Why in the world should a company care about quality of life when trying to select the best location for a future operating facility? After all, with the exception of a few key management people, most of the workers at the new facility already live there anyway.

The reason quality of life is important is because it translates into dollars and cents on the expense side of the corporate ledger? How, you ask? Because a reasonably good quality of life can be found just about anyplace; the only question is how much money it takes to buy that quality of life.

For most Americans, quality of life means being able to enjoy the fruits of a middle-class lifestyle, to be able to buy a home, to send their children to good schools, to live without the constant fear of crime, to feel good about their relative standard of living.

Look at it this way. If you have to pay a mid-management employee $50,000 a year to be able to maintain a certain standard of living, and, say, $60,000 in another city to maintain the same living standard, that’s a significant site selection factor. Multiply that by a large number of employees and that translates into a major cost difference.

For the past eight years, we have attempted to measure quality of life as a business-related factor, one that can be reduced to dollars and cents and compared among various locations throughout the United States.

In this year’s annual Quality of Life Quotient, we compared and ranked each of the 362 metropolitan statistical areas (MSA) according to 49 different statistical categories to come up with what we believe are the best places — from a livability and

The Top 20 percent of all MSAs earned the coveted Five-Star Quality of Life Metro” “ rating, while the next 20 percent were awarded a “Four-Star” designation.

What Makes for a Good Quality of Life?

To come up with our final rankings, we grouped our findings into nine major categories: affordable housing, good public schools, peace of mind, a balanced standard of living, broad opportunities for adult education, reasonable traffic and commuting, good commercial air access, a high adult education level and, from an employer’s perspective, a young, reasonably-priced work force from which to find good employees.

The most heavily weighted categories in Expansion Management’s Quality of Life Quotient address the ability of families and individuals to meet their financial needs and desires.

In this category, we used Coldwell Bankers 2005 average home price, as well as the U.S. Department of Housing and Urban Development’s fair market rental rates for studio apartments, and one-, two-, three- and four-bedroom rental units.

Good Public Schools. Education is also an important factor in our rankings because it determines whether or not a community is able to sustain a high quality work force that will allow businesses to grow and prosper in the years to come. For manufacturing companies, a quality secondary education system has a tremendous impact on the quality of workers that company is able to attract.

Likewise, families everywhere understand that the key to upward mobility for their children is a good education. That’s why, when faced with a substandard public school system, large numbers of American families are willing to assume the added financial burden of private schools. Still, living in a community with excellent public schools allows families to take that private school money and apply it to other basic needs such as housing, entertainment, vacations and future college expenses.

In this category, we used Expansion Management’s 2006 Education Quotient TM ranking of 2,800 school districts, along with its companion ranking, the 2006 Metro Area Public Schools Quotient TM, to compare the overall quality of all public schools — both urban and suburban — among all 362 MSAs.

In this category, we looked at FBI Crime Statistics in nine major categories, ranging from property and other non-violent crimes all the way to aggravated assault, forcible rape and murder.

Balanced Standard of Living. In every community there are rich folks and poor folks, but the real strength of a community is a balanced standard of living where just about everyone is able to enjoy the fruits of a middle-class lifestyle.

Median family income, per capita income and per capita disposable income levels were combined with cost of living, state and local tax burdens, family and individual poverty levels, and unemployment rates all were used to get a good feel for the overall

Adult Education Opportunities. Being able to improve one’s knowledge and skills is a particularly American characteristic, and that usually means access to a wide variety of institutions of higher learning. For employers, having access to educational institutions is an integral part of their work force training programs.

Traffic & Commuting. When most people think of the negative aspects of traffic and commuting, they think of bumper-to-bumper rush hour traffic in large cities like Los Angeles and Washington, D.C., where it may take 45 minutes to travel just five miles to work.

With that mindset, being able to commute to work at 60 miles an hour, as opposed to five miles per hour, seems ideal unless, of course, your job is 45 miles away, in which case you still end up spending 45 minutes behind the wheel. The only real difference is how fast your car is moving.

In this category, we looked at the average commute to work time, as well as the percentage of workers who commute to work in a county other than where they reside in order to get a picture for the movement of traffic to and from work.

Commercial Air Access. In today’s highly mobile society, convenient and plentiful access to commercial air service is something most people take for granted, That is, of course, unless they live in a place without it, in which case it rises significantly in importance. For many businesses, however, good commercial air access is an absolute necessity and communities without it are usually passed over in the site selection process.

Adult Education Levels. A well-educated community invariably demands, and usually creates, a higher cultural level. It’s one of those things we all seem to know intuitively, even if we can’t seem to boil it down to numbers.

Have you ever looked at any of the various ratings that purport to measure leisure or culture or recreation? The same metro can rank highly in one person’s ratings, while ranking near the bottom in another person’s ratings, even though both say they measure essentially the same things.

If you’re trying to get a feel for something “fuzzy” like the general mix of culture or leisure opportunities, the education level of the community is usually a pretty reliable indicator.

Good Employee Market. In this category, we looked at a wide variety of employment-related factors, such as the average wage, average annual unemployment rate, the percentage of the population that is in the 18-to-34 age group, and the education level of the adult population in order to get a good feel for the long-term attractiveness of the local work force. After all, those are demographic characteristics that most companies covet and, as a result, can be a pretty good indicator of the economic growth potential from an employee’s standpoint.

So if you’re an executive of a growing company and are looking for the best places for people in your operating units to live and work, we recommend you start with the 2006 Quality of Life Quotient.

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Bill King is the chief editor of Expansion Management magazine and can be reached at BillKing@Penton.com.

Michael Keating is the senior research editor of Expansion Management magazine and can be reached at mkeating@Penton.com.