Corporate Executive Survey Analysis: Investment in Human Capital Elevated Aspect of Location Decision

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In an environment where states are battling to create jobs and attract business, the popular and political discourse largely revolves around strategies to reduce business cost burden. While structural costs will always be an important part of the location decision, I think it is time to elevate investment in human capital. Area Development's 26th Annual Corporate Survey offers a lens through which to focus our attention.

In the 2011 survey, availability of skilled labor ranked second in overall importance among 26 site selection factors, up from seventh in 2010 and sixth in 2009. Whether from renewed optimism in the economy, or a realization that talent cannot be ignored long-term, decision-makers have again elevated human capital above many cost factors. This trend is reinforced by our own clients who are often frustrated with the lack of - or mismatch in - local labor skills.

Most of today's production operations demand skilled labor, e.g., advanced welders, CNC operators, machine tool programming, bioprocessing, etc. (focused on manufacturing because of make-up of survey respondents). Although the foundational aptitudes for these jobs may be transferable, the processes in which these employees operate are often specific to the company. Therefore, meaningful work force development must be customized to the needs of the employer, offering the ability to create training curricula that can prepare a worker to be immediately productive within the company's unique environment.

Some states have recognized the growing gap in labor availability and developed powerful training programs that are fully customizable by the business. The leaders in this area include Georgia QuickStart, LED FastStart (Louisiana), and Florida's Quick Response Training program. These programs not only provide a powerful tool for business attraction and expansion, they also serve to develop a next generation work force with skills that are updated to today's high-tech production techniques.

While costs, transportation, and infrastructure remain critical, states focused on providing customized labor training to meet the needs of modern businesses can also tout a steady supply of trained labor, an asset that is again moving to the forefront.

About the Author

Paul Hampton, Managing Director, Global Corporate Services, Newmark Knight Frank

Paul Hampton specializes in conducting analysis and developing strategy for target industry identification, economic cluster analysis, feasibility studies, market studies and economic impact analysis. Mr. Hampton is skilled in integrating advanced analysis techniques into the decision-making process to help develop and validate recommendations. He has worked with numerous governmental entities, private developers and economic development organizations of various sizes to help them identify key assets and develop strategy to promote economic growth.

About the Author

04/18/2014

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