Chicago businesses need a combination of “attract, train and retain” to meet the region’s future employment needs.
Mar. 18, 2022
Chicago businesses will need a combination of “attract, train and retain” to meet the region’s future employment needs, based on what commercial real estate trends tell us. Looking at our own commercial real estate portfolio for the Chicago region, we see:
The region’s position as a transportation hub preserves manufacturing as an industry and drives continued growth in warehouse and distribution facilities.
Growth is coming in industries that require a more educated workforce, with more reliance on automation and fewer online workers. Yet we have growing unmet needs for skilled trade laborers.
Technology and life sciences will continue to emerge as growth industries in the region.
E-commerce trends have and will continue to influence our commercial real estate landscape and the jobs that are created. The region’s position as a transportation hub continues to support the flow of goods across the country. Though online sales represent less than 15% of U.S. retail sales having retreated to pre-pandemic levels, omnichannel retailers need fulfillment centers, and development of warehouse and last-mile facilities continues to expand. Not surprisingly, most of this expansion is in the suburbs, where there is enough land at lower prices to support these massive facilities. Another option for warehouses is communities open to repurposing land, such as Bensenville, where 100 residential homes were demolished to make way for 4 industrial buildings. Urban developments are also in the mix, with more creativity in design required to accommodate smaller land parcels. While all of this growth does bring jobs, Illinois manufacturing jobs dropped from 850,000 in 2000 to 559,000 in 2010, a level that has essentially plateaued ever since, according to The Bureau of Labor Statistics.
Clearly, more and more of the newer warehouse and distribution facilities are relying on automation and robotics, in part because the competition for warehouse and fulfillment labor has been fierce. Locally, look no further than the Elk Grove Technology Park, which CIBC financed for developer Brennan Investment Group. The former Busse Farm is now a three-building complex occupied by tenants that are smart manufacturers and data centers, including household names like Microsoft. While these facilities may not need as many employees as the assembly lines of old, they do need skilled operators.
Turning to the life sciences sector, this industry has been growing at a rapid pace for years, though the Chicago region currently sits just outside the top 10 life science markets in the United States. Boston, San Francisco and San Diego lead the way, but we expect that to change. With leading institutions such as the University of Chicago, Northwestern University and Rush University, we certainly have the talent to support research and development, and anticipate Chicago’s position as a tech and life sciences hub will take on a more meaningful presence.
Yet for all this development activity to continue, we need to attract, train and retain trade workers: plumbers, electricians, carpenters and steel workers. The commercial real estate industry estimates it needs 61,000 new workers per month over the next 2 to 3 years. Apprentices are entering the workforce at a much slower pace than baby boomers are aging out of it. It is imperative that we focus on training in fields where there is a deep shortage of workers, and we need to ensure these jobs have the pay and benefits to make them just as attractive as those that don’t require a college degree.
Like many of the challenges facing Chicago today, there isn’t one simple solution. Yet ensuring we attract and retain the highly educated workforce to support emerging industries while training a new generation of skilled trades workers is critical to our vitality.