttotaling 3,420. Three years past the cumulativeemployment was 3,479; three years in the future theestimate is 3,699.Table 3Cumulative Employment ReportedPercent ChangeReporting period% changeThree years ago to currently-1.7%Currently to three years ahead 8.2%Three years ago to three years ahead 6.3%4

The firms expect full timeemployment growth overthe next three years and arebound from the job lossesfrom the past three years.Firms ReportingIncreased employmentTable 4Employment: Past, Present & FutureThree years ago toCurrently toCurrentlythree years ahead19%62%Decreased employmentNo changeWhere 54% of the firmsNo reportreported a decrease inemployment numbers over the past three years, 62% expectto see full-time and part-time employment numbers increaseover the next three years. Table 3 and Table 4 summarizethe employment changes for the past three years and theexpectations of the firms going forward in time.The numbers provided by the respondents for full-time andpart-time employees demonstrate an optimism that, goingforward, the job market will improve. See Table 5.Three years ago toThree years ahead41%54%3%32%19%8%32%3%14%14%Table 5Employment: Full-time vs. Part-timeF/T3 years ago2,619Currently2,4733 years ahead2,6733 years ago to CurrentlyCurrently to 3years ahead3 years ago to 3years ahead-7.6% 9.4% 10.0%P/T816896925 9.8% 3.2% 13.4%Over one-half of interviewed companies (51%) expect to increase full-time employment over the nextthree years, and 3% of the interviewed firms expect to reduce the number of full-time employees. OneTable 6quarter of the firms look to addFirmsReportingChangeinEmployment –Full and Part-timepart-time workers.Firms ReportingDistribution of employeesamong occupations within thefirms will not change goingforward, as shown by Table 7.IncreasedDecreasedNo change3years ago to nowF/T14%43%35%P/T8%16%71%Now to 3years aheadF/T51%3%38%P/T24%3%68%3years ago to 3yearsaheadF/TP/T35%24%24%14%32%57%Table 7Seasonality. Nearly one-half of theDistribution of Employees By Occupationfirms (49%) indicate they have a peak seasonCurrentlyThree years aheadfor employment. Nearly all identify summer as4.0% Production (unskilled/entry)3.6%25.3% Production (semi-skilled/skilled)25.6%the season, some combining the summer season18.2% Clerical/office17.8%with either spring or fall. Seasonal employee4.7% Sales/marketing4.7%numbers were not clearly differentiated from28.5% Professional/management/technical28.5%19.4% Other19.9%part-time employees by many of the respondentfirms. For the limited number of responses clearly identifying seasonal employment, the aggregatenumber did not vary appreciatively over time.Outsourcing. Outsourcing of business activities is not a significant issue with the local firmsinterviewed. A large majority of the firms (70%) report no outsourcing outside the region of any aspectof the business. The outsourced business activities that are reported are financial services, billing andpayroll services, and service calls. No specific geographic locations are reported by those companiesresponding affirmatively to the outsourcing question.5

WagesRespondents were asked to provide starting wage rates for unskilled/entry production positions, semiskilled/skilled production positions, and clerical/office positions. The responses were mixed dependingon the relevancy of the question to the firm being interviewed. Of the firms reporting starting wages forunskilled/entry production jobs, 79% reported starting wages between 8.50 and 11.50 per hour. Forsemi-skilled and skilled production jobs, the majority of firms (73%) reported starting wages at or below 16 per hour, and the balance of the firms reported a starting wage of 17 to 29 per hour. For the firmsproviding starting wage data for office/clerical positions, one-half of the responding firms reportedwages in the range of 10 to 12 per hour. Eleven percent of the firms reported starting wages forclerical/office employees as 14 to 17 per hour. Table 8 summarizes the wage data reported by thefirms.Table 8Starting Wages – Selected Occupation CategoriesOccupationsPercent of Firms Average wageRespondingreportedProduction (unskilled/entry)51%10.50/hr.Production (semi-skilled/skilled) 73%15.00/hr.Clerical/Office78%13.50/hr.One-half of the respondents (51%)Wage rangereport they have conducted a wagereported(8.50 – 17.21)analysis within the last three years(9.25 – 25.57)(43% answered no). The firms(8.50 – 26.57)reported using a variety of methodsfrom very informal, anecdotal surveys to using the Oregon Employment Department to utilizing aprofessional firm to provide a comprehensive wage analysis.Benefits to EmployeesNearly all the firms interviewed (90%)report they provide some benefits to theiremployees. One firm did qualify theiranswer to state they limited benefits toonly the management. It is unknown howmany other firms may have similarrestrictions and qualifications attached totheir benefit package.Figure 9Benefits Offered by FirmSick Leave65%Vacation90%Holidays90%Health InsuranceRetirement83%87%Other benefits, as reported by two ormore companies, are:Long and/or short term disability (11%)Dental/vision insurance (8%)Tuition assistance (5%)Bereavement leave (5%)Floating leave day (5%)Clothing allowance (5%Thirty percent of the firms report they are looking to change their benefit package in the near future (62%report no expected changes). The primary change, as reported, will be to require employees to pay alarger share of their health insurance premium. Other changes reported include starting a profit shareprogram and developing a 401(k) contribution plan.6

RecruitmentSixty-eight percent of the firms report they do have problems recruiting employees. The overwhelmingproblem is recruiting and retaining skilled and educated workers. Local wage rates, spousal satisfaction,and lack of advancement opportunities are causal factors explaining the recruitment difficulties.Housing availability/price was an issue cited by 16% of the firms and drug screening issues by 30% ofthe firms interviewed.Nearly three-quarters of the firms (73%) say they expect problems with recruitment in the future.Recruiting skilled/educated workers to the county is again cited as a main difficulty as is retainingskilled workers. Budget constraints in the future, local wage scales, and the lack of entry level jobs(many have been eliminated due to budget constraints) are specifically cited as impediments torecruitment going into the future. Several respondents identified the age of the local workforce and the“retirement bubble” coming the next few years as a serious concern.New strategies to attract skilled/educated workers include attempting to maintain or improve wage scaleand benefits, offering a signing bonus for skilled new workers, offering a bonus to current employeeswho recruit new workers, outsourcing, and using professional recruitment agencies or the OregonEmployment Department to find qualified workers.Employee TurnoverOver three-quarters of the firms (78%) answered no to having a problem with turnover (16% said yes).The primary causes of turnover cited were drugs and alcohol use, attendance issues, and, acquiring ormaintaining a driver’s license (for several firms, a commercial driver’s license [CDL]). Housing wasnot mentioned as a factor driving employee turnover.Only one-quarter of the firms (27%) expect problems with employee turnover in the future. As noted,an aging workforce and looming retirement bubble is cited by several companies.

The Union County Business Retention & Expansion Program (BR&E) was initiated in 2011 under the sponsorship of the Union County Economic Development Corporation (UCEDC), the Union County Chamber of Commerce, the City of La Grande and the Union County Board of Commissioners.