THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, April 17, 1995 TAG: 9504150220
SECTION: BUSINESS WEEKLY PAGE: 08 EDITION: FINAL
SOURCE: BUSINESS WEEKLY
LENGTH: Medium: 67 lines
Hampton Roads' legendary number of trailing spouses - those who move here with a military husband or wife - long have been regarded as a vast labor pool that diminishes wage inflation.
There's another element, though, that's often overlooked when discussing modest wage rates. And that's the abundance of college graduates.
When the New York site relocation firm Moran Stahl & Boyer compared 60 U.S. cities in 1993, one important benchmark was four-year college enrollment. On this measure, Hampton Roads ranked solidly mid-range at 33, ahead of traditional economic rivals Charlotte (49), Orlando (51), Jacksonville (57) and Richmond (60),
Cleveland, whose 2.2-million population far exceeds Tidewater's 1.5 million, placed 34, and 2.1-million Tampa was 35.
``One reason we opened here was the big market for DOD contracts and there were a lot of talented people coming out of the military and the colleges,'' said Joe Baldwin, director of Hampton Roads operations for SWL Inc.
When the defense contractor opened shop in Virginia Beach last year with 15 employees, it discovered a pleasant fact. The labor pool, along with low taxes and real estate prices, allowed salaries in Hampton Roads as much as $15,000 below the level for comparable jobs near its Washington operation.
Not everyone, of course, relies on military spouses or the abundance of new college grads. Despite the labor surplus, companies are crafting creative remedies to keep employees from leaving jobs, said Lynn Riggs of Portsmouth, head of the human resources consulting firm Leading Management Resources. Expanded benefits, flexible hours and stronger performance bonuses are becoming more common, Riggs said.
McKendree and Co. Inc. of Norfolk, a distributor of copier machines, has taken a another tack with bonuses. In an effort to attract and retain a strong sales force, it diminished the bonus in favor of base salary, said McKendree's Mike Atkins.
``It used to be, you didn't sell, you didn't eat,'' Atkins said. McKendree replaced the bonus-only structure with a base salary that provides 75 percent of a salesperson's income. Bonuses, which account for the other 25 percent, now are based on the number of units sold as well as sales volume.
What prompted the change to a base salary was a need to attract a competent sales force in a market crowded with as many as 20 copier distributors. ``This is the hardest area I've ever seen to recruit in,'' Atkins said.
For many experienced workers, however, wages can seem skimpy. Moran Stahl ranked Tidewater 13 among the 60 cities on the matter of skilled workers. This far exceeded the rankings of Hampton Roads' traditional rivals and was in league with San Francisco (11), Denver (12), and Washington (14).
Along with the quality of the labor force, Hampton Roads also fared well on the measure of competitive pay, which can be interpreted to reflect the region's lower wage base. Tidewater ranked 22, ahead of traditional rivals with the exception of Charlotte (7).
Riggs suggests the nature of the Tidewater labor scene is changing. With more than 100,000 military personnel in Hampton Roads, the trailing spouse and the recently retired veteran remain strong factors in the region's labor pool.
But the big pool of veterans and trailing spouses is less likely to be cited today as a reason to keep wages down, Riggs said.
``Companies are making the commitment,'' Riggs said. ``They are doing more things to keep key employees.''
KEYWORDS: JOBS COLLEGE GRADUATES by CNB