Talent Attraction and Retention Strategies and Tactics: The Case of the City of Austin, Texas

Created by:

Jeremy Tamanini, Dual Citizen, for Tendensor and the Talent Attraction Management in Nordic Cities and Regions project

Date: Contacts:

12 July 2013 Jeremy Tamanini, Dual Citizen, on e-mail jeremy@dualcitizeninc.com, or Marcus Andersson, Tendensor, on e-mail marcus.andersson@tendensor.se

July 8, 2013 Tendensor AB Sankt Eriksgatan 63 SE-112 34 Stockholm Sweden Re: Talent Attraction Case study of Austin, Texas Dual Citizen LLC is pleased to join Tendensor AB in contributing a case study about Austin, Texas to the broader project about talent attraction to Nordic cities and regions. We are happy to partner with you to begin developing greater knowledge and research on talent attraction and how places can better position themselves to attract the skilled workers who are so necessary for economic growth and place development. We hope that the insights and tactics from this North American case study will enrich the efforts of participating Nordic cities and regions in the future. We look forward to continued collaboration with the Tendensor team on this effort.

Sincerely,

Jeremy Tamanini Founder/Lead Consultant

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

Executive Summary
Austin, Texas is a fitting case study for international places of various sizes and shapes to learn from when devising their own strategies for attracting talent. The capital of the American state of Texas, where four of the top five fastest growing U.S. cities in 2012 are located, Austin offers a rich case study in talent attraction due to its effective mixture of deliberate tactics and less tangible initiatives in this realm. Taken together, Austins approach has clearly worked and today the city is one of the most attractive American destinations for talented workers and businesses large and small. But while Austin today has witnessed a decade of steady economic growth and notable successes in talent attraction to fuel this growth, much of the innovative thinking around economic development and talent attraction came about during less buoyant times. Riding the technology wave of the late 1990s, Austin found itself facing significant employment losses in the early 2000s as the citys high-tech economy was hit particularly hard by the sectors sagging fortunes. It was this downturn, and the need for a coordinated action plan to reverse it, that marks the beginning point for many of the public and private initiatives that can be credited for laying the groundwork for the vibrant, diversified economy in Austin today. This case study will examine the most important talent attraction initiatives associated with public and private actors during this recent period since the early 2000s downturn. In examining the efforts of the past decade through a series of interviews and secondary research, the following initiatives and findings emerged as keys to understanding Austins success: Opportunity Austin, a program launched in 2004 by the Austin Chamber of Commerce and funded mostly by local businesses, set clear goals around job creation, corporate relocation and talent attraction and retention. Driven by the private sector with input from other stakeholders, Opportunity Austin structured efforts to attract talent to targeted sectors and to nurture and retain local talent rising through secondary and university-level educational institutions. South by Southwest (SXSW), started in 1987 as a music festival, today provides a festival portal of entry for outside talents to Austin, Texas. In addition to showcasing the citys vibrant music scene, the more recently founded SXSW Interactive focuses on emerging technology. Attracting creative entrepreneurs from around the United States to Austin, SXSW Interactive is the primary channel through which outside talents learn about the start-up scene in Austin and as a result, is one of the most important tactics for talent attraction and city branding more broadly. Public and private actors in Austin assume disciplined, focused roles with regards to talent attraction. The public city government prioritizes quality of life issues, which in turn reinforce the citys appeal to outside talents by creating a clean, natural, safe city to live in. Private actors tasked with attracting talents to firms tend to focus on immediate hiring needs while transmitting these openings and other data to city stakeholders, often through organizing bodies like the Chamber of Commerce or other more targeted business councils. Intangible factors play a large role in Austins success over the past decade. There is a strong sense of identity in Austin and a near unanimous belief that Austins creative, inclusive, technology-driven ethos is a key factors in defining the city and its appeal to outsiders. When asked what advice they would give to other cities attempting to emulate their success, every interviewee emphasized the importance of being authentic and embedding the most valuable qualities of place into broader talent attraction strategy.

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

Description of Austin, Texas

Austin is the fourth largest city in Texas with a city population of around 850,000. Austin is the cultural and economic center of the five county Austin Round Rock San Marcos metropolitan area with its population of approximately 1,800,000. In 2012, Forbes Magazine ranked the Austin metropolitan area #1 for jobs in the United States, noting its 2.2% annual growth in jobs driven by manufacturing, technologyrelated employment and business services1. Beyond these statistics, Austin is known for being politically quite liberal in the otherwise reliably conservative state of Texas. One of the most memorable tourist memorabilia in Austin is t-shirts and other clothing items with the phrase Keep Austin Weird. Indeed, many Texans probably think Austin is quite weird with its independent music scene, no-smoking ordinances, and strong Democratic affiliation. Echoing this sentiment, conservatives in the Texas legislature have been known to refer to Austin as the Peoples Republic of Austin. Sarcasm aside, Austin exhibits certain characteristics that are not easily duplicated in other places and clearly influence its ability to attract and retain talent. Many of these factors are directly responsible for the robust economic growth rates of the past decade:
The University of Texas (UT) in Austin has the fifth largest single-campus enrollment in the entire

United States with 50,000 undergraduate and graduate students. UT is a major center for academic research, receiving over $600 million in research grants in 2010 and remaining actively linked to local companies through its Austin Technology Incubator, which supported 32 companies in 20102. The university plays a pivotal role in grooming talent for future roles in Austins job market.
As the capital city, Austin is the head of state government and the jobs, contracts and other

economic activity associated with it. Furthermore, the Texas state government has its own initiatives for attracting businesses and talent to the state, meaning that Austin is the beneficiary of city-level and state-level efforts to bolster growth. Austin is a high-tech hot spot in the United States and has been for decades. The highly educated graduates from UT coupled with a strong creative class in Austin fuels an unusually vital business environment for a city of its size. Furthermore, Austin is close to Texass other main cities, providing increased access to human and financial capital from Dallas Fort Worth, Houston and San Antonio as compared to other more geographically isolated cities of its size. Despite being a large American city, Austin is known for having limited barriers to leadership, translating into strong civic engagement and more access to leadership positions on initiatives related to talent attraction and economic development. This higher than average level of civic engagement can prove critical to initiatives with limited financing, requiring large volumes of volunteers.

Forbes Magazine referred to data from the U.S. Bureau of Labor Statistics in calculating these rankings. For more details on their methodology and the other Texan cities at the top of the rankings, please visit: http://www.forbes.com/sites/joelkotkin/2012/05/01/methodology-for-best-cities-for-jobs-list/ 2 These statistics taken from President William Powers Jr.s State of the University address on 9/15/10. His full remarks can be accessed here: http://www.utexas.edu/news/2010/09/15/powers_2010address/

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

Opportunity Austin
Facing three consecutive years of job losses in the early 2000s, Opportunity Austin (OA) was established by the local chapter of the Chamber of Commerce. OA was a five-year economic development initiative aimed at creating jobs in the Austin area. Its goal was to create 72,000 new jobs and increase payrolls by $2.9 billion. OA received financial support from local businesses of around $14.4 million to execute their strategy. The early years of OA were focused on getting back in the game after several years of decline, assuring businesses that the longer-term prospects for Austin were reliable and providing a platform for public and private stakeholders in Austin to better articulate a longer-term economic development plan for the city. After these first few years of Opportunity Austin and signs of a stabilizing economy, the OA leadership commissioned a strategic blueprint for OA II, a second, more advanced phase of Opportunity Austin with a clearer focus on talent attraction and retention3. The recommended strategy including the economy, talent, and community offered a wide range of tactics for both talent attraction and retention, including these highlighted areas:

Hosting Austin-themed out-of-market events to advertise the advantages of relocating to greater Austin. Selecting markets with qualified talent is critical to making these efforts cost-effective; Partnering with local universities to leverage their alumni rosters for recruitment of top talent back to the Austin region as these talents likely have family or social ties to Austin that may serve as further incentive for relocation; Establishing one cohesive organization to serve the networking needs of Greater Austins diverse young talent base so that informal networking is organized, tracked and optimized under one organizational umbrella and talents outside of Austin have an easy way to connect with young colleagues in the city; Continuing efforts to close public school achievement gaps and integrate courses into K-12 curricula that support the Greater Austin Chambers target industries. By more directly linking hiring needs with educational curriculum, chances that talents will remain in Austin increase; Maintain the Greater Austin Chambers commitment to increasing the percentage of collegebound seniors in the Austin region and ensuring that internship programs and career-services offices at regional colleges and universities take advantage of all Austin-area businesses. Building the capacity to provide granular detail on regional workforce needs through data collection methods and sharing.

These tactics clearly fall into two categories of talent attraction and talent retention. In addition, local talent development is an integral part of ensuring a skilled workforce. Unlike some places, Austin has the distinct benefit of hosting a large state university with a wide range of talents available for corporate recruitment upon graduation. Thus, a clear orientation for Opportunity Austin has actually been an inward one, whereby resources have been allocated to better prepare the local talent base for the opportunities available in the marketplace upon graduation. This means not only tactics like internships to connect university students with future employers, but also working at a younger level, increasing graduation rates and embedding specific skills training in curriculum that will ultimately match better to employer needs. The 20,010 by 2010 initiative became a guiding program within the Chamber of Commerce with a focus on increasing graduation rates in Austins secondary schools. The Chamber partnered with three local
3 The talent attraction and retention highlighted tactics here taken from Market Street Services Inc. report Opportunity Austin II: Taking it to the Next Level Strategy, October 15, 2007. The full report can be access at the following link, with Talent Development, Recruitment and Retention chapter on pages 33-53: http://www.austinchamber.com/the-chamber/opportunityaustin/files/OA2.0_Strategy.pdf

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

school districts, six higher education institutions and twelve community organizations and companies to found the program. Put simply, the goal was to boost local higher education enrollment by 30% over 48 months, or increase enrollment by 20,010 students. A core element of this program was Financial Aid Saturdays where volunteers assisted families in filing the Free Application for Federal Student Aid application. After meeting this goal in 2010, the Chamber set a new goal of increasing the share of the regions high school graduates who enroll in college directly after graduation from 62% to 70%. This inward investment in local human capital of younger ages is evident in the most recent Annual Report from Opportunity Austin, which shows that in fact Education is the highest expenditure, followed by Economic Diversification and Business Retention & Expansion4.

This budget allocation from Opportunity Austins 2012 Annual Report details the importance of Education expenditure to the overall strategy of increasing graduation rates and university attendance. Economic diversification is also prioritized in order to insulate the Austin economy from future shocks from reliance on one industry for a large share of employment. OA conducts surveys and gathers other forms of intelligence about business needs as part of its Business & Expansion budget, providing direction to public actors about the incentives required to attract businesses to the city.

Further tactics for talent attraction & retention

Beyond Opportunity Austin, interviewees for this study made frequent mention of other initiatives and tactics that contributed to Austins successes in the realms of talent attraction & retention. Three highlights from these discussions include: Austin Technology Council The Austin Technology Council5 (ATC) is the premier trade association for companies working in and around technology and life sciences, offering events, educational forums and business conferences that bring together other talents in these industries for information sharing and networking. With over 200 member organizations representing 20,000 industry professionals, the ATC offers a variety of marketing opportunities for companies to attract talent and facilitate growth. The ATC also develops tools like the ATC Gateway App linking outsiders with local events, venues, businesses and networking opportunities. Recently, the ATC convened a talent task force to address the lack of skilled workers available to certain technology sectors. Austin Technology Incubator The Austin Technology Incubator6 (ATI) is a program of the IC2 Institute of the University of Texas at Austin and has a dual mission to promote economic development through entrepreneurial wealth and job
4 For the full 2012 OA Annual Report, please visit: http://www.austinchamber.com/the-chamber/opportunityaustin/files/ChamberReport_2012-FINAL2.pdf and for a sample business survey designed to assess key factors contributing to business relocation, please visit: http://www.austinchamber.com/the-chamber/opportunity-austin/files/Benchmark-Study-2011.pdf 5 http://austintechnologycouncil.org/ 6 http://ati.utexas.edu/ Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

creation, and provide a teaching laboratory in applied entrepreneurship for UT-Austin students. Admission to the ATI is extremely selective, with only 5-10 companies being added annually out of hundreds of applicants. While geared towards professionals starting their own companies, the ATI serves as a connector between these entrepreneurs and students at UT with complementary skills, forging longer term working relationships in some cases thereby functioning as talent retention tactics. Austin TechSource Operated by the Chamber of Commerce, Austin TechSource7 is an online portal designed to match job seekers with available jobs in the technology sector. In addition, TechSource emphasizes skills training and relocation services offered by members of the Chamber of Commerce. It is important to note here that not all Chamber members are necessarily companies looking to recruit workers. In addition, organizations that provide jobs training and support services as talents relocate to Austin can be important targets to include in jobs portals like this one.

SXSW as talent portal & branding Austin

The annual SXSW festival in Austin is the most significant tool for talent attraction to the Austin region and overall branding of the city. Held over two weeks during March, the festival brings music, film and interactive professionals together for concerts, trade shows, conferences and other networking events. SXSW is the most profitable event for the City of Austins hospitality industry and in 2012 there were a total of 147,000 total conference and festival participants setting a new record8. In recapping the 2012 event, the SXSW team recounts: SXSW 2012 maintained the events remarkable reputation, offering an unparalleled convergence of the music, film and interactive industries. For 14 days each year, Austin becomes a global incubator where creative professionals can learn from both emerging leaders and established legends. While the international crossroads of ideas is the core value proposition of SXSW, the diverse conferences and festivals also provide Austin residents with a unique opportunity to join out-of-towners in an extraordinary display of creativity and entertainment. From a talent attraction perspective, SXSW is important to understand for two main reasons. The first is that many Americans have a stronger connection to SXSW than they do to Austin, and often travel to Austin more for the festival than out of an interest to visit the city. Thus, SXSW serves an important role in introducing the spirit of Austin to outsiders, often revealing an unexpected appeal to visitors from larger U.S. cities. As engaged social media users, attendees post about the event through social platforms like Facebook and Twitter, further exposing the event and Austins venues and emerging businesses to outsiders in their social networks. These same attendees return to their hometowns with their experiences from Austin, operating as real-time human publicity for the city and its associated job opportunities. The second is that unlike during its early years where SXSW was primarily a music festival, the fastest growing part of the event today is SXSW Interactive, focused on technology start-ups and fostering new ideas, technologies and businesses in the digital space. The Interactive portion of the event contains both formal and informal elements, including panels, company presentations and parties in addition to the more formal SXSW Interactive Accelerator, a newer start-up competition with a lengthy application process. A committee of judges selects the most promising start-ups from these applications, and the distinction provides selected companies significant publicity to SXSW attendees and greater chances for subsequent financing9. While lacking an actual talent recruitment portal like Austin TechSource, SXSW operates as a
7 8

https://talent.austintechsource.com/

The SXSW official recap of the 2012 event estimates approximately $125 million direct economic impact to the city of Austin. For more detail, please visit: http://sxsw.com/sites/default/files/attachments/2012%20SXSW%20Economic%20Impact%20Analysis%20%20FINAL.pdf 9 Although it formally launched in the months before its 2007 appearance at SXSW, Twitter gained significant traction at SXSW by posting a visualization of the nascent service on flat-screens throughout the conference hall. Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

more loosely organized talent attraction mechanism through the myriad connections it forges between local start-ups and external talents. In operating on two distinct levels one more abstract in branding Austin to outsiders and the other more concrete in fostering technology sector connections through Interactive SXSW organizers have made efforts to formalize aspects of the event to better facilitate talent attraction. For example, bigger companies have a variety of opportunities to participate beyond basic sponsorship fees, including strategic suites showcasing new products or innovations, host parties and inclusion in panels and other more formal interactions with select attendees. Dell Computer, based in Austin, actively participates in SXSW, both as a platform for presenting how its customers are using Dell technologies to create music, film and momentum for growing businesses. Their 2013 schedule highlights the more creative opportunities for companies like Dell to engage with the SXSW audience, as the company hosts panels, provides its own technology in forums to show how Dell products can be used in new, innovative ways, and other knowledge sharing activities featuring Dell employees, often individuals or teams associated with more entrepreneurial activities within the firm10. While certainly less formal environments, these events can serve as targeted venues for talent attraction, empowering a large company like Dell to reach qualified, passionate talents with demonstrated interests in their products and services.

Over 60 entrepreneurs attended a pre-South by Southwest event called the Entrepreneurs Unconference. The gathering of global entrepreneurs, hosted by Dell, was an unformatted event where participants created the agenda, made panels on issues that affect their business, and shared best practices with their peers.

Public & private actors

While the business-financed Austin Chamber of Commerce and its Opportunity Austin initiative assumed responsibility during the 2000s for the strategic direction of talent attraction and retention efforts, the Austin city government and private companies there play important roles as well. What is striking about this relationship, however, is the clear division of responsibilities between public agencies, private companies and umbrella initiatives like Opportunity Austin. Interviewees for this study and other literature revealed clear boundaries between public and private responsibilities and indications that their own efforts tended to complement, rather than compete with, other initiatives related to talent attraction and retention. The clear mandate for Austins city government is responsibility for optimizing Austins quality of life and simply making Austin a great place to live. Focusing on city planning, traffic management, green spaces and public parks, and ensuring that Austin remains an inclusive city are high priorities for the city government. When thinking about the three Ts of economic development technology, talent and tolerance Austins city leaders have not forgotten the value placed by skilled workers on living in an inclusive, tolerant community. Richard Florida, the author of The Rise of the Creative Class summarizes his experience visiting Austin:
10 For a full list of Dells events at the 2013 SXSW Interactive, please visit: http://en.community.dell.com/dellblogs/direct2dell/b/direct2dell/archive/2013/03/05/dell-sxsw-2013-dellsxsw.aspx

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

The Austin story would not be complete without the third T, tolerance. Ask the average person the following question: what is the first thing that comes to your mind when you hear about Austin? Most people dont answer Dell, Trilogy, or any other high-tech company. Most of them mention Austin City Limits, the live music broadcast on public TV, or perhaps the South-by-Southwest Festival. Alongside efforts to develop technology and tolerance, the region has made considerable investments in its lifestyle and music scene right down to the clubs and bars of Sixth Street11. Despite the public agency focus on quality of life issues, the recent founding of a city-financed initiative Imagine Austin outlines future workforce related focus areas for agencies of the city government12. The eight identified priority programs (with participating city departments in parentheses) include:

Investing in a compact and connected Austin with improved transportation infrastructure (public works, economic growth & redevelopment, capital planning, transportation, watershed protection); Sustainably managing water resources (water utilities, watershed protection, planning & development review); Investing in the workforce, education systems, entrepreneurs and local businesses with focus on increased job opportunities for Austin residents (economic growth & redevelopment services, parks & recreation, public library, human resources, health & human services); Using green infrastructure to protect environmentally sensitive areas of the city region (multiple departments); Investing in Austins creative economy by encouraging and supporting live music, festivals, films and digital media (economic growth & redevelopment, planning & development, parks & recreation, public library); Maintaining household affordability with focus on transportation (neighborhood housing & community development, code compliance, economic growth & development, health & human services); Promoting health in Austin by increasing access to community and health services (health & human services, planning & development, parks & recreation); Revising Austins development regulations including a review of the Land Development Code (multiple departments).

Private actors are the boots on the ground for talent attraction and retention, serving as the closest link to firms and specific hiring needs. In many larger Austin-based firms, the traditional title of human resources is now more specifically defined as talent attraction, indicating the increasingly specialized skill set required to staff growing companies in the technology space where local talent may not yet have the skills required for job opportunities. Company-level talent attraction strategies vary and are often difficult to discern for studies of this kind given the competitive battle for talents and the desire to keep internal strategies and successful working models confidential. That being said, private actors play an active role in many of the initiatives described in this study and interviewees repeatedly emphasized the power of individuals to influence and guide talent attraction initiatives for city development. Gary Farmer, a local businessman and owner of Heritage Title & Exchange, is one of the most important leaders for Opportunity Austin and raised over $55 million for community endeavors. Laura Kilcrease is managing director of Triton Ventures and founder of the UT Austin Technology Incubator (ATI). Her career illustrates the value of leaders from the Austin business community in providing input and direction to economic development and talent attraction initiatives.

11

Quote taken from Richard Floridas The Rise of the Creative Class page 340. For more information about this publication, please visit: http://www.amazon.com/The-Rise-Creative-Class-Revisited-Edition-Revised/dp/0465029930 12 For more information about Imagine Austin please visit: http://www.austintexas.gov/department/imagine-austin

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

Applying Austins lessons to other places

The case of Austin, Texas reveals the importance of both concrete tactics for talent attraction and more intangible ones. It suggests one model for dividing responsibilities between public, private and civic stakeholders. And it proposes these findings in the context of a unique city with a large student population, greater than normal public resources and a history of civic engagement and entrepreneurship. In learning from the Austin experience, it is important to view these factors as guidelines that can be customized to the Nordic context and restructured to suit the specific development needs and underlying strengths of a place. The research for this case study repeatedly revealed the recommendation to be authentic when positioning a place to outside talents. This advice is not only about creating programs and a narrative that matches the actual character of a place. It also implies the importance of highlighting human, lifestyle elements within talent attraction programs. When making life decisions about jobs, housing, neighborhoods and possible schools and communities for their young children, skilled workers want to be part of a place with character and compatible values. Programs to attract talent must think about how to best convey the character of their community to outsiders, while at the same time articulating more tangible place attributes related to quality of life. This case study was greatly enriched by the participation of interviewees from a diverse range of organizations, agencies and companies located in Austin, Texas. We would like to extend our appreciation to the following individuals for their participation in the project: Bryan Chaney Founder, Event Director at Career Connects Former Global Social Media Manager at AON http://www.careerconnects.org Natalie Betts Economic Development Specialist at City of Austin http://www.linkedin.com/pub/natalie-betts/31/968/b22 Hugh Forrest Director of South by Southwest Interactive Festival http://www.linkedin.com/pub/hugh-forrest/4/250/863 Amy Holloway President of Avalanche Consulting http://avalancheconsulting.com/who-we-are/bios/ Drew Scheberle Senior Vice President Talent & Workforce Development at the Austin Chamber of Commerce http://www.linkedin.com/pub/drew-scheberle/6/691/575 Kwee Lan Teo Yam Vice President Talent Development & Acquisition at the Austin Chamber of Commerce http://www.linkedin.com/in/kweelanteoyam

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

About the project Talent Attraction Management in Nordic Cities and Region
This case study is part of the project Talent Attraction Management in Nordic Cities and Regions (TAM), which is a partnership-based development and benchmarking project. The project consists of a consortium of 17 Nordic cities and regions that take active part in and finance the project. The goal is to provide these cities and regions with strategies and tools for an organised, innovative talent attraction and retention. The project aims to illustrate how public and private actors can build a successful collaboration for talent attraction management. Within the frame of the project, nine case studies of successful examples of talent attraction and retention in the Nordic countries, Europe, North America and Singapore will be carried out, forming the basis for a toolkit for Talent Attraction Management that will be developed in the project. Consulting firm Tendensor implements the project between March and December 2013, in collaboration with consulting firm Place Consulting. Read more about the project and its activities and project partners here: http://www.tendensor.com/p1813/

Dual Citizen LLC | Washington - New York | www.dualcitizeninc.com

10