Employment at corporate headquarters is growing faster than other industries throughout Northeast Ohio reports quarterly Team NEO report.
CLEVELAND, Ohio - Employment in company headquarters and the professional services sector grew 18 percent in the past 15 years in Northeast Ohio, at a time when overall employment in this area declined by 8 percent.
Employees who work at area headquarters and the professional services sector only account for 8 percent of the market, or 137,000 jobs, but that sector is important, showed findings from a Team NEO second-quarter regional economic report that was released today. Team NEO is a regional, private-sector group that markets Northeast Ohio and works to attract new businesses and talent to the region.
One reason the sector is important is that people who work in those sectors tend to be higher educated, which is vital for economic growth, said Jacob Duritsky, vice president of strategy and research at Team NEO.
"Fifty percent of all occupations at headquarters and the professional services sector require a bachelor's degree as opposed to 20 percent of all other jobs across the region," Duritsky said. "They also report higher wages."
With 20 Fortune 1,000 headquarters in Northeast Ohio, Team NEO reports that this area is ranked fourth among the 20 largest metros for having more headquarters based here per capita. Team NEO uses a location quotient that compares the base of our headquarter activity relative to the U.S. as a whole.
"When you are over 1 (in NEO's case 1.6), this signifies that we have about 60 percent more headquarter activity going on in Northeast Ohio than the U.S. average, " he said. "Once you get above 1 you are no longer a population serving industry, but exporting those good and/or services outside of the region."
George Zeller of Cleveland, an economic research analyst, said corporate-headquarter jobs are a very important local industry in Cuyahoga County that continues to grow. And by far, the sector has the largest increase of jobs than any other industry in the area.
"That's a very good thing, but it's also a key contributor to the large recent rise in the inequality of worker income and wages," he said.
"Wages for high-wage workers (in the Management of Companies sector) have soared, even as there was no local growth at all in employment, with a stunning current 0.0 percent job-growth rate in Cuyahoga County," he said. Northeast Ohio as a whole has 81,396 fewer jobs now than it did in 2007, when the recession began.
Duritsky said another benefit of corporate headquarters in a city is that key decisions, such as where to expand or donate to philanthropic causes, are made for the company locally.
"There are certainly philanthropic benefits to having a strong headquarters base," he said. "Headquarters tend to invest in initiatives, organizations and opportunities where they're based, not necessarily in other places."
