- [Narrator] Major support for Carolina Business Review provided by Colonial Life, providing benefits to employees to help them protect their family, their finances, and their futures.

High Point University, the premier life skills university focused on preparing students for the world as it is going to be.

And Sonoco, a global manufacturer of consumer and industrial packaging products and provider of packaging services with more than 300 operations, in 35 countries.

- The inside story, inside baseball, inside edition.

It's always the inside part that we wanna know that doesn't always make it to the public dialogue.

I'm Chris William and welcome again to the most widely watched and longest running program on Carolina business policy and public affairs, seeing each and every week across the Carolina's now for over 30 years, this time we call it our insiders panel and what is going on here at the beginning of the year and what is important to remember and what should we look for?

We will have an inside dialogue about that and we will start now, stay with us.

- [Narrator] Gratefully acknowledging support by Martin Marietta, a leading provider of natural resource based building materials, providing the foundation upon which our communities improve and grow.

BlueCross BlueShield of South Carolina, an independent licensee of the BlueCross and BlueShield association.

Visit us at SouthCarolinaBlues.com.

The Duke Endowment, a private Foundation, enriching communities in the Carolina's through higher education, healthcare, rural churches and children's services.

On this edition of Carolina Business Review.

Christopher Chung, from the Economic Development Partnership of North Carolina, Donald Thompson, of the Diversity Movement, Sepi Saidi, from Sepi Inc, and Andy Brack, of the Charleston City Paper And StateHouse Report.

(upbeat music) - I don't think it's too late and still we can say happy new year.

So happy new year to all of you.

It's nice to see you both.

Sepi, I'm gonna start with you.

So we are past the holidays and now focused on those things that we were focused on before the holidays, the public health crisis COVID, housing costs, jobs, labor shortages, take your pick, Sepi, what is the, if we try to cut through all of the melodrama around some of these more emotional issues, what's the real work that needs to get done beginning now.

- Thank you, Chris.

Happy new year to you as always.

I'm so delighted to be on your program.

So when you, we're talking about the issues that we're dealing currently, that the health crisis and the jobs and education.

One thing that I do have to remember is we have to remember none of these things are really new.

If you think about it through all the decades and history, a growing state, a growing economy, there are always things like that that happens.

Now, it happens that we're, it's the first time dealing with this significant pandemic, which we haven't seen before.

But, you know, I believe that as a leaders, we always need to be thinking about how do we solve our problems?

How do we come together to collaborate through figuring out what to do?

These are the things that nobody really has a specific answer for.

I mean, I would be just saying something.

If I say that I can fold this is the first thing we need to focus on.

I think the best thing we need to focus on is collaboration, to truly try to solve this together to find out what are our top priorities.

North Carolina is an incredible state.

Growing, the economy is just booming.

I think that that's at a positive light we need to focus on and to focus on how can we move that ball forward together to get beyond all of these?

How can we increase our access to broadband?

How can we invest better in infrastructure?

How can we in public education or health healthcare?

So these are the steps we have to take together to get to the next step.

- Don, what do you think?

Gentlemen, Don, what do you think?

- Yeah, I would just expand on that.

I think as leaders and one of the things that, Sepi, described as leaders and that's how do we make an impact?

Let's not contribute to the fear-mongering of using data for our personal needs, right?

And I think that a lot of times people are manipulating the information to create that fear and that anxiety and that clouds people's ability to trust information.

And I think that it's really important for leaders to be a part of the conversation, whether it is the pandemic, whether it is education or growth, but let's just use the pandemic as an example, right?

What should we be doing in this moment versus how bad this moment is?

What should we be doing in this moment relative to racial equity, versus how bad this moment is, and trying to create conversations that push our dialogue forward.

- Chung.

- Chris, I think something really important to keep in mind is that both states have huge pots of extra money this year in South Carolina, the typical general fund budget is about $10 billion.

They've got a surplus, they've got a couple of extras, they've got 2.5 billion in ARPA money.

There is all this aid and health and lawsuit money.

So they've got an extra $5 billion.

The thing that really needs to be done here is to not waste that money, not spend it on shiny new things, but instead go back to the problems that we have persistently had to improve education, to expand healthcare and those kinds of things.

Unfortunately, in an election year, there's gonna be the shiny new balls.

And they're gonna be trying to throw money at stupid things that are out there.

- So, to follow that are, Chris, let's just, and this is my term.

Let's call it as, Andy, just talked about that extra money and a place to start.

Let's call it the COVID shadow budget in North Carolina it's same thing, billions have been added to a surplus already.

So to take that a little bit further, what is this extra money?

And let's just call it one time.

how do we become responsible about policy around this one-time windfall?

- Well, I mean, I think the sheer volume of money that's floating around out there does make that a little bit of a challenging question.

I think, Andy, brings up a good point.

It's easy to be distracted by some of the requests that are coming for how to spend all this extra money.

I think from where we sit in the economic development space, going back to your original question of what do we need to tackle in '22?

I think beyond the points that Sepi, Andy, and Don raised, I think from the economic development standpoint, it's like, how do we get all these people who might be sitting on the sidelines in the labor market, back into the workforce, all of the companies that we deal with every day, they all depend on human capital, but there's a good amount of that human capital that is still unable or reluctant to return to the workforce.

It doesn't matter if it's manufacturing the service industry, professional occupations, we're not seeing a labor force that's truly representative of the number of people who could contribute to the economy.

And that's going to continue to be a drag until we resolve things primarily around the pandemic and getting that as much behind us as science will allow, which at this point, most people are saying, right.

It'll become endemic.

Well, if that's the case, we probably do need to figure out how to move on, but we're still in this very much of a limbo state.

Are we gonna conquer it?

Are we gonna eradicate it?

Well, we just have to live with it.

I don't think any one of us knows.

And until that's resolved at an individual in organizational level, we're gonna still be in this period of uncertainty that we've all been living through for the past couple of years now.

- Sepi, you know, Chris didn't use this term, but this idea around labor and workforce in shortage and, you know, where people are gonna go, and some of them just taking themselves out of the workforce, the idea that we've labeled a great resignation, but it seems a little bit more longer-term.

And so as a leader, as an employer, as somebody that watches these markets here in the region, Sepi, is this just a transitional period?

Is this great resignation going to show up in as bore entrepreneurs, as more small business?

How, where do you think the story goes?

- I think, I would believe it is a great resignation and I don't think it's temporary.

I think it's, long-term, I believe we really don't know the impact of all of the individuals who've left the workforce.

They may show up in other fields.

They may become more entrepreneurs.

I just feel like right now, because we were so much in the middle of it, we can't it out, but we are trying at Sepi, we are trying to get creative.

And what I believe is going to make a big difference for organizations is their culture.

I think this is the time more than ever before that the culture of the company is gonna become much more prominent, more prominent than salaries, more prominent than PTO.

Well, PTO is a part of the culture, but it really is becoming much more important.

And for us, we are trying to enhance that.

We're trying to, for example, I just brought up PTO.

We're really enhancing our maternity paternity adoption.

PTO is in a significant way.

We are really are working on our culture.

And I would say the firms that organizations that get the culture right, are gonna be winners.

And that's going to be the only competitive advantage we can offer in today's environment.

- Don, Andy, how you feel about it?

- I would say, and I have a couple of different thoughts, right?

From the enterprise there's one view.

And I look at kind of the smaller emerging businesses.

The competition is starting to equalize, right?

Because all of the compensation levels are increasing so now all of a sudden the employee has a multitude of choices based on location where they can live, right?

So it's the culture of their surroundings, their family environment and engagement, the price point for what they're willing to do work for.

And that toggle between working for someone else and doing the same skilled labor jobs that they have as a freelancer.

And so now as an employer, you have to be able to pivot the output of your organization with those new toggles that employees have.

That means you can't build an organization with an expectation of everybody being on premise, because you then shrink your recruiting pool.

You can't have a two to three year promotion path because now all of a sudden you have a flight risk for somebody that you invest in and train.

So the employers are gonna have to be more agile and create, and I'll finish with this phrase, a personalized work experience for each of their employees.

And that may seem really daunting if you have a big organization, but it doesn't matter.

You're gonna have to get at a personalized level for your employees and build that career path and planning as a part of management excellence.

- Andy, I wonder how much empowerment that employees feel coming out of COVID in COVID, we're still in COVID, but I wonder how much empowerment and leverage and vision and that we can all think more in these strategic, broad sweeping terms, because there is so much liquidity and because companies have become much more pliable with their employees.

And how long does that last?

- I mean, one of the things I can share with you is I'm trying to hire an editorial employee right now, and I'm having to be very creative.

It's not a 40 hour a week type job.

It might be a 32 hour a week job with some extra time.

I mean, what we're seeing in Charleston, which is very dependent on the tourism industry is that they have been hammered.

They are looking massively for more employees, but they can't pay him two, $3 an hour anymore with tips, we have an advertiser who is essentially asked us to figure out a way to get 500 more people to apply for tourism jobs, in hospitality jobs.

I mean, the people aren't out there, we have a three and a half percent unemployment rate in South Carolina is lower than in a long time.

You, the place that you, what you can do is you can bring people in which is expensive.

You can pay people more, which is smart, or you can go to the people who have taken themselves out of the labor market i.e.

moms taking care of kids, teenagers, or retired people, and you can try to incentivize them to come back in.

And that's what we're seeing people starting to do, but they're having to be extremely creative.

And like, Don, said on a very personal one-on-one basis.

- And I think if I could chime in, I mean, I think that goes to Andy's earlier point about how are we spending all these surplus of dollars at pretty much every unit of government has right now?

I think if there are people who are staying out of the workforce, because of lack of things like childcare or lack of some other social support or workforce support, I mean, that could, that is a very real impediment for people getting back into the workforce.

I mean, even housing, if you don't have housing nearby where the jobs are, and you're asking people to commute an hour for job that may not pay all that much, that's also not a great equation for getting people back into the workforce.

So all of these things, they all tie together inextricably.

- You think we're gonna be asking the same questions at the end of this year?

That we are right now, in other words, are we gonna have more clarity about a lot of these labor issues and these workforce issues that we're asking right now, ringing our heads together any of you?

- I'm not optimistic, not front, right?

I think that unfortunately in a country that has all these points of chaos, we're gonna need more settling time than we ever understood before, right?

When we were having in-depth in different things.

And then the second thing with an election coming, that's gonna further divide us.

So, the point of the organization, the country and organizations coming back together is probably two years off, in my opinion, just because of the narratives that are being built, how would we encourage people to fight against that we have... - Sepi, how do you feel about that?

You think we've got, are you more optimistic?

You feel the same?

- I feel the same unless we could leverage.

I really think we're not leveraging social media enough for the education part of it for there is a generation that's on social media and it's truly is leveraging it for many ways.

But I think there's a generation.

I would say my generation probably is maybe most of us on this call, we really are not utilizing the power of social media the way we should to educate, to recruit, to make changes, I think, unless something significantly we figured out to do differently, we're going to be dealing with this same issue, but also, but I'm just an optimist.

I'm just always a huge optimist.

And I think that because of the amount of knowledge that's circulating around on social media and in TV, newspapers, everywhere, I think we are gonna be in a better place.

We're gonna be in better place, but not necessarily by the end of this year significant change, we're talking about 12 months, 11 months from now, so.

- Let's shift just a little bit Andy, I wanna come to you and, you know, this is gonna be like trying to answer something.

Two issues, tax reform in South Carolina, a couple of issues that are on the state house agenda tax reform, redistricting, try to keep it to a minimum.

And I know it's tough because these are big issues.

Do you think either one of those is going to get done enough to where we move this forward.

- I'm gonna add education reform in there too, and really superficial.

So a tax reform, you're essentially talking about income tax rates and they, the Republican leadership is really pushing that, the Chamber's pushing that, there may be something done this year, but what South Carolina needs is comprehensive tax reform to, you know, deal with sales tax and fees and all that stuff.

They're not gonna do that this year.

There's just not enough time and capacity in terms of a reapportionment what's gonna happen in South Carolina.

And I'm not sure probably North Carolina, is that the plans that have been submitted are very gerrymandered in favor of Republicans who control everything.

There are gonna be court cases against it.

And what's that's gonna do is that's gonna push the primary season probably till June.

And that means the entire legislative season is going to be a very partisan season because everybody's wanting to throw legislator raw meat to their voters, and that's gonna divide us more so that everything's gonna be put off and I think that means that the session's gonna pretty much be a failure.

They're gonna be lucky if all they do is redistricting in these budgets.

What we've got to worry about in South Carolina is the attack on public education that's here because there's yet another round of voucher proposals to use public money for private education.

And that's gonna be a big fight that comes too.

- Yeah, Chris, let me, let me couple, the North Carolina reapportionment redistricting, as we call it a shorthand in the media at least is now going to the highest court in North Carolina, I'm not asking you to be a constitutional expert, of course, Mr. Chung, but... - That's a relief.

- It's gonna be difficult to see that the high court does not follow the precedent of the lower courts.

They may.

So if redistricting does happen in North Carolina, how do you think that?

Do you think that is the, do you think that eclipses the entire year politically, or do you think North Carolina gets by, gets past it?

- Look, Chris, as you know, we thought our organization, we don't get into politics, we're certainly affected by, but in economic development at least we've been really fortunate.

There's been strong bipartisan collaboration, anytime we're talking about what is it take for North Carolina, to compete effectively for the jobs and investments of the future?

I mean, we've seen that with the democratic governor's administration and Republican controlled general assembly for at least the past five years where they've come together, when those opportunities arise and they get things done.

I think it explains why we had a record setting year in North Carolina with respect to job announcements by companies locating or expanding here.

It's that bipartisan commitment to delivering an economy that performs for as many of these 10 and a half million people living in North Carolina as possible.

- DEI, Diversity equity and inclusion has also been a big one.

Don, I know you are at the center of that for a whole lot of reasons, and been interested in that for awhile and following the tragic death of George Floyd and several other, the Keith Lamont Scott, shooting in Charlotte, and several other issues brought to the fore, the issue of equality, race relations, it blew up, but it also brought again to the front of this.

So, DEI, is it becoming a couple of questions around this Don?

Is it becoming standardized?

Is it becoming more broadly accepted as a strategic initiative within an organization?

And is there enough momentum for that you feel like in a year, five and 10, that it's gonna be much more endemic in part of organization?

- Yeah, that's a lot to unpack, but I'll do it briefly.

I think, is it lined with businesses strategy?

I would say yes, because one of the challenges that all businesses are facing is talent recruitment and retention.

And in order to raise your ability to recruit and retain, you've got to broaden the net.

And in order to broaden the net, you've got to have people in leadership in place that can relate, motivate, and lead all different types of individuals.

So that's number one, the second component, does it have momentum to kind of weather that storm and be here five to 10 years from now?

The simple thing I will say is it will transform, it will be called something different three or four years from now, because there are so many positive, negative conversations about DEI 'cause people automatically associate it to race.

It's really about workplace excellence.

And how do you create a culture that everyone has the same opportunity to win at work.

So you'll hear and see the nomenclature change over the years, but the productivity we expect from a broad group of people and that equity we're chasing, I think has a long lead life.

- Sepi, do you get the sense that DEI this is kind of soft mark to say is a good thing from a strategic standpoint, but also that it's not just here to stay, but building real momentum within companies.

- Chris, I think that the DEI it's not, I'm going away from it being popular or fashionable to being the right thing, important thing.

And I would also really emphasize gender equality.

I think that one of the big issues we're dealing with could also help solve their workforce problem is a number of females who have left the workforce during pandemic being unequally impacted because of childcare.

So, couple that with the race issues, that long been a part of our challenges in the society, huge challenges in society.

So I'm very excited to see all the conversation.

I'm very excited to see all the education.

I genuinely believe there is a significant amount of population that just has not been educated around this topic, never thought about it that way.

When I speak about women in workplace and how we need to change the culture from where I started, that I have to adapt to a work place culture that was dominated by men.

And they, you had to hide your pregnancy and hide your being female and hide to a fact that what if you want women a part of an organization, why don't we create a culture that's comfortable that women don't have to adapt that minorities don't have to adapt that it feels comfortable for everybody.

So I am extremely excited about what has happened.

I'm extremely excited about the future.

I think this is going to evolve as part of the education, part of it to become a part of our society and just how we live, that we don't even have to do the education around it because everybody gets it.

- We've got a few minutes left and I wanna pick out a couple of regional specific issues, Andy, not surprising to you living in the low country.

You've watched a lot of growth over the decades and not just Charleston, the grand strand, but of course, across the state and across the region, is Charleston still one of the hottest places for growth in the country, is it become a crisis though?

From a cost to build transportation infrastructure.

And now the port with their supply chain issue, even though they're managing it well, what is going on regionally?

That is going to be a challenge for growth in the next year or so.

- I think at least from the people I'm talking to, the challenge to keeping up with growth is having enough people to do the work that needs to be done.

I was talking to a trucking company yesterday and they just don't have enough drivers.

I mean, there's just, there's a need for human capital more than anything else.

The investment capital is here, the tourists are here.

It's just, we need to be able to have the people in the service sectors to keep up with it.

- Chris, specific now to North Carolina the Triangle.

Research Triangle park recently announced the Foundation recently announced that they have a project coming online called the Spark, and it's a billion plus dollar bio-science park.

As, Andy, just talked about, of course, human capital and workforce issues, is this, I'm not gonna say legitimate, but do you feel like, they will find the traction to eventually see this vision and the in intermediate term?

- Yeah, absolutely, I mean, Spark is, is just the latest real estate play that's capitalizing on what's long been a foundation of this region's economy, which is the life sciences biotechnology sector.

I mean, starting with the three world-class research universities that are here along with the whole ecosystem of companies that has built up over the past several decades in life sciences that has made this region one of, probably less than half a dozen magnets for companies around the country that are in this particular industry sector.

Now, ultimately those companies big or small, they need somewhere to locate from a bricks and mortar standpoint.

And that's what Spark is really trying to capitalize in the housing those companies and their future growth plans, but also complementing that with some of the other amenities that those companies or employees will be seeking in terms of residential, retail entertainment and that sort of thing.

So, I think it's a very smart move and I think it's just going to be yet another thing to keep the momentum in this space going for this region.

- Don, very quickly, you're gonna have the last word we have about 30 seconds left.

You know, we've talked about all these broad social policy issues, but what about the economy?

Do you expect the economy is gonna stay strong for a year?

Or is that gonna come back to haunt us to say, "Oh yeah, we've got an economic cycle."

And you've got about 20 seconds.

- For me, I'm super optimistic.

One of the things that are, that's really powerful and we'll look at North Carolina and others is the growth of companies that are finding the Southeast as a sweet spot.

And I think they're all driving towards growth.

And so the economic engine I think is actually very sound and we need to make sure that it has enough fuel to stay sound, so those creative hiring strategies, those creative childcare strategies and transportation, but I'm optimistic about the future from an economics standpoint.

- Don, thank you.

Optimistic note to end on.

Thank you Sepi.

Nice to see you, Andy, welcome back.

Of course, Chris, always nice to see you if you have any questions or comments, carolinabusinessreview.org.

Until next week.

I'm Chris William, have a good weekend.

(upbeat music)