When expanding businesses begin looking for locations for future operations, their site location teams spend an enormous amount of time analyzing and comparing the numerous cost factors and how they would impact the company in each of the prospective sites they are considering. Most of these cost elements — wage rates, taxes and fees, real estate, fuel, to name just a few — are easily expressed in dollars-and-cents terms.
Factors like public education, however, do not easily lend themselves to a simple dollars-and-cents comparison. For example, one need only look at the per-pupil expenditures in urban districts such as Washington, D.C., or Cleveland or Kansas City to recognize more spending does not necessarily translate into better results.
Yet business leaders cannot simply ignore our public schools because those schools, as we speak, are busily engaged in churning out the work force for the next 50 years. That fact is not lost on corporate site location professionals.
“Local public schools are critical to shaping the basic skills and attitudes of the work force and remain a critical element of our analysis,” said Jim Renzas, president of Location Management Services, a Mission Viejo, Calif.,-based firm specializing in site selection, incentive negotiation and compliance management services for companies considering new facilities, expansions, consolidations, dispositions and relocations.
Our expectations for public schools also extend beyond the “three Rs” to what are often referred to as “soft skills.”
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“Local public schools are critical to shaping the basic skills and attitudes of the work force and remain a critical element of our analysis.”
— Jim Renzas, President, Location Management Services
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“Demands for work force performance go beyond the traditional work ethic and require individuals that can work effectively in teams, engage in innovative thinking and effective problem solving, as well as adapt to change and are quick to learn new concepts,” said John Rhodes, senior principal with Moran, Stahl & Boyer, a Lakewood Ranch, Fla.,-based site location firm whose clients have included Corning, FedEx, AT&T, Merrill Lynch, Coltec Industries and Dow Chemical.
Standard ratios, similar to actuarial tables, exist to project the population size needed in order to be confident of having access to the various required skill sets in sufficient numbers. For smaller metros trying to attract new businesses, or retain existing ones, high quality schools can be a population multiplier, enabling them to compete for projects with larger metro areas.
“Public education quality becomes important when we have to project the size of the qualified applicant pool,” said Dennis Donovan, managing partner of The Wadley Donovan Group, a Bridgewater, N.J.,-based site location firm whose list of clients includes IBM/Toshiba, Sony, Frito Lay, Hughes Aircraft and Home Depot. “We also look at quality indicators, such as standardized test scores. For manufacturing and back office, we like to see a good percentage of high school grads entering the labor market or going to trade schools, as opposed to proceeding onto a four-year college.”
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““Demands for work force performance go beyond the traditional work ethic and require individuals that can work effectively in teams, engage in innovative thinking and effective problem solving, as well as adapt to change and are quick to learn new concepts.”
— John Rhodes, Senior Principal, Moran, Stahl & Boyer
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It’s not just important in terms of analyzing the potential work force, either.
“Public education also plays a role in quality of life and the ability to relocate professional talent,” Donovan said.
Quantifying Metrowide Public School Quality
“The overall quality and characteristics of the area public school systems are essential and key items to the location-candidate evaluation and selection process,” said Mike Mullis, CEO of JM Mullis Inc., a Memphis, Tenn.,-based firm specializing in heavy manufacturing site location projects for companies such as Toyota, Johnson Controls Automotive, Harley-Davidson, Boeing and Briggs & Stratton. “All aspects of labor are typically the No. 1 factor in the overall location-candidate evaluation and selection process.”
The problem for corporate site selectors is battling perceptions we all have of the namesake school districts for our metro areas. Most of these large urban districts are characterized by poverty, high dropout rates and low achievement scores.
What is often not considered is that these urban districts usually only represent a small percentage of the overall student enrollment in public schools in that particular metro area. The Washington-Arlington-Alexandria, D.C.-Md.-Va.-W.Va., metropolitan statistical area (MSA) is a perfect example of this dichotomy.
Using the results from our 2007 Education QuotientTM ranking of every school district in the U.S. with at least 3,300 students (the article, “Today’s Schools Are Shaping Tomorrow’s Work Force”, can be found on the Expansion Management website under RESEARCH STUDIES), we grouped school districts according to their particular MSA, and weighted each district’s scores according to its total enrollment as a percentage of the metro-wide total student enrollment.
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“Public education quality becomes important when we have to project the size of the qualified applicant pool.”
— Dennis Donovan, Managing Partner, The Wadley Donovan Group
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There are 17 school districts in the Washington-Arlington-Alexandria MSA that met the criteria of at least 3,300 students. While the District of Columbia Public Schools fared poorly in our Education Quotient, it only makes up 8.6 percent of the overall MSA enrollment, while the Fairfax County, Va., and Montgomery County, Md., public schools — which are among the nation’s best — make up more than 38 percent of the total MSA enrollment.
In fact, 53 percent of all students in the Washington metro attend school in Gold Medal districts, a designation reserved for school districts that ranked in the top 20 percent nationwide.
As a result, the Washington-Arlington-Alexandria metro ranked No. 1 for public school quality among all MSAs with a population of at least 1 million. Click here for list of Top 15 Large Metros for public schools quality.
The Madison, Wis., MSA ranked No. 1 among the mid-sized metros, with a population between 500,000 and 1 million. There were six school districts in the Madison MSA that met the criteria of 3,300 students, and all six were Gold Medal school districts. Click here for list of Top 15 Midsize Metros for public schools quality.
Among MSAs with a population of less than 500,000, State College, Pa., ranked No. 1. The State College Area School District is the only district in the metro with at least 3,300 students. Click here for list of Top 15 Small Metros for public schools quality.
As with all of Expansion Management’s metro Quotient studies, we group the 363 MSAs into quintiles, with the top 20 percent being designated as “5-Star Public Schools Metros,” with the next quintile (percentile 21-40) being designated as “4-Star Public Schools Metros.” Click here for list of 5-Star Public Schools Metros for public schools quality. Click here for list of 4-Star Public Schools Metros for public schools quality.
A Partnership for the Future
Local business and education leaders are coming together in communities throughout the country to develop ways to ensure that our children have access to a promising future and that businesses continue to get the workers they need to grow and prosper.
“The schools, along with parents and local employers, form a team to produce workers that have the right qualifications and attitude to be effective employees,” Rhodes said. “This effort requires an integration of academic development, along with ongoing career awareness and exposure to actual work place environments and related expectations.”
Community economic development organizations are responding to the challenge.
“We consider work force development, including education at all levels, to be an integral part of economic development,” said Brian Hilson, president and CEO of the Huntsville/Madison County, Ala., Chamber of Commerce. “The chamber works closely with our three local public school systems, including a working partnership with Junior Achievement to provide career counseling to students through local business executives.”
In Lawrence, Kan., located 30 miles west of Kansas City, the Chamber of Commerce started a business-to-schools partnership program more than 10 years ago that is now known as LEAP (Lawrence Education Achievement Partners).
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“The chamber works closely with our three local public school systems, including a working partnership with Junior Achievement to provide career counseling to students through local business executives.”
— Brian Hilson, President and CEO, Huntsville/Madison County, Ala., Chamber of Commerce
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“Our hope is that children will grasp onto areas that excite them and begin the process that makes them develop into strong community-minded citizens,” said Laverne Squire, president and CEO of the Lawrence Chamber.
Many communities are creating partnerships between the school district and local community colleges and universities.
The city of Chico, a community in northern California, is engaged in a number of strategic initiatives, including working with Butte Community College to develop an Early College program for high school students; establishing, with Chico State University, an engineering academy; working directly with employers to create apprenticeship programs; exploring ways to introduce career pathways through entrepreneurship early in students’ training; and minimizing K-12 dropout rates, according to Martha Wescoat-Andes, economic development/redevelopment manager for Chico.
In top-rated State College, Pa., community leaders are not resting on their laurels.
“We have formed a Blue Ribbon Task Force on Workforce Development comprised of key industry stakeholders who are actively meeting with public school officials in advancing curriculum that matches regional skill set demands,” said John Coleman, president and CEO of Chamber of Business and Industry of Centre County, State College, Pa.
Some Final Words
“In today’s globally integrated economy, the single most important product that will make any community a true global competitor is a work force aligned with the rapidly changing needs of business strategy, said Gene DePrez, Americas leader and co-global leader, IBM PLI, Global Location Strategies.
“Nothing is more important than aligning the long-term human capital pipeline with future requirements, and that is a role that falls primary on local public schools,” DePrez said.
John Rhodes of Moran, Stahl & Boyer, agreed.
“The importance of the local work force is ultimately the most critical site selection factor because it is the workers that impact the quality and productivity of a manufacturing or service business,” he said.
And that’s why our public schools are so vital to the economic future of communities throughout the nation.
