Location Strategy: Aligning Workforce and Human Capital with Business Objectives

Inevitably, leaders of virtually every dynamic organization face a decision-point regarding management of their real estate portfolio. Perhaps the organization has outgrown its present market or building and executives need to consider expanding to another location. Or perhaps they need to consolidate the organization’s multiple geographically distributed real estate holdings to fewer, or even a single location. Or an existing lease may be up for renewal and a decision must be made to either renew or move the operation - or part of the operation; a call center or back office, for example.

Deciding where to locate the business may seem like a cut-and-dry real estate decision. In reality, though, another set of factors should be given much higher weight; factors concerning human capital and the ability to access, attract and retain the best people for the business’ needs. Given that labor, workforce and human resources costs often surpass real estate costs and human capital often exceeds 80% of a company’s operating spend, attention to labor analytics is a necessary component of a location decision.

A workforce strategy can either be local or global in scope, because regardless of whether the organization is evaluating its present location or considering a move of two blocks, a move to another city or state, or a move to another country the focus on attracting and retaining talent remains constant. Therefore fully evaluating competing locations requires exhaustive primary research – including community tours and on-site interviews with employers, recruiters, Chambers of Commerce and local, city or state governments - and secondary research focusing on demographics, salary/wage requirements in the area, taxes and community amenities. Likewise, factors like diversity, quality of life and vibrancy impact location attractiveness, influencing a company’s ability to recruit, relocate and retain talent from other cities.

There are over 360 metropolitan areas (urban regions) and over 530 micropolitan areas (small towns) in the United States alone, with varying workforce, skills and demographics. Identifying the location that delivers the optimal alignment of a business’ objectives and the availability and quality of labor requires navigating a matrix of analytics and insights and, more and more, it is becoming the key to business success.

Rajeev Thakur
Senior Managing Director, GCS


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