How Important is Quality of Life?
As competition for talent becomes more intense, this hard-to-define concept may have more significant impact on future location decisions.
Susan Avery (Dec/Jan 08)

As competition for talent becomes more intense, this hard-to-define concept may have more significant impact on future location decisions.

The majority of the widely publicized lists are intended for use by the general public, particularly by individuals who are thinking about moving. No two lists are alike due to differences in methodologies and emphasis, which makes comparisons difficult. Companies seeking new locations generally don't pay much attention to any of them because they're busy compiling their own lists based on site selection factors specific to their needs

However, cities and regions that find themselves at or near the top of these rankings lists do have an advantage in attracting new businesses to their communities, not necessarily because they made the list but because they have the infrastructure, quality of life, and positive economic factors that got them onto the list to begin with. In today's mobile society, if an area is successful in attracting people, it will attract businesses as well, since it is more likely to meet one of the top criteria of almost any site search - availability of labor.

Usually a secondary consideration in corporate location decisions, quality of life is an elusive concept, impossible to precisely define and measure. Not only does it include the abstract "feel" or perceived public image of an area, it also encompasses a vast array of measurable factors that vary in importance depending on individual preferences and lifestyles. But despite its ambiguities, since it directly influences the numbers and types of people who choose to live in an area - and therefore the composition of the labor force - quality of life is actually a primary element in the site selection equation.

Current economic uncertainties, from the cost of gasoline to the mortgage crisis, have put cost-of-living issues ahead of other quality of life factors such as climate, cultural attractions, and even crime rate statistics. Meanwhile, competition for qualified talent - a growing challenge faced by companies throughout the world - magnifies the importance of quality of life factors, because talented people tend to gravitate toward the places where they want to live.

Qualified Talent
Since different people have very different opinions about their ideal place to live, a company's location choice should take into account the profile of the people that it will be hiring.

In Fort Worth, Texas, for example, Wisconsin-based Credit Union of North America (CUNA) opened a new 108,000-square-foot financial services call center in April 2007 that today employs about 500 and is expected to increase its work force to 830 by the end of 2008. According to Joseph Taricano, CUNA's vice president of operations, who was in charge of the site search, the decision "was really all about labor." Availability of labor and cost of labor were the top two criteria.

"We chose the Fort Worth market because we knew that we could get the type of people with the background and experience we need," he says. "There were a lot of people that worked in operations and customer service functions, and we were obviously quite taken with just the whole Texas environment. Fort Worth in particular is very business-friendly." Availability and cost of land was also a factor, but qualified talent was the most important. The site chosen by CUNA - literally across the street from the Dallas-Fort Worth airport - was found to be the hottest location on a map of where prospective employees lived.

Taricano, who transferred from Madison, Wisconsin, was one of only two people relocated to the new facility, with all other hires being local. He describes the Fort Worth work force as a "melting pot," noting that in the suburb where he lives now, one next-door neighbor is from Brooklyn, New York; another is from Minnesota; and the people across the street are from Youngstown, Ohio. Because the company is still in hiring mode, groups of new employees are starting every week, and Taricano says that "when I meet new employees, I always ask how many Texans are in the room, and typically only 25 to 30 percent are Texan.

"People move to this market out of choice because there's something about it that they like," says Taricano. "It's a destination because it's a big market. There are opportunities, and it's growing." He also praises the quality of the public schools, and he predicts prosperity for the city over the next decade due to natural gas resources now being tapped, which will further increase Fort Worth's quality of life. "Happy people equate to happy customers," he says.

Fort Worth ranked first in the large markets category in the 2007 Best Cities for Relocating Families list compiled by Worldwide ERC and Primacy Relocation. Taricano recalls that his wife, a California native, was "thrilled" when she found out that they were moving from Wisconsin to the warmer climate of Texas. On the other hand, a friend of his in Princeton, New Jersey, he says, "would never fathom living in Texas."

People and Possibilities
Meanwhile, back in Madison, which has become a hub for biotechnology innovation, there are entrepreneurs who would not want to live anywhere else. The Madison area appears on numerous 2007 best locations lists. The Kiplinger/Richard Florida 25 Best Cities list, which selected five cities for each of five different demographic groups, includes Madison as one of the top five Best Cities for Empty-Nesters. The 2007 Places Rated Almanac by David Savageau ranked Madison 10th nationwide based on a wide array of quality-of-life factors, and Money magazine ranked Middleton, a smaller adjacent municipality that is still part of the Madison MSA, number one on its list of Best Places to Live 2007, which focused on smaller towns with populations of 7,500 to 50,000.

John Biondi, a biotech entrepreneur who spent the '80s and early '90s in the Madison area and then lived in Atlanta for six years, returned to Wisconsin in 2001 "absolutely for quality-of-life reasons," he says. "There's a great intersection here of people and possibilities that make Madison an interesting place to live." In 2006, Biondi founded biofuels enzyme developer C56 Technologies as a spinoff from Middleton-based Lucigen, a company specializing in cloning technologies. Recruitment of qualified talent - currently a staff of five plus several interns - has not been a problem due to the presence of the University of Wisconsin at Madison. "You don't have to go all over the world to find high-caliber, highly trained people," he says. "They're already here, imbedded in the community."

Although Biondi admits that the weather "can get chilly," he prefers Wisconsin's climate over the traffic congestion that he experienced in Atlanta. He likes the easy access to both outdoor recreation and downtown cultural events, and he also prefers what he calls the "ethic" of Madison: "It's a very health-conscious, environmentally-conscious, artistically conscious community." It should be pointed out that Atlanta has its fair share of praises, too, including having been rated one of the five Best Cities for Married With Kids by the 2007 Kiplinger/Richard Florida list.

Also passionate about the Madison area's quality of life is Tera Johnson, president of bio-agriculture business development company Steele Ventures. "I went to graduate school in Madison and never left," says Johnson. "The reason I stayed is quality of life." In October, Steele Ventures was closing on $13 million in financing for a new company, Wisconsin Specialty Proteins, scheduled to break ground in January for a new facility in Reedsburg, Wisconsin, where it will employ 20 in the production of value-added specialty whey protein products for the food and nutritional supplements industries.

Outdoor Recreation
Portland, Oregon, which was listed third in the 2007 Cities Ranked & Rated book by Bert Sperling and Peter Sander, and fourth in Savageau's Places Rated Almanac, recently attracted New Zealand-based Icebreaker, a maker of performance outdoor apparel made from ultra-fine merino wool, and Germany-based SiC Processing, a recycler of silicon carbide and glycol slurry used in silicon wafer manufacturing.

Icebreaker chose Portland for its U.S. headquarters, design center, and flagship retail store not only for the talent pool available there but also for the lifestyle of the area, according to Sandy La Roe, manager of the design center, which employs 14 people. The company also considered Boulder, Colorado, and Boston, Massachusetts, for potential sites, but settled on Portland "because it was really the true epicenter of performance apparel design and I was able to quickly put this very talented team together," says La Roe. "As far as quality of life, Icebreaker is intended for mountain and urban wear, and the Portland area offers endless outdoor recreation surrounding a very progressive urban center."

For SiC Processing, which considered sites in Missouri and New Jersey before selecting Portland, finding a qualified plant manager was one of its top priorities. Process engineer Damon Doelger, who lives in Portland, was offered the job but "had no plans for leaving the area," he says. "They said that if you want the job, we'll locate in Portland." SiC's new facility there began operations in April 2007 and now employs about 25 people.

Quality-of-life factors that attracted Doelger to Portland and made him want to stay included "the cleanliness and the greenery," he says. "It's a rather small city but it does supply most or all of the benefits of living a metropolitan life." Proximity to both the coast and the mountains were also important; one of Doelger's interests is rock climbing. "It's a different pace of life here," he adds, noting that "Keep Portland Weird" is a popular bumper sticker throughout the city. "Either you like it or you don't."

Work-Life Balance
"In the work-life balance, don't forget life," says Scott Sullivan, senior vice president of GMAC Global Relocation Services. Based on his experience with helping relocating companies market new locations to transferring employees and attract prospective new employees to an area, Sullivan says that the three most important quality-of-life issues for people right now are cost of living, safety, and schools.

"As generations get older, people look at quality of life more strongly," he says. Once a location decision has been made, "companies must understand at their peril that they need a long-term, sustainable plan for attracting people. One of the biggest challenges in the U.S. and globally is the shortage of qualified talent, so it is extremely important to ask, if they're not already there, where are you going to attract them from?"

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