The General Assembly of the Commonwealth of Virginia directed the Virginia Economic Development Partnership Authority (VEDP) to evaluate strategies to attract skilled out-of-state talent to fill maritime jobs in Hampton Roads in support of shipbuilding, ship repair, and offshore wind industries.(*1)

From August through October 2022, VEDP, in partnership with a consultant, conducted research for this charge, which included reviewing literature on domestic migration drivers and trends; identifying and evaluating 44 domestic and international talent attraction incentive programs; conducting an in-depth analysis of 14 of the most relevant programs in North America; and holding 18 interviews with key stakeholders in the Hampton Roads area, including regional and industry associations, workforce development organizations, maritime and offshore wind employers, and skilled trades workers.

Overall, while a targeted domestic worker migration program might have some value for Hampton Roads, evidence from other states and regions shows that these programs result in the recruitment of small numbers of workers and that there may be challenges recruiting skilled trades workers. Given the need for workers in Hampton Roads, no single initiative can fully address the skilled trades talent gap. Therefore, solving this talent gap will require a combination of initiatives targeting recruiting practices, training, wages, benefits, career paths, wraparound services, worker retention, and potential incentives for out-of-state talent attraction.

Several trends driving the current and projected skilled worker talent gap in Hampton Roads emerged from the research:

• Emergence of the offshore wind industry over the coming years due to the Coastal Virginia Offshore Wind Project

• Increasing competitiveness in wages from other sectors and industries, especially retail, hospitality, and trucking

• Decreasing competitiveness of wages., locked-in labor rates for military contracts, and reduced flexibility for hiring policy and practice at larger maritime employers, including citizenship and drug testing requirements

• Decreasing numbers of high school and community college graduates entering the skilled trades

• High attrition in skilled trades jobs like welders, electricians, and machinists

• Declining number of transitioning military personnel in the region

The region is currently making strides to help fill these gaps; one example is the U.S. Economic Development Administration’s (EDA) $11 million award in 2022 to the Hampton Roads Workforce Council to build a regional talent pipeline focused on the blue economy, clean energy, and related cybersecurity.(*2)

The literature makes it clear that domestic migration and promotion of domestic migration to attract workers is both complicated and challenging. Some themes from our literature review are noted below:

• Research shows that education level impacts migration likelihood; workers without a college education are less likely to relocate.(*3)

• There is nationwide demand for skilled workers. Scholars have identified this as a shortage driven by retirements of working populations and the movement toward degree attainment in recent decades rather than career and technical pathways.(*4)

• Competition for workers is strong. Employers across the country are increasing wages for both skilled and unskilled work in areas like retail and hospitality, which may make it even harder to incentivize migration for skilled labor.

• Housing, familial connections, and other factors play a key role in decisions about domestic migration.(*5)

In addition to these challenges, our volume of knowledge about the success of current domestic migration initiatives is scant. The reviewed incentive programs had limited data available to indicate the number of workers they had attracted, the length of those workers’ tenure in both the jobs they were recruited for, and the state to which they moved. Those that had data showed success recruiting small numbers of on-site workers (typically around 50 and no more than 100). Thus, although it appears that promoting domestic migration could be a valuable solution for a small set of workers, it is unlikely to make a meaningful dent in the more significant problem underlying this study: the dwindling skilled trades workforce in the shipbuilding, ship repair, and offshore wind industries.

However, if policy makers are interested in moving forward with an out-of-state talent attraction incentive program, the literature review and case studies contained in this brief highlight program-design insights to consider.

• Strong financial incentives improve the cost-benefit analysis around domestic migration, making them a valuable tool to drive relocation.(*6) However, domestic migration also involves high nonmonetary costs. It is therefore critical to couple financial incentives with support and services that improve information access and reduce friction and costs of relocation.

• Most initiatives were accompanied by extensive marketing campaigns to drive publicity and favorably showcase the city or region, highlighting lower costs and benefits of relocation.

• Family ties and social networks are key drivers of domestic migration;(*7) benchmarked programs were most successful in relocating workers who already had ties to the region.

• Incentive programs are most effective when regionally developed, structured in a way that drives employer engagement, and administered with incentives spread over time to support retention.

Out-of-state talent attraction incentives could effectively address a small portion of the skilled trades — worker talent gap for the maritime and offshore wind industries in Hampton Roads. The case studies provide relevant lessons and considerations for Hampton Roads. If the region develops a program, designers must consider the type of skilled worker in demand, the dynamics of the regional employers, and the current economic landscape.
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(*1) Virginia General Assembly, Budget Amendments - HB30 (Conference Report): Item 125 #9C. Virginia Legislative Information System, 2022 https://budget.lis.virginia.gov/item/2022/2/HB30/Chapter/1/125/.
(*2) U.S. Economic Development Administration (EDA) Public Affairs Department, Press Release: U.S. Department of Commerce Invests $11 Million to Boost Blue Economy and Clean Energy Workforce Training Program in Hampton Roads Region through American Rescue Plan Good Jobs Challenge, U.S. Economic Development Administration, August 3, 2022 https://eda.gov/news/press-releases/2022/08/03/Hampton-Roads-Workforce-Council.htm; HRWC, 2022).
(*3) John Bound and Harry J. Holzer, “Demand Shifts, Population Adjustments, and Labor Market Outcomes During the 1980s," Journal of Labor Economics 18, no. 1 (January 2000): 20–54, https://doi.org/10.1086/209949; Raven Molloy and Christopher Smith, “U.S. Internal Migration: Recent Patterns and Outstanding Puzzles" (paper presentation, Federal Reserve Bank of Boston conference, Boston, MA, October 4–5, 2019); Ofer Malamud and Abigail Wozniak, “The Impact of College on Migration: Evidence from the Vietnam Generation," Journal of Human Resources 47, no. 4 (2021): 913–50, https://doi.org/10.1353/jhr.2012.0031; Ning Jia, Raven Molloy, Christopher Smith, and Abigail Wozniak, The Economics of Internal Migration: Advances and Policy Questions: Finance and Economics Discussion Series 2022-003, Board of Governors of the Federal Reserve System, 2022 https://doi.org/10.17016/FEDS.2022.003.
(*4) Lisa Soricone, Breaking Ground: A First Look at American High School Skills Trade Education, Jobs for the Future, 2020 https://jfforg-prod-new.s3.amazonaws.com/media/documents/Breaking_Ground_Final_report_08-06-20-Updated.pdf
(*5) Jia et al., Economics.
(*6) Jia et al., Economics.
(*7) Ibid.