St. Louis region sees increase in startups as employers look for more workers
The St. Louis region gained about 78,000 workers between 2012 and 2022 and saw an increase in startups that hired their first workers over the past year, but employers must prepare to replace an aging workforce, according to a report by regional economists and business leaders.
St. Louis Community College Workforce Solutions Group on Wednesday published its annual State of St. Louis Workforce report examining the labor force across the St. Louis region. Researchers used data from about 600 employers with data from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics.
Health care and social assistance employers added about 29,000 workers since 2012, a workforce that now makes up about 16% of the region's total employment.
Businesses in the St. Louis region posted more than 450,000 job openings online last year. Registered nurses were the most sought-after workers in the St. Louis region.
The report notes that one-fourth of the region’s workforce is 55 or older, a 4% increase since 2012. That will pose challenges for businesses, especially as birth rates decline, said Phyllis Ellison, associate vice chancellor for the St. Louis Community College Workforce Solutions Group
“We were expecting more of a carryover of pandemic issues, and what we saw instead was that there was a whole new set of issues for companies to face related to the workforce,” Ellison said. “I think a lot of organizations have been taking a deep breath after the pandemic and maybe not looking that far ahead to recognize there’s another big challenge laying ahead.”
Ellison said employers need to implement tactics to attract younger employees and expose them to various industries and job paths.
“I think we have to start to give our students a better indication of what training and education can get them there,” Ellison said. “It’s not only going to a four-year institution. We need people with four-year degrees, we also need people with other types of training and experience, and oftentimes those opportunities are not presented very clearly to students and frankly to their parents.”
Nearly half of employers who responded to the survey said not having enough workers with the knowledge and skill to complete the designated task was the biggest barrier to hiring more workers. That’s a 12% drop from two years ago in the number of employers who said they didn't have enough workers with knowledge or skill. Employers said lack of transportation, economic conditions and workers' difficulty in finding child care were other large barriers.
But the number of new startups that hired their first workers increased over the past year to 7,780, up 462 since 2021. Those new startups created 15,313 new jobs. Health care and social assistance companies comprised the largest category of startups. Professional, scientific and technical services startups were second, with 4,163 startups created in that same time period.
Researchers say that because most startups in the St. Louis region are not funded by venture capital firms, the jobs they create likely will stay in the community.
The region’s manufacturing sector grew 10% since 2012 with almost 11,000 more workers, making the industry the fourth-largest industry sector. Manufacturing jobs on the Missouri side of the St. Louis region now account for 85% of the region's manufacturing jobs, up from 81% in 2012. The report also notes that 22% of manufacturing employers planned to expand hiring efforts, down from 42%.
The spotlight on manufacturing comes as the region banks on more advanced manufacturing jobs that utilize new technologies in the manufacturing field. The region received a $25 million federal grant to build several advanced manufacturing projects.
Local business leaders say the investment in advanced manufacturing will have ripples across industries, including the API Innovation Center aiming to bring overseas pharmaceutical jobs into the region and manufacturing and construction led by Gateway South Innovation District.
“I think we’ve only just begun to explore what technology can do, and I think one of the exciting things that we see here regionally is what it can do in collaboration across sectors,” Advanced Manufacturing Innovation Center CEO Kory Mathews said. “What can we learn from active pharmaceutical ingredient production that has benefits in aerospace or automotive?”
But researchers say that the aging workforce is a issue that will affect manufacturers and that the region needs long-term solutions to an expected shortage of manufacturing workers as the U.S. working population continues to get older. Ellison said that’s a problem that will need to be solved in the next 20 years.
“We cannot produce the same level of goods and services that we are today, unless we’re changing our business practices or introducing technologies so that we can produce more with fewer people,” Ellison said.