Quality of life part of relocation decision

Companies looking at relocation or expansion consider the business case first. A clear understanding of real estate, labor, power and other costs of doing business are a must, especially in today’s economic environment. Communities without a business case that makes sense are excluded from consideration early in the process.

Once the numbers become enticing, evaluation typically turns to other factors. Quality of life is one of those hard-to-quantify, but important intangibles. Everyday influences such as housing costs, commute times and recreational opportunities all help set communities apart.

Titan Springs, an aerospace parts manufacturer founded in Southern California, moved to Hayden, Idaho. The ability of its employees to own a home without having to commute an hour and a half from Lancaster to Los Angeles was an important factor in that decision. Learn more about quality of life and its impact as a relocation consideration in this interview.

Talking about California's economy on "The Business of Life" radio show

Business consultant and radio personality Ron Tunick recently invited me on as a guest of his show, “The Business of Life” in Ventura, Calif. We discussed that state’s economic challenges and their impact on small business. Tunick offered several thoughts about California (“Our economy is in real trouble”), Idaho (“If I had to go to one place, it’d be Hayden Lake, Idaho. God lives there, am I wrong about that?), and Washington (On Spokane: “You talk about a sleeper city in this country where there’s great opportunity and a great workforce. And, for $250,000, you can buy all the home you want.”)

During the 30 minute interview, topics ranged from the disparity in tax structures and state budget troubles to commute times and air transportation. We touched on business considerations specific to small manufacturers. Tunick offered that California needs to get better business retention efforts, before concluding that under current economic conditions: “If you own a business get out of here get up there” to Washington and Idaho. You can listen to the interview here.

Workforce resouces can be invaluable

An educated, skilled workforce from which to draw is important to companies looking to attract and retain the best talent. Proximity to higher education institutions makes a big difference in the location decision, especially when they are clustered in a desirous area where students can enjoy a lower cost of living. It really becomes advantageous to companies when those colleges and universities work together to produce graduates in high demand fields, such as computer science and engineering, and support small business development through incubator programs. State universities in particular are turning out the best workers and often providing incubator space that is a tremendous asset to entrepreneurs and start-up businesses. Learn more in this interview.

Follow careful process to evaluate relocation options

Relocating a company involves much more than finding affordable, available real estate for a new location. Companies considering relocation have a lot at stake and should take their time making a decision – whether they ultimately stay or move. Ongoing operating costs have to be considered as well as key employee retention. Following a carefully laid out process will produce the best results.

Get to know each other. Spend time getting to know a community and what it has to offer. Companies should expect to be visited a couple dozen times by community representatives as part of the information gathering and diligence process. This allows both sides to determine if it is a good match.

Compare costs. Communities should be upfront about the cost of doing business and willing to compare them against several other locations if necessary. Typical comparisons include basic bottom-line considerations, such as workers compensation, labor costs, utility rates and unemployment insurance.

Consider key employees. Small-to-medium-sized businesses, especially manufacturers, have key employees they need to be successful. Identifying those key employees and involving them in the relocation process is a big issue. Some companies bring key employees on community visits and site tours to gain their input and buy in.

WSJ: State schools turning out best workers

Corporations and site selection consultants consistently rate workforce considerations of high importance in the relocation and expansion decision. Factors such as availability, cost and training programs are always critical to companies evaluating a location.

Jennifer Merritt, career editor at the Wall Street Journal, explained that recruiters value the work readiness of state school students even above the elite private schools. The WSJ asked the nation’s largest employers which schools produced the most academically prepared students with the most relevant training and best ability to succeed and grow with their companies. Recruiters indicated they found state schools produced the best students and were most eager to forge corporate partnerships, according to Merritt.

The six-month WSJ survey reaffirmed the Inland Northwest’s reputation for having a high-quality, available workforce. The newspaper ranked Washington State University graduates among the Top 25 most sought after by corporate recruiters.

WSU was the only Washington school on the WSJ list. The data is based upon 43,000 hires made by public and private corporations, government agencies and nonprofits over the past years in high-demand areas like engineering, consulting and finance.

WSU has strong business, engineering, and science programs, making its students a good fit for those needs. WSU has four campuses, including its main location in Pullman, Wash. and a large branch in Spokane, with 12 colleges, 200 fields of study and more than 100 majors.

Many issues affecting California businesses

In 20-plus years of recruiting companies in California, times have never been worse in that state. Workers compensation costs are skyrocketing again. The state pension fund is not sustainable and in serious trouble. Companies are struggling, especially in the aerospace industry. The situation is really out of control.

That kind of instability is difficult on companies in the best of times. Against the backdrop of broader economic struggles it can be devastating, which has companies considering their options. Watch this interview for more about the California business climate.

VIDEO: Impact of state budget crises on the relocation decision

Companies may not be moving, but they are planning. Businesses often take up to three years to consider locations, evaluate what each has to offer and make a decision. How states handle current budget challenges is being watched closely. The outcomes will prove telling to companies considering another state.

When companies do relocate, they’re going to move to states that can manage their budgets. They will look to minimize future state budget uncertainties. The state of Idaho as an example balanced its budget without a tax increase – and it didn’t take them forever to do it. The state of Washington is getting its budget balanced while looking for tax cuts, so it isn’t going to be a burden for the business community. Companies are going to look for states that can do that. Learn more about relocation decision factors in this interview.