By Rachell Smith
For the second year in a row, I wanted to share the important information I learned as I recently attended the 2018-2019 Central Coast Economic Forecast. Just like last year, business leaders in the community gathered at the Madonna Expo Center to hear from Robert Kleinhenz, Ph.D., Economist/Executive Director of Research at Beacon Economics, and Chris Thornberg, Founding Partner at Beacon Economics, whose data was the focus of the event.
Overall, Kleinhenz expects to see a slower growth rate of jobs and the overall economy in SLO, yet our community will continue to experience full employment and low inflation. The overall economic forecast is moderate growth due to income, job gains, tax cuts, deficit spending — all of which will affect business and personal spending.
2018-2019 Economic Forecast of SLO County
According to Beacon Economics research, California as a whole is experiencing growth. The sectors experiencing gains in job growth, at a rate of 3.9%, are:
- Wholesale (7%)
- Manufacturing (4%)
- Real Estate (5%)
While job losses are seen in the following sectors:
The reason why jobs are analyzed so closely is because they give a solid monthly forecast to economists to determine how the overall economy in SLO County is doing.
Average wages in SLO County have increased by 6.7%, with the highest financial activities in technology, government, and construction. The average yearly salary is $48,000, which is lower than the state average in all sectors. Of note, businesses are struggling to fill open positions; not for a lack of qualified candidates in general, but there simply aren’t enough people engaging in a job search to fill these positions. However, new businesses are starting up at a rate of 3%, which has steadily increased year-over-year since 2013.
SLO County has struggled to provide ample affordable housing opportunities for its residents; this should come as no surprise to those looking to purchase property. Beacon Economics suggests that the high housing costs local workforce members face is yet another challenge to SLO County’s overall economic situation. Researchers believe that the local trend of high housing costs may not be relieved any time soon, mainly due to minimal new construction developments.
The overall conclusion from Beacon’s report is that the way to improve the local economy is by offering affordable housing and higher wages. As payroll and taxable sales rise and tourism and health care lead the charge of bolstering the economy, wages and housing options must be tackled to ensure stability in SLO County.
Culture is Paramount to Success
Aside from the economic outlook from Beacon Economics, Doug Lipp, former Head of Training at Disney University, spoke about the importance of creating a welcoming and creative company culture. According to Lipp, culture is something owners can control to ensure retention and engagement of employees. By investing in creating a culture, employees will see this as an investment in themselves.
At Collaboration, we wholeheartedly agree with Lipp’s assessment of the importance of culture. Through our client engagements, we determined that culture is not just about what a company gives to its employees, or even the general atmosphere of the workplace — although both are a big part of a company’s culture. We educate our clients on the fact that culture must encompass every aspect of work life. This includes leadership training, onboarding for new employees, learning how to effectively communicate, and creating a sense of trust between the leadership and their teams.
Culture builds a foundation of operational excellence, and it can also be defined as what your team is doing every day without being told. According to Lipp, one of the worst things owners can do is leave employees on their own without providing any guidance. For example, Disney specifically trained their employees on living their core values of safety, courtesy, show, and capacity. They trusted that each employee would carry on these values in their day-to-day work. He states that:
Trust + Training = Engagement & Empowerment
There is no magic wand to create a solid company culture; instead, it’s about doing ordinary things extraordinarily well. Lipp mentioned that leaders should pay special attention during regular staff meetings to gauge the effectiveness of organizational culture. Mentoring and coaching employees and enhancing engagement allows employees to feel like a welcomed member of the team, which in turn gives them the confidence to share ideas, work hard, and participate in teamwork.
I walked away from the Central Coast Economic Forecast with a better understanding of where our community is headed economically. I also felt validated that Collaboration’s approach to culture is universal across all industries. For our clients who are struggling with finding the right fit for open positions, enhancing their culture could help attract the best and brightest employees.