Phil Castle, The Business Times
What do companies want in looking for places in which to open or relocate facilities?
“Everything,” according to Kathy Mussio, co-founder and managing director of Atlas Insight and a management, incentive and site selection consultant.
While that short answer constitutes a joke, companies seriously consider a lot of quantitative and qualitative factors in selecting sites, Mussio said. That includes labor availability and cost, infrastructure, taxes and lifestyle.
Incentives also play an important role in the process, Mussio said during her presentation at the Western Colorado Economic Summit in Grand Junction. While incentives alone won’t made a bad location good, they make good locations even better, she said.
Mussio said her firm helps companies determine where to locate in moving or expanding their operations — a process she said involves eliminating potentially bad locations as well as narrowing the choice of good locations.
Hundreds of factors can be involved depending on the individual business and operations involved. It’s a matter of identifying the most important factors and weighing them, she said.
Visiting potential sites constitutes another crucial part of the process, she said. “On paper, it’s one thing. When when you get on the ground, it’s another.”
The interactions among site selectors, company officials and local business leaders can make or break a deal, she said.
The availability and cost of labor ranks at or near the top of factors companies consider in selecting sites, Mussio said. That’s especially true in what’s become one of the most competitive labor markets in the United States in 10 years. By one estimate, manufacturers have 500,000 unfilled job openings, she said. “It’s not that they don’t want to hire. It’s that they can’t.”
Different types of operations come with different attributes, Mussio said. Company headquarters tend to pay high salaries, but also require proximity to a major airport so executives can travel. Advanced manufacturing operations often involve large capital investments and require good transportation and infrastructure. Prevailing local wages can be a factor. Call centers create large numbers of jobs and tend to fit well in smaller communities, she said.
Incentives help in attracting companies to a location, Mussio said, in shortening the time required for a return on investment, reducing some of the risk involved and generally making a company feel wanted.
It helps even more if incentives are offered upfront, there’s less red tape involved and the approval process moves quickly, Mussio said.
While there’s an increasingly prevalent attitude incentives are evil, that’s not the case, Mussio said. Incentives constitute an investment that pays off in jobs and capital investment. “Incentives typically should be a win-win.”
Mussio said analyses conducted as part of site selections quantify the effects of a given project on a local community. What those analyses don’t include is the philanthropic giving and volunteers companies also bring to a community.