>
Research Editor, and Gyorgyi Sutt, Research Analyst
Stop
the presses, football season has returned. For gridiron addicts, it
means adrenaline-filled weekends, lots of junk food, exciting victories
and yes, even some disappointing losses.
Have you ever thought about how much your company's labor issues and
football have in common? In case you haven't - for whatever reason
- maybe you should.
First of all, football and your labor force are perennial forces to
be reckoned with. Especially since you can score big in both cases,
or potentially lose just as big.
In addition, we all know that when it comes to football, a few points
can make all the difference in the world. It's the same with site
searches - when it comes to evaluating labor costs in various locations,
a few small numbers can make a huge difference.
And consider this: football teams and employment costs are usually
forged around a core of salaries, contracts and financial caps. Ultimately,
your search for a team of talented and affordable labor is really
not unlike that of most NFL general managers looking to sign key players.
There's no doubt that a solid game plan is absolutely necessary for
a first down on the field and in your company's drive for a winning
labor force.
Two-a-days
for your site search
Just
as football teams gear up during pre-season practice, your company
must conduct some hard-hitting research before you can really get
down to business on an impending relocation or expansion. Good data
is essential when it comes to sizing up locations.
That's where Expansion Management's 4th Annual Employment Cost
Index comes into play.
By strategically meshing criteria that includes wage and salary, uneployment
insurance, and workers' compensation costs, our study provides averages
of employment costs by state.
Our study
is based on costs for a hypothetical manufacturing company with 150
employees. This year, we used two specific industries: industrial
and commercial machinery and computer equipment (SIC 35), and measuring,
analyzing, and controlling instruments; photographic, medical and
optical goods, watches and clocks (SIC 38).
Our ECI
study also takes into consideration the number of people working in
each state in the selected SIC codes.
This is
an important ingredient because the larger the labor force currently
employed in a specific industry, the more qualified, skilled workers
that could potentially be within your reach.
"You
have to determine which costs really vary with geography and throw
the constant ones out," said Saul Grohs, partner with Fords,
N.J.,-based Location Advisory Services.
"And
when you do that, you'll find that labor, generally, is a very, very
big portion of the cost."
Scouting
strengths and weaknesses
Like any
good coach will do before a big game, you too must study the contenders
- the locations vying for your business. At the beginning of your
site search, you will most likely use discriminating factors to screen
out communities that do not meet your needs.
Labor costs
are one factor that will have a serious impact on how cost-effective
a location will be for your company. State averages, such as those
that our ECI provides, can be especially useful in certain settings.
"They
can come into play in border issues, such as if you are in a metro
area that's sitting right on a state border, what side of the border
do you hop to?" said Kate McEnroe, president of Atlanta, Ga.,-based
Kate McEnroe Consulting.
However,
there are some things to remember.
It's important
to dig deeper beneath the surface numbers. While our ECI provides
state averages - a fantastic starting point as you hone in on certain
locations - it does not represent the whole enchilada.
"Even
in a state that has a very high wage rate, we can generally find some
pockets - if you don't need too much labor - that have lower costs,"
said Grohs. "Don't take numbers at face value, they do not represent
the whole picture."
Good
people score points
In this
day of pricey talent and tight labor markets, it's imperative to get
the right people at the right price to ensure your firm's future health.
Customized data, such as our ECI study, can help you weed through
the initial communities. Then, you can start making cuts.
The inherent
appeal of football is that your team can win on any given day. Similarly,
when it comes to your company's site search, there exists a perfect
labor force in any given state, on any given day.
Rachael
Hedgcoth is associate editor, Les Gramkow is research editor, and
Györgyi Sutt is research analyst of Expansion Management Magazine.
You can contact them at (913) 381-4800.
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