Labor is always an important part of selecting a site. Especially if you're planning for a growing facility, the availability of quality workers - both now and in the future - becomes paramount. But no advisor can accurately predict exactly what your needs will be nor how the quality or quantity of an area's labor force will change. Add the effects of a downturned economy, and forecasting labor availability becomes a true challenge for site selectors.
"Even with the current labor supply, labor is still the most significant cost for site selection," says Bruce M. Hoch, managing director at DCG Corplan Consulting LLC in West Orange, New Jersey. "And it's even more difficult now to plan for a company's long-term needs, but reality demands that it be considered."
Predicting the Future
Hoch believes corporate planners could be making a mistake in assuming that economic conditions have reduced the importance of labor. The downtown has, he says, given corporations a greater choice and access to more labor-driven incentives. The standard three-city short list may be expanded to six or even nine locations.
"Many areas do have a larger labor supply, but qualified labor is the key," says Hoch. "Even if the specific skills you need aren't available, work force development boards all over the country are actively looking for jobs. They're becoming more competitive." Those communities are in some cases willing to retool their work force, training former furniture factory workers, for example, in skills needed for biomedical industries or other fields. However, he says, some locations "are playing catch-up after being dominated by one field. It can be difficult for some people to make the switch."
Hoch also advises companies to consider the impact their choice will have on the future of an area. "Companies have to be careful about the public goals they set in the beginning, especially during the current economic conditions," he says. "If a company announces that it will initially hire 200 and grow to 500, the community is going to take that to heart. If an area offers incentives based on those numbers, the company could be asked to pay it back if the goals aren't reached." He adds that while it's possible to keep things very confidential during the search process, the company really loses any control after an announcement is made.
Companies may benefit through a two-phase announcement. At the time of the initial announcement, Hoch says, the company may go ahead and purchase land needed for a site, made sure the infrastructure is present, and set about hiring the initial staff. When the planned expansion does become reality, the state or community may be willing to offer additional benefits, including more training and tax benefits.
It's also important to plan for the impact on labor if your facility is a major player in its industry or will anchor production for an in-demand product. Hoch cites the example of the Volkswagen plant under construction in Chattanooga, Tennessee, which prompted firms hoping to supply the facility to begin scouting possible locations in adjacent counties. "Other companies will take note very quickly where other people are locating," he says. "A few years ago, the Tampa-Orlando corridor was very hot. The two cities seemed to have an abundance of labor. Then a company came along and put a 6,000-seat call center in between Tampa and Orlando. That created a tremendous pull on the labor market."
Bob Prosen, president of the Prosen Center for Business Advancement and author of Kiss Theory Good Bye: Five Proven Ways to Get Extraordinary Results in Any Company, advises that the first step in planning for labor trends is looking at the population and demographic trends. These numbers are available from local economic development offices or through the U.S. Census Bureau. "Look to see if the population has been increasing or decreasing," he says. "Do graduates of high school and colleges stay or leave? What's the average age of the current work force? If it's older, you may be looking at a place that will be a retirement area in a few years."
Next, Prosen says, take a look at the educational institutions available to the area's labor force. "Look at all your needs. Your company may need more trade school graduates or community college students with particular skills than you would university-level graduates," he says. But if you don't see what you're looking for, he cautions, don't automatically rule out a location. "Company executives looking to move into an area can greatly influence the training offered," he says. "Technical schools and community colleges will welcome your input and, if the need justifies it, may even start up programs specifically for the needs of your industry. This basically allows you to grow your own workers."
Prosen also advises employers to pay attention to logistics as it relates to employees. In urban areas, the existence of a commuter rail line or other reliable public transportation expands the area you from which you can draw labor. It also indicates that area governments have planned for an expanding work force.
Finally, Prosen says, take a look at government and business in the region, both locally and on the state level. Are leaders forward thinking? Are business and industry representatives considered influential leaders? Are the area's labor laws employer-friendly?
Plan for the Second Round
You've no doubt heard that employee retention begins the first day the employee is hired. The same theory applies to expansion. Word-of-mouth from your first hundred employees can draw the next group in without any extra push on your part.
"Paying a competitive wage is a must, even if that wage goes up during the years after your new location opens," says Prosen. But the company culture also goes a long way toward getting the best employees. "When you move in, you have to decide what your company will be known for in the community," he says. "Why would someone want to work for you instead of someone else? Your reputation will grow quickly and will stem from the way you treat people."
That kind of positive workplace culture, combined with a close relationship with local leaders and cooperative officials at educational facilities, can give you the confidence to know that an area's work force will be ready to grow as your company grows.