Mining for talent

At the end of October, United Way of Southwest Virginia broke ground on its $25 million project to convert a former Kmart store in Abingdon into a regional workforce development and child care hub. It’s an attempt to address the region’s workforce shortage, one of the most pressing issues among area employers.

“There’s a lot of folks that aren’t participating in the labor force,” says Travis Staton, president and CEO of United Way of Southwest Virginia. “That means they’re not employed and they’re not working.”

Only about half of the region’s population participates in the workforce, leaving many local employers struggling to attract and hire employees. While Staton is still working to identify the many barriers contributing to this low participation rate, he and local employers are investing in new strategies, like bridging the gap between education and employment and providing affordable child care.

“You need to ask … why are they not participating in the labor force?” says Staton.

Southwest Virginia, which includes 16 cities and counties from Bland, Wythe and Carroll counties westward, was long defined by its natural resources, particularly coal. Like many of its Appalachian neighbors, the region’s economy has been historically tied to mining, and was ranked as the fourth most coal-dependent area in the U.S. in a 2021 report by the federal Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization.

During the past three decades, Virginia’s coal production — the majority of which occurs in Buchanan, Dickenson and Wise counties — has fallen from 46.6 million tons in 1990 to less than 10 million in 2020, according to the Virginia Department of Energy.

Although mining jobs are down, other economic development projects bringing employment to the region have helped put Southwest Virginia ahead of the rest of the state in terms of post-pandemic job growth. One example is the temporary Bristol Casino, which is looking to more than double its workforce in the next year as the permanent Hard Rock Hotel & Casino Bristol opens.

“We currently have about 600 team members and, by next July, we look to have 1,300 to 1,400 team members,” says Marina Alvidrez, Hard Rock’s vice president of human resources for the Bristol casino.

Hard Rock is “looking for personality” and a good attitude in prospective employees — the casino will provide all other training, Alvidrez says. With pay rates starting at $18 an hour, she’s confident about attracting workers, but says other employers are finding they have to increase salary offerings and other benefits.

“When I hear a new company bringing in 250 jobs … I cringe,” says Lennie Gail Mitcham, executive director of The Southwest Virginia Alliance for Manufacturing. “We’ve got 380-something companies who can’t fill the job openings that they currently have.”

Mitcham’s organization works with 41 of the more than 350 manufacturing companies across Southwest Virginia. On SVAM’s website, alliance members are currently advertising 154 job listings, some of which are looking to hire more than one person for a particular job, Mitcham says.

Job hopping

Unemployment is higher in Southwest Virginia (3.9%, compared with 2.5% statewide) than other parts of the state, but the larger gap is in labor participation. Just over half of Southwest Virginians participate in the labor force — about 12% lower than the state average, according to the Virginia Employment Commission.

On top of nationwide labor trends, Southwest Virginia has unique workforce barriers, primarily including transportation, housing and child care, Staton says. In 2021, 40% of mothers of children under 6 in far Southwest Virginia were not in the labor force, compared with 26% statewide, according to data from the University of Virginia’s Weldon Cooper Center for Public Service.

Another challenge contributing to the region’s low workforce participation is public health. More than 25% of Southwest Virginians of working age report having a disability, and the seven localities with the highest disability rates for people ages 18 to 64 are in Southwest Virginia, says Hamilton Lombard, a Weldon Cooper Center demographer.

And while Southwest’s remoteness causes more than two-thirds of young adults to stay in the region, a better rate than other rural parts of Virginia, that same remote nature can be a barrier to attracting economic development, Lombard says. So, given the region’s job prospects, he says, “young adults in Southwest Virginia are less likely to be employed or in the labor force, helping depress participation rates further.”

What’s more, the region is not immune from national trends already making it difficult for companies to recruit and retain workers.

“We’re in this new dynamic of what the employer-employee relationship looks like,” says Glenn Goad, CEO of Atlanta-based internet provider EarthLink, which has a new office in Wise County. Goad, who says he’s faced difficulties hiring and keeping workers, believes many of the problems he faces are national trends brought about by the pandemic. “With COVID, we created this new world for employees called ‘flexibility.’”

Goad has struggled to adapt his company to the desires of incoming employees, particularly the younger generation, he says, leading to significant turnover. At the beginning of six-week training sessions at EarthLink’s Wise, Goad offers $500 to any new hire who will attend every day of the training.

“I’ve been doing this long enough, I know I won’t lose my $500,” he says, adding that a training class will typically start with about 20 new employees and often end with five or six.

Southwest Virginia has a turnover rate of about 8.3%, about six percentage points higher than state and national rates, according to U.S. Bureau of Labor Statistics data. Across the country, turnover rates are higher among younger generations, with Gen Z having some of the highest job-hopping rates of any generation, a 2022 Gallup poll shows.

Younger workers “are willing to job-hop for 50 cents an hour,” says Mitcham.

That difficulty in retention leads to an even greater labor shortage for mid- and high-skill jobs, as employers often prefer to hire employees from within who already have been trained and are familiar with the company, Mitcham says.

“They’re willing to hire individuals who show strong soft skills,” she says. “We need more soft skills. Employees are not understanding that they have to show up to work on time, they have to show up regularly. They’re not understanding a chain of command.”

Barriers to work

High job vacancies aren’t the result of people not wanting to work or being lazy, says Staton, of United Way.

The region spans roughly 7,000 square miles, so people must often commute significant distances to find good-paying work, making reliable and affordable transportation a vital but somewhat lacking resource for local workers, Staton says.

Another area where Southwest Virginia is well behind the rest of the state is child care. Statewide, Virginia is about 12% short of needed child care slots, according to a 2019 study from the Bipartisan Policy Center, while Southwest Virginia has almost a 30% gap, meaning more than 7,000 children in the region don’t have child care or rely on a parent who stays at home.

“When you think about a lot of people sitting on the sidelines, if you don’t have child care … especially [for] young professionals and young families, there’s typically somebody sitting at the house not in the labor force and the other person is going to work,” Staton says.

Many parents feel they are dedicating so much of their paycheck to child care that it’s more valuable to stay with their child and ensure quality care, he adds. The average annual cost of child care for an infant in Virginia is more than $14,000, making Virginia the ninth most expensive state for child care in the country, according to a June report from the Economic Policy Institute.

That means child care costs for Southwest Virginians with a single child could be a third of their annual income, which averages $45,340 for the region, per the Bureau of Labor Statistics.

In a survey of 150 businesses, United Way of Southwest Virginia found more than half of those employers said the need for child care was impacting their ability to hire and retain talent, says Staton. One of those companies is Abingdon-based K-VA-T Food Stores, operator of the Food City supermarket chain that’s the second largest employer in Southwest Virginia.

“We, along with other employers, have been very frustrated about not being able to get people back into the workforce,” K-VA-T President and CEO Steve Smith says. “Time and time again, child care comes up as a big opportunity.”

Addressing the problem

Food City has experienced worker shortages on the retail and corporate sides of the business, Smith says, which is why the company is partnering with United Way and donating $4 million to help establish United Way’s regional workforce and child care hub under construction in Abingdon. 

Funded through a mix of public and private funds, including federal funding from the American Rescue Plan Act, the planned 87,000-square-foot facility will dedicate about a third of its space to providing child care for about 300 children, ages 5 and under. The rest of the space will be dedicated to serving students from kindergarten through high school, offering educational resources and opportunities for kids to explore career options as they get older, with a goal of reaching 30,000 students per year at full capacity, to Staton. It will include a GO TEC lab with 3D printers and robotics and other technologies for K-12 teachers, as well as a workforce exploration center.

“We like to think we’re working on both sides of the continuum right now,” says Staton. “Historically, [we] have a lot of disconnect and opportunity to bridge the gap between the world of learning, which would be the educational system, to the world of work.”

Adding internships and training programs for students is a popular strategy among employers addressing labor shortages, including CGI, an IT consulting firm with more than 375 employees in Lebanon.

The average CGI worker spends nine years at the company, with turnover rates roughly half the industry standard, according to Luke Layne, director of CGI’s Lebanon onshore delivery center. The company, which came to the region in 2006, has become well known locally, Layne says, for its work with students, including sponsoring a STEM camp for local middle schoolers and participating in a career expo through United Way that puts CGI’s name in front of 4,000 seventh-graders — essentially every student of that age in the region.

Mitcham, too, believes investing in student outreach is key, especially since she says she finds students aren’t aware of or have misconceptions about manufacturing jobs in the region. Manufacturers are increasing internship opportunities and partnering with vocational and higher education schools like Mountain Empire Community College and the University of Virginia’s College at Wise to spread awareness about manufacturing, as well as cultivate highly sought soft skills.

In terms of retaining young people who may be prone to job hopping, it’s a matter of showing them “a roadmap” to advancement and an appealing future with a particular company, Mitcham says.

“A lot of Gen Z are more willing to stay if you provide them with a good work environment,” she says. “The data says that you can wave a dollar at me, but if you don’t provide me with a work environment that I’m going to enjoy or have no opportunities for advancement, I’m going to stay where I’m at.”

Some companies increased hourly pay from around $10 to $16 since the pandemic began, Mitcham says. Layne, at CGI, also believes his company’s salaries have helped attract and retain workers. CGI starts employees about $5,000 higher than the region’s annual salary on average, according to employment website Indeed.

More so than salaries, says Goad, at Earthlink, flexible work schedules and an appealing work environment seem to be top priorities among younger employees, and he is even considering a four-day workweek for some corporate positions.

As EarthLink wraps up construction on a new 30,000-square-foot office in Wise County, employee demands are top of mind for Goad, who is making sure large break rooms and common areas are included in the design.

“If you just go back 10 years ago, nobody was spending extra money to build that into a building that’s supposed to be built to be efficient,” he says. “As an employer, we’re now challenged with how we figure out how to fit into this new paradigm.”  

Southwest Virginia at a glance

Located within a day’s drive of six capital cities, the southwestern tip of Virginia is known for its mountainous natural beauty, as well as a history of coal mining and cultural richness. It includes Bland, Buchanan,Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington and Wythe counties, as well as the cities of Bristol, Galax and Norton. While coal mining and other natural resource extraction have long dominated the region’s economy, other industries have grown up in recent years, including customer support centers. Tourism has also grown in Southwest Virginia, thanks to the region’s rich history of Appalachian music, crafts and outdoor recreation. It is also home to Mountain Empire Community College and the University of Virginia’s College at Wise.

Population

366,695

Top employers

• Walmart 
• Food City
• Lee, Russell, Scott, Tazewell and Wise county school systems
• Foundever (formerly Sitel)
• Paramont Coal Company Virginia

Select hotels

The Sessions Hotel (Bristol)
70 guest rooms, 2,311 square feet of event space

The Bristol Hotel (Bristol)
65 rooms, 3,800 square feet of event space

The Martha Washington Inn & Spa (Abingdon)
63 rooms, 3,200 square feet of event space

The Inn at Wise (Wise)
49 rooms, 5,000 square feet of event space

Western Front Hotel (St. Paul)
30 rooms, 2,000 square feet of indoor and outdoor event space

Nicewonder Farm & Vineyards (Bristol)
28 rooms, 44,000 square feet of indoor event space

Restaurants

Burger Bar (Bristol) American, theoriginalburgerbar.com

Gillie’s Restaurant (Blacksburg) Vegetarian, gilliesrestaurant.com

Draper Mercantile and Trading Company (Draper) American, draperisfordreamers.com

The Tavern (Abingdon) American, abingdontavern.net

Eatz on Moore Street (Bristol) American, eatzonmoorestreet.com

Major attractions

Southwest Virginia is home to a 300-mile music heritage trail known as The Crooked Road, which honors its contribution to gospel, blues and bluegrass, as well as The Birthplace of Country Music Museum in Bristol. The Appalachian Trail also runs through the middle of the region, with a hiker hub and Trail Center in the town of Damascus, which hosts the Appalachian Trail Days Festival with up to 20,000 attendees annually. Grayson Highlands State Park’s wild ponies in Mouth of Wilson and Natural Tunnel State Park’s massive caves in Scott County are some of the natural splendors that attract visitors, as well.