Finance sector among hardest hit
Altoona ranks as one of the top American cities which lost jobs in 2017, according to 24/7 Wall St. LLC, a Delaware corporation which runs a financial news and opinion company with content delivered through the internet.
Altoona ranked 12th on the publications list of “25 U.S. Cities Losing the Most Jobs in 2017.” Altoona lost 993 jobs in the last year (a 1.7 percent decrease), the majority of the jobs lost were in the financial activities sector (down 6.3 percent).
Eric Irwin, co-owner of Irwin Financial/Raymond James Financial Services Inc., said the financial industry has been slowly losing jobs due to automation within the financial services industry.
“I don’t work for any of the local banks specifically, but it seems branches have slowly been closing, and tellers are not being replaced. I think much of this is due to on-line and mobile banking capabilities where now mobile deposits and payments are possible and much of your banking can be performed using your personal cell phone. The process has become extremely automated that many individuals no longer require the need of a local branch,” Irwin said.
Irwin also said the low interest rate environment has also made it more difficult for banks to make money. Margins are much lower so for banks it’s much more difficult to generate meaningful profits until interest rates start to rise and the spreads increase.
“Personally, I still travel to my local branch because I enjoy the interaction and convenience of speaking to somebody that I have trusted for the last 20 years,” Irwin said.
Irwin said there have been many consolidations within financial institutions.
“I had lunch with a representative from John Hancock who said they recently cut their wholesaling force from 80 employees nationwide to 70 employees. There has definitely been a consolidation of the number of mutual funds being offered, and ETFs have gained popularity which has caused many institutions to cut jobs. Also, indexed investing often becomes more popular during bull markets as investors may not understand the value of working with a financial advisor and attempt to make investment decisions themselves,” Irwin said.
Meanwhile, J. Martin “Marty” Kooman, certified financial planner and registered principal at Kooman & Associates LLC, Altoona, said his firm has been hiring.
Financial services is a very broad category that includes insurance companies, banks, savings and loans, mortgages companies, investment advisory, etc., Kooman said.
“It’s old news that virtually every local bank was acquired by a much larger bank headquartered out of town. The same is true of a lot of insurance and mortgage companies. In general, as technology advances, many of the more routine local tasks and tasks that Artificial Intelligence can complete have been centralized away from the branch networks. Again, this is nothing new,” Kooman said.
Stephen J. McKnight, president/CEO of Altoona Blair County Development Corp., said retirement is one reason for the loss of jobs.
“In the case of our MSA, much of the decrease is resulting from a massive continued retirement boom. As people retire, businesses find ways to operate or innovate with fewer people contributing to lower overall employment numbers. The financial sector continues to be one of those sectors that continues to do more with fewer yet highly skilled people,” McKnight said.
Local businesses from all sectors need to attract talent from outside the region, McKnight said.
“Our population growth has been slowly decreasing for decades impacting the labor force participation rates. So the demand now is to bring more people in to the labor force from outside. Overall, the people and businesses with whom we are working are optimistic of the markets and future,” McKnight said.
Joe Hurd, president/CEO of the Blair County Chamber of Commerce has a different take on the situation.
“I guess if we’re losing jobs that we don’t have the people to fill anyway — I guess that’s not a problem. It’s self-correcting. In reality, I’m sure there’s an element of truth in both scenarios and it would make sense that fewer people would be required to fill jobs that were lost,” Hurd said.
ABCD Corp. is trying to retain and grow the existing industry base.
“As these retirements continue and businesses expand, we will be competing for top talent from throughout the mid-Atlantic region to fill those positions. We need to be the best we can be and offer great housing, schools and recreational venues. All of that matters,” McKnight said.
“While the mission of our organization is not directly aimed at business recruitment, it’s incumbent upon us to help create and maintain a business community that entices companies to locate here. We do our best to promote growth within existing businesses and we’ve seen that growth in a number of key areas. We work closely with ABCD Corp to assist their recruitment efforts and they reciprocate in helping to move our workforce initiatives forward,” Hurd said.
Finding people is the biggest challenge.
“People create the jobs so attracting and retaining people to smaller communities is not as easy as it is in big cities where people come and go more frequently and in greater numbers. We are a destination — great destination with a great mountain town lifestyle. That appeals to many people so we just need to target them, be inviting, provide the resources, housing and support they need to thrive,” McKnight said.
ABCD Corp. has completely revamped its messaging, strategies and programs to focus on the people.
“Behind every business decision are people, so we need to think about what would make someone want to live here, work here and invest here. Our “First Frontier” brand and social media platform is designed to tell our story — match a community like ours with the person who want to be in a place like this — a place with mountains, four seasons, solid infrastructure,” McKnight said.
Hurd said the chamber’s selling points haven’t changed all that dramatically.
“Our quality of life, our education system and the number of family-owned businesses continue to create a business-friendly environment here. We recognize that our lack of population growth will challenge us as we undertake the goal of maintaining a strong workforce. We’ll play the hand we’re dealt and explore creative ways to use our resources to offset some of the things we can’t control. We’ll be fine,” Hurd said.