Whether it is about a community's "soft" investments or about things to do, quality-of-life issues can play a significant role in the site selection process.
By Debra Williams
THE QUALITY OF THE PUBLIC SCHOOLS, the number of city parks, and the area nightlife are often hot topics at city council and neighborhood association meetings across North America. Those same subjects, though, are also showing up on the agendas of site selection committees - even in a period of rising unemployment and plentiful labor pools.
Quality-of-life factors have always taken a back seat to tax rates, available incentives, real estate costs, and transportation issues - And this trend continues. However, in some industries, quality-of-life factors are breaking into the top-five considerations when choosing a site. Why? Because in technology firms and industries dependent on highly specialized workers, quality of life directly affects the quality and cost of labor. For companies recruiting personnel on a regional or national basis, quality of life has become a bottom-line issue.
Quality-of-life factors are generally those things that influence the life that your employees will lead during their time off. Cultural activities, the quality of the local school systems, and accessibility to entertainment are common ones. Some consultants also include housing costs, the cost of living, and the availability of higher education. Most of these factors have remained the same for all of the industrial age, but experts are seeing some new trends.
Recreation is becoming a more significant quality-of-life issue, because people spend more time outdoors and planning weekend activities than they used to. Quality-of-life issues are also shifting to reflect corporate America's growing need and desire for diversity. "Whether they ask for it outright or not, many companies are looking for inclusive communities that offer diversity," and those that appeal to a broad spectrum of races, creeds, and lifestyles, explains Steve Johnson, senior vice president for economic development strategies at Greenfield, Ind.-based Thomas P. Miller Associates.
Johnson explains that companies seeking inclusive and diverse communities are often viewing it as another way that they can be guaranteed to attract the best and the brightest in their fields. Just like other quality-of-life issues, a community's inclusiveness is very hard to quantify. "It's tough to try to reduce something like that to numbers, although it's a place to start. You can look at the census data and get raw demographics, but I'm not sure that tells you anything about the true inclusiveness of a community."
Johnson instead recommends that companies that are concerned about inclusiveness look at city and county leadership and the makeup of influential boards of directors as an indication of how diverse and accepting a community really is. Many companies are locating in bedroom communities of large metropolitan areas. These often offer the small-town qualities that appeal to families yet have an exciting night life and arts community within an hour's drive.
Another factor being mentioned more and more is the existence of a "counter-culture." "Now, communities want to be "hip," to use a word from the 60s," explains Bob Marcusse, president and CEO of the Kansas City (Missouri) Area Development Council. "People want to know, "How's the music scene?" "Is there an alternative culture I can tap into if so inclined?" This is especially true for bright and talented young people in technology."
Marcusse says that his organization has always seen a strong interest in quality-of-life factors among businesses inquiring about locating in the area. SmartCities, the agency's quarterly newsletter, even includes a section on lifestyle. "It's always been an issue no matter what size or type of project we'[re dealing with," says Jill McCarthy, vice president of business development for the organization.
"The projects that we become involved with are very competitive with other metropolitan areas. We're very focused on new-business attraction, and quality of life can be the deciding factor for some companies."
Satisfying a Divided Work Force
If you're looking for an educated work force - people with professional and specialized skills - you now know that quality of life is important. With so many variables, though, how do you know what appeals to the workers you want to draw?
The age and marital status of your work force are key determiners. Married people with children are concerned about commute times and the presence of a good public school system, while recent graduates and unattached employees will be more interested in the area nightlife and social events and opportunities.
Of course, members of the work force won't all be under 30 and jet setters. They're not all going to be married and over 40, either. You'll probably have both sitting side-by-side, manning your phones, computers, and conference rooms. Many of the younger ones will eventually marry and become concerned about school systems, while some of the more mature ones may become divorced or empty nesters who want to get out and about. So, the ideal balance is to try to find an area offering something for everyone. To determine which quality-of-life factors are most important to your employees, take an internal poll. After all, your potential employees at your new location would likely mirror your current ones. Keep it confidential and/or anonymous, not so much because the information is sensitive, but because you're more likely to get honest answers. How many of your employees would like to be near bike trails? Would they rather live within an hour of a national park or have a good library?
Begin by asking them to list their favorite leisure-time activities. Then, ask employees to rank a variety of available factors, ranging from access to a good MBA program to a child's ballet troupe. Armed with this information, you'll be ready to assess how attractive an area's lifestyle factors will be to your key work force.
Regardless of how many professional employees you're going to recruit, quality-of-life factors are rarely a driving force in site selection. More likely, they may be used as tie-breakers when areas are running in close competition.
Once the search is narrowed down to just a few choices, companies should seek out recruiters and economic development agencies in each area to find out how successful other companies have been in terms of attracting employees to the area. Online resources geared toward residential real estate customers also offer a lot of information about quality-of-life factors.
The Future of Quality of Life
Most experts say that the importance of quality-of-life factors has seen a downturn as unemployment rates have risen recently. Johnson believes that this is only temporary, and companies that fail to consider it could pay a high price.
"Before, a community always had to demonstrate that the work force was there at a location," he explains. "Economic developers operate on the assumption that if you locate a big business, people will follow the jobs. It's the law of supply and demand and it's always going to be true to some extent. As you move up the food chain, though, to value-added companies, it's the other way around. Instead of locating wherever it wants, now the company, regardless of its size, is more concerned about people. A lot of people are predicting [that] the labor shortage will come roaring back in a few years and then this issue will be back in front."
One thing that site selection teams should keep in mind is that unemployment, like so many other business factors, runs in cycles. A facility that will be operating for 30 or 40 years can't really base much of its decision on such a temporary factor as this month's or even this year's jobless rates. Instead, look at the long-term availability of people to fill your key posts and let those determine the weight that quality-of-life factors should receive in your decision.
Becoming a Community
Johnson doesn't call the amenities of a locale quality of life; instead, he refers to it as "strategy of place." "I want to differentiate between location and place. Location is a geographic place on a map that may or may not be relevant to your business. If a company needs to be based within a certain proximity to customers, location is very important, but it's still longitude and latitude. Place is all about what makes any and every community unique or special. It has more meaning now than it ever has had especially as jobs become more technology-based and less dependent on raw materials. The more that a company can be anywhere it wants to be, the more important place becomes. If a company is not dependent on being next to a river or next to a certain interstate, then the principals are going to pick the best place to live."
Johnson says that many communities are realizing this and responding by creating more favorable quality-of-life factors. "A community can't change its location, but it can change its place."
To find out how committed a community is to changing its place, Johnson suggests following the money. "It's one thing to talk about it, but what is a community actually doing? It could be simple things like creating bike trails in urban areas or softer investments." It is important to actually see whether or not they are implementing policies as a community that are designed to attract leading-edge companies.
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