Choosing a location for your business is one of the most critical decisions you'll make as an entrepreneur. Beyond real estate costs and market access, understanding the local workforce is essential for long-term success. The right location provides access to talented employees with the skills, education, and stability your business needs to thrive.
With Social Explorer's demographic analysis software, you can evaluate the local workforce in any area and make location decisions based on reliable data rather than guesswork. This guide explores eight key demographic factors to consider when choosing a location for your business and analyzing the local workforce, using data from the American Community Survey – a Census Bureau poll of 3.5 million U.S. households conducted annually.
Understanding Your Data Sources for Local Workforce Analysis
Before diving into location selection, it's important to understand your data sources. The American Community Survey releases two datasets annually:
- One-Year Sample: Covers areas with populations over 65,000, typically released in September. More timely but limited to larger geographies.
- Five-Year Sample: Includes all geographic areas with five times the sample size, providing greater accuracy and covering counties, cities, zip codes, and neighborhood-level data crucial for local workforce analysis.
While the Census Bureau provides extensive demographic data about the local workforce, it doesn't collect information on religious affiliation or political party membership. The survey does track non-citizen populations, though this remains politically contentious for the decennial Census.
8 Critical Factors for Evaluating the Local Workforce
1. Population Density: Finding Your Local Workforce Base
When choosing a location for your business, understanding where people actually live reveals the size and accessibility of your local workforce. Population density – the number of people per square mile – shows concentrations of potential employees that raw population numbers might miss.
Consider Detroit's Wayne County, Michigan, where density ranges dramatically from 22,683 people per square mile in Census Tract 5523 (central Hamtramck, northeast of Detroit) to just 29 people per square mile in Census Tract 5245 (southeast of Dearborn). This stark contrast directly impacts the available local workforce in each area.
A denser local workforce means:
- Shorter recruiting timelines
- More diverse skill sets available
- Greater competition among job seekers
- Reduced relocation costs for new hires
Social Explorer's visualization tools let you identify these population concentrations at the neighborhood level, helping you pinpoint areas where the local workforce can meet your staffing needs.
2. Labor Force Participation: Understanding Your Local Workforce Availability
Population density tells only part of the story about the local workforce when choosing a location for your business. Labor force participation rates reveal how many people are actually available to work. The Census Bureau defines the labor force as all non-institutionalized individuals over 16, including Armed Forces members.
In Augusta, Maine – the state with the nation's oldest median age – the local workforce participation varies significantly. Census Tract 108.04 (southwest of Augusta) shows 73.7 percent labor force participation, while Census Tract 205 (northeast Kennebec County) registers only 48.8 percent. This 25-point difference could dramatically impact your ability to staff your business from the local workforce.
High labor force participation indicates:
- A robust and available local workforce
- Lower competition for workers among employers
- Healthier local economy
- Stronger consumer base for B2C businesses
When evaluating the local workforce and choosing a location for your business, always check the margin of error in survey data. Five-year samples have smaller margins than one-year surveys, but margins increase for smaller geographies like Census tracts.
3. Housing Affordability: Keeping Your Local Workforce Accessible
Housing affordability directly impacts whether the local workforce can actually afford to live near your business. Even with abundant workers in the surrounding area, unaffordable housing creates a barrier – a reality facing vacation destinations like Jackson Hole, Wyoming, and Aspen, Colorado, where local workforce shortages plague businesses despite regional population growth.
Housing costs vary dramatically nationwide and can fluctuate rapidly. Austin, Texas, saw average home prices jump from $373,000 in 2019 to $590,000 by 2025 as remote workers flooded in during the COVID-19 pandemic. This appreciation priced out much of the local workforce in service industries.
Financial advisors typically recommend limiting housing costs to 30 percent of income. Using the American Community Survey's median gross rent as a percentage of household income reveals where the local workforce can afford to live. In southern Florida, only Miami Lakes and Westview meet this affordability threshold among major population centers.
When choosing a location for your business, cross-reference multiple data sources about the local workforce's housing costs. Coral Gables, Florida, appears affordable in survey data at 30 percent of income for housing, but with average rents of $3,700 (September 2025) and median household income around $130,800, the local workforce struggles to meet the 30 percent guideline.
Areas with affordable housing for the local workforce provide:
- Lower wage pressure from cost-of-living concerns
- Better employee retention
- Easier recruitment from wider geographic areas
- More stable community relationships
4. Commuting Time: Local Workforce Accessibility and Retention
Commuting costs more than time for your local workforce – it consumes paychecks through gas, transit fees, vehicle maintenance, and parking costs. The COVID-19 pandemic highlighted these costs when remote work freed thousands from daily commutes, reshaping major cities as the local workforce relocated to remote destinations.
The American Community Survey tracks commuting patterns by income, race, ethnicity, and gender. In Alabama, where low corporate taxes and employer-friendly policies attract businesses, the local workforce faces average commute times ranging from 20 minutes in Pike County to 36 minutes in Choctaw and Cleburne counties.
When choosing a location for your business, consider how commute patterns affect the local workforce:
- Longer commutes reduce the effective local workforce pool
- Transportation method availability (public transit, highways) expands access
- High commute times increase turnover and absenteeism
- Areas with shorter commutes attract workers from competitors
Social Explorer can map what percentage of the local workforce drives alone, carpools, uses public transit, bikes, walks, or works from home – all factors affecting employee satisfaction and retention.
5. Education Levels: Matching Local Workforce Skills to Business Needs
Understanding the education levels of the local workforce is crucial when choosing a location for your business. While some patterns are predictable – college towns have more educated workforces, high-income areas correlate with higher education – granular data reveals opportunities and challenges in the local workforce.
For businesses needing less-skilled workers (warehouses, fast food, entry-level positions), California and Texas have the highest percentages of adults without high school diplomas in the local workforce. The pattern concentrates in the southwestern and south-central United States, while New England and the Upper Midwest show local workforces with fewer workers without diplomas.
For specialized needs, you can identify concentrations of specific degree holders in the local workforce. California and Texas tie for the highest percentage of engineering bachelor's degree holders (10.06 percent) in their local workforces, with concentrations heaviest in the Southwest and Pacific Northwest.
When choosing a location for your business with specific skill requirements, Social Explorer lets you analyze the local workforce education levels down to county or even neighborhood levels:
- High school completion rates
- Bachelor's degree attainment
- Graduate degree percentages
- Field-specific degrees (engineering, business, healthcare, etc.)
- Vocational training participation
Matching your needs to the local workforce education profile reduces training costs and accelerates productivity.
6. Geographic Mobility: Local Workforce Stability Indicators
Geographic mobility – how many people have moved into or stayed in an area – often gets overlooked when evaluating the local workforce, but it reveals economic vitality and workforce stability critical to choosing a location for your business.
High mobility in the local workforce typically signals a booming economy but may indicate less workforce stability and higher turnover costs. Low mobility often reflects economic stagnation but can mean a more stable, committed local workforce with deeper community ties.
The COVID-19 pandemic triggered massive mobility as remote workers relocated nationwide, reshaping local workforces. In Texas, Dallas-Fort Worth and Houston attracted the most out-of-state movers in absolute numbers, significantly changing the local workforce composition. Austin saw newcomers comprise 3.2 percent of its population—the third-highest percentage in Texas. Temple (5.7 percent) and Wichita Falls (4.6 percent) topped the list, though military bases may have skewed these figures.
When evaluating the local workforce and choosing a location for your business, mobility patterns reveal:
- High in-migration: Growing economy, competitive hiring landscape, need for robust onboarding
- High out-migration: Economic challenges, potential talent drain, possible wage pressure
- Low mobility: Stable local workforce, strong retention potential, established community networks
- Balanced movement: Healthy turnover, fresh talent influx, dynamic economy
7. Language Spoken at Home: Local Workforce Cultural Competency
As America grows more diverse, choosing a location for your business requires understanding the local workforce's cultural makeup, including language preferences. While English dominates most U.S. households, ethnic enclaves create both opportunities and considerations when evaluating the local workforce.
A business targeting Hispanic customers in Phoenix should consider neighborhoods with a Spanish-speaking local workforce. Zip code 85009 in southwest Phoenix has the highest concentration, with nearly 67 percent of residents speaking Spanish at home among areas with over 1,000 people.
Understanding the local workforce's language profile helps when choosing a location for your business by:
- Identifying multilingual talent pools for customer-facing roles
- Recognizing training and communication needs
- Revealing cultural competencies in the local workforce
- Highlighting communities for culturally-focused businesses
Social Explorer tracks multiple languages in the local workforce, helping you identify communities speaking Asian languages, European languages, and more – critical information when choosing a location for your business that serves specific cultural communities or requires multilingual capabilities.
8. Industry Mix: Understanding Local Workforce Experience
When choosing a location for your business, understanding the existing employment landscape reveals the local workforce's experience and skills. The American Community Survey tracks employment across numerous industry categories, showing whether the local workforce has relevant experience for your business needs.
Analyzing the local workforce's industry mix helps you:
- Identify transferable skills in the local workforce
- Understand wage expectations based on similar industries
- Assess competition for the same local workforce talent
- Find complementary businesses for partnerships
- Recognize economic diversification or concentration risks
A manufacturing business might seek a local workforce with industrial experience. A tech startup needs a local workforce with software development skills. A healthcare facility requires a local workforce with medical credentials. Social Explorer's industry employment data reveals these patterns at granular geographic levels.
Making Your Final Decision: Synthesizing Local Workforce Data
Choosing a location for your business requires balancing multiple local workforce factors. No single variable tells the complete story about whether an area can provide the employees you need. Use Social Explorer's customizable visualization tools to:
- Compare the local workforce characteristics of multiple locations side-by-side
- Identify tradeoffs between different demographic factors in the local workforce
- Drill down from state to county to neighborhood level
- Cross-reference data points for comprehensive local workforce analysis
- Map multiple variables simultaneously to find optimal locations
Remember that Census data provides estimates about the local workforce, not absolute figures. Always:
- Consider margins of error, especially for smaller geographies
- Verify local workforce findings with additional sources
- Visit potential locations in person and observe commute patterns
- Talk to local business owners about their local workforce experiences
- Consult chamber of commerce representatives about local workforce availability
- Review local workforce development programs and resources
Questions to Ask When Evaluating the Local Workforce
Before choosing a location for your business, answer these critical questions about the local workforce:
- Size: Is the local workforce large enough to meet current and future staffing needs?
- Availability: What percentage of the local workforce is actively seeking employment?
- Affordability: Can the local workforce afford housing near your business location?
- Accessibility: How easily can the local workforce commute to your location?
- Skills: Does the local workforce possess the education and experience you need?
- Stability: Is the local workforce stable, or characterized by high turnover?
- Diversity: Does the local workforce reflect the cultural competencies you need?
- Competition: How many other employers are competing for the same local workforce?
Conclusion: Data-Driven Decisions About the Local Workforce
Choosing a location for your business no longer requires relying on intuition about the local workforce. With tools like Social Explorer and comprehensive Census data, you can make informed decisions based on population density, labor force participation, housing affordability, commuting patterns, education levels, geographic mobility, language preferences, and local industry composition.
By analyzing these eight demographic factors, you'll understand whether the local workforce can support your business needs – both today and as you grow. The right location doesn't just provide access to a local workforce; it provides access to the right local workforce with appropriate skills, stability, and cultural fit for your business model.
A strong local workforce becomes a competitive advantage. Companies that carefully evaluate the local workforce when choosing a location for their business experience:
- Faster hiring timelines
- Lower recruitment costs
- Better employee retention
- Stronger community relationships
- More sustainable growth
Start your local workforce analysis today with Social Explorer's easy-to-use demographic mapping software and make your next business location decision with confidence. Understanding the local workforce isn't just smart planning – it's the foundation of long-term business success.