Report studies domestic sourcing in area

Onshoring, inshoring, reshoring, domestic sourcing, all buzz words that mean the same thing — jobs coming back to the United States. The topic has gotten significant attention in recent years with companies like General Electric, Ford Motor Co. and toy manufacturer Wham-O bringing jobs back to the United States. There is, though, some debate whether it is a trend or just companies publicizing their moves back to the U.S. and keeping quiet about their moves abroad.

Either way, it’s something most would like to see more of as it means more jobs for U.S. workers. That seems to be the goal of a recent study done by the TechAmerica Foundation about domestic sourcing in Grayson and Fannin counties.

“We had the belief that the United States could compete in overseas markets,” said foundation Senior Vice President Matthew Kazmierczak.

He said the foundation moved from there to surveying site location managers about what factors are most important to companies selecting sites. Kazmierczak said managers identified four. The two largest are the workforce and the overall cost of business.

While wages are often perceived as the reason companies send jobs overseas, Kazmierczak stressed that they are only a part of the total cost of doing business. Other factors that affect it and can be more costly overseas include the cost of transportation back and fourth, redundant systems that might be necessary because of shortcomings in local technology infrastructure or utilities and high training cost due to cultural and language differences and high turnover rates. Turnover rates are traditionally lower in rural parts of the United States.

The other factors that affect business site selection are the local political environment and quality of life factors.

With that information in hand and with the help of the U.S. Department of Agriculture, the foundation began searching for a rural area to apply the information, settling on North Texas and narrowing it down to Grayson and Fannin counties. Grayson, Kazmierczak said, represented a rural area on the edge of metro area that can draw on that labor force, while Fannin was rural in a more classic sense.

The foundation interviewed local companies and compared the market with domestic and overseas markets. The study focused on companies that provide call centers, business process outsourcing and information technology services.

“North Texas is indeed a very attractive and competitive location for domestic sourcing work,” it is stated in the report’s executive summary. “There already exists a cluster of call centers and business process outsourcing centers in Grayson County, and with a low cost of doing business and a decent supply of workers, this region could easily sustain additional outsourcing sites.”

“I think the great value is having an outside entity do an analysis for us and kind of validate a business opportunity for our area,” said Sherman Economic Development Corp. President Scott Connell. “It’s one thing for us as a community to say this is an industry we’d like to have. It’s even greater to have a professional association come in, really do some analysis, and say, ‘Yeah, this is a good place to do business.’”

What could be more challenging, though not impossible, for the area, according to the report, is information technology outsourcing (ITO) centers, which traditionally require a more skilled labor force.

“There’s going to be a very bright future for communities that are prepared for these kinds of companies,” said Denison Development Alliance President Tony Kaai. “Manufacturing is still a critical part of our economy, but the biggest growth is going to be in the service industry. … Our challenge is skilled-labor.”

DDA, partnering with Workforce Solutions Texoma and Grayson College, does have a system in place that could be transplanted to train workers. This year, 10 Denison High School seniors are receiving full scholarships to Grayson College’s one-year, industrial maintenance program — an area of high demand locally. The students will also get a paid internship with one of the partnering industries. The industries and DDA are splitting the cost of the scholarships.

Kaai said the program could be replicated for other needs.

For Sherman and Denison, this 18-month process culminated last week when a group of 10 representatives from global companies and sight selection consultants visited the area to learn about the results of the studies and about the area.

“The end result for us is a very good tool to add to our marketing efforts,” Kaai said.

For the TechAmerica Foundation and the USDA, the process continues as they try to apply what was learned in this market to other similar markets across the country. “There’s nothing like being the poster child for an idea,” Connell said.

Kazmierczak said a big part of continuing that process will be trying to educate the public, business and those in positions like Kaai and Connell about the advantages and challenge of domestic sourcing.

“Some of this is just trying change the culture and mind-set that when they think ‘outsourcing’ they don’t just think ‘offshoring,’” Kazmierczak said.