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The Three Most Important Factors In Office Site Selection: Workforce, Workforce, Workforce

Forbes Human Resources Council
POST WRITTEN BY
Genine Wilson

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The old real estate cliché tells us that the three most important factors in determining the price of a property are location, location, location. When it comes to site selection for a new corporate office or operations hub, those three factors are workforce, workforce, workforce. It’s all about the available pool of talent with the skills and wage expectations that best fit a company’s business goals. And, as recent events have shown us, available talent can be more important than government-offered incentives.

In November, Amazon announced the highly anticipated locations of its new second headquarters, splitting the operations between Queens, New York, and Northern Virginia. Amazon is expected to hire 50,000 employees across the two locations, in addition to 5,000 projected jobs in Nashville for the company’s new East Coast operations hub. In 2017, iPhone component manufacturer Foxconn selected Mt. Pleasant, Wisconsin, to build a display‑screen manufacturing and research facility that it said could employ as many as 13,000 employees.

Aside from the news coverage about tax incentives used to lure these companies to their respective locations, one of the dominant themes that played out was the reasoning behind these site selections.

Jeff Bezos, founder and CEO of Amazon, said, “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come.” Virtually all the news on the site selection mentioned that Amazon chose to split its locations because no single market would have the capacity to fulfill or lure the anticipated 50,000 workers.

In Foxconn’s case, much of the news centered on the lack of available skilled labor in the Mt. Pleasant and greater Racine area, and the possibility that the company may bring in overseas engineers to fill its open positions. Recently, Alan Yeung, Foxconn’s director of U.S. strategic initiatives, said the company plans to work with the University of Wisconsin system to create a “resource pool” of local employees.

The point is that the available workforce in a given geography matters. Some companies locate their offices or operations near urban areas known for specific expertise, such as cloud computing in the Pacific Northwest or financial technology in New York. In fact, a lack of skilled labor can even drive a company to locate in an area with high taxes and a high cost of living, which seems counterintuitive to luring the best workers. In the case of Seattle Genetics, the company is opening an office in the Bay Area (paywall) to pursue workers it simply cannot attract to its Bothell, Washington, headquarters and because the region offers one of the best life sciences talent pools in the world. In short, the company is going to where the talent is.

So, how does a company decide where to go?

It starts with evaluating the viability of a geographic region and its available workforce based on data about the makeup of the workers. Local economic development organizations are a good place to start. Companies will receive all sorts of information about a region’s economic promise, available infrastructure (both now and in the future), tax implications and local school systems.

Based on my experience, I also believe a local staffing partner could help to provide data on the number of local industry-specific skilled workers and their education levels, along with wage expectations for the different positions that an organization will hire. Access to the right intelligence can help employers understand transferable skill sets that are abundant in the area, as well as how the local housing market plays into compensation, other benefits and amenities that competitive employers are providing, and much more.

This data is critical: A company can receive all the government incentives in the world, but if the right workers aren’t available in the region, then the value of those grants or tax breaks is void due to added costs and resources dedicated to more intensive recruiting.

Determining a location is an exercise in analyzing and understanding the area’s labor pool and discussions with local economic development agencies. It also means properly weighing government-offered incentives with two simple questions: “Can we find the right workers to achieve our business goals?” and “Would we consider locating there even if we received no government incentives?” If the answer to each of these questions is anything other than an absolute yes, keep looking.

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