Competing For Talent At The Local Level
Technology allows people to work together without having to be in the same place at the same time. This situation gives companies added advantages when making site selection decisions. Now they can reach out into a wider range of communities and find the talent they need, while minimizing hard cost capital investment. The following provides a roadmap for this new process.
We, at FutureWork<ing> Together, have recently witnessed a growing connection between corporate real estate (CRE) functions and community-based economic development. The basic connection isn't new, since economic development agencies have been wooing CRE executives to bring their new facilities to town for decades. This means that companies now have additional leverage with communities. Companies can now ask: “Is this a town that will attract the kind of people I want to hire?”
It is time for a new model. As we say over and over, the world of work is changing, and those changes require companies and communities to take a radical new look at how they attract and retain talent. We all know there is a tremendous shift from muscle power and manual dexterity-based employment to jobs characterized by imagination, creativity and people skills.
And the way in which work gets done is also changing. Organizations are becoming smaller and more diffuse. Small businesses in the United States generate 75 percent of the new jobs. We believe that virtually all the future growth in employment will take place in small business (firms of less than 100 employees).
What remains to be done now is to find a way to move work to the worker, not move workers. The technology exists to move work tasks, products and vast amounts of data. Witness the rise of offshoring of knowledge in the United States. We ask a different question: Why not move that work to areas of the United States where populations exist who can do the work but do not desire to live in dense, urban areas?
Important Questions That Must Be Addressed By Businesses
If communities are the basic source of talent, then businesses can be seen as the ultimate consumers of that resource. Businesses have to ask a different set of questions when they consider locational strategies. Can they answer these basic questions?
These questions are the basic filters a firm needs in planning its locational strategy. But what about the supply side of the equation?
The Community Perspective
The challenge every community faces is to build local capability while simultaneously embedding itself in an interconnected global economy.
Talent has replaced raw materials and financial resources as the core driver of economic value. Work, and the wealth associated with it, now goes to where the talent resides. And that talent pool is a combination of both young and mature workers, all of whom are seeking high quality-of-life areas to live and work in.
Economic development is now more about attracting knowledge workers than it is about offering tax incentives for building factories. Linking state-of-the-art workplaces with skill-building programs is the key to preserving local communities, increasing the quality of life of local residents, and creating hundreds, if not thousands, of new jobs in the local economy.
The key questions from a community perspective have become:
Case Study: A Business That Stepped Up To The Plate
So, is anyone doing this and if so, what are the results? SCAN Health Plan is a medium- sized company in Southern California. In 2007, the company realized that competition for talent was a key to its survival. The company also realized that a remote work program would be attractive to two key demographics: Gen Xers and the elderly (their market). Bottom line is that SCAN Health Plan developed a distributed work program that allowed the company to tap into community talents pools, minimized environmental impact (through less travel), and reduced its overall real estate portfolio costs because it could close out lying branch offices.
After three years, SCAN Health Plan witnessed a 10 percent, overall reduction in real estate costs and increased its occupancy density by 25 percent. Even after combining additional costs for training, technology and redesigning some space, the company found a 40 percent return on investment.
Toward An Organizational Strategy Of Place(s)
What's a company to do now? The events of Sept. 11, 2001, and those that followed in quick succession, made it clear that business operations located in the continental United States cannot count on a stable political environment safe from terrorist attacks. In fact, our new sensitivity to terrorism has also made us much more aware of other factors that threaten business continuity: natural disasters, regional economic downturns; reliable sources of water and power; changes in local taxation practices and zoning changes.
Strategic real estate decision-making in the future must begin by answering three core questions:
1. Where's the talent?
What kind of talent do you need today, tomorrow and in five years? Where does that talent want to live and work? Are there universities and colleges in those locales that will be able to provide you with an ongoing stream of talent? What kind of community amenities are there that will be attractive to your targeted talent pool?
2. Where's the technology support?
You will have more workplaces than you used to have. All of them must be connected both within the local community and across geographic regions. Reliable high-speed Internet access is an absolute must.
3. Where's the multiple location(s) opportunity?
Which communities provide you and your workforce with an opportunity to connect central offices, home offices, and third places most efficiently? The quality and extent of the existing transportation infrastructure is a good indicator. Metropolitan areas with poor public transportation systems would rate lower as candidate locations.
What does all this mean for business success? Knowledge is clearly the primary source of competitive advantage, and knowledge workers drive business success. Yet, most companies are not managing knowledge workers effectively. They don't provide workplaces, working conditions, or technology support that meet the wants and needs of their most critical resource; but our research suggests that the costs of the support they do provide are typically 40 percent to 50 percent higher than they should be.
We would suggest that communities, which provide a quality of life and infrastructure to support distributed work models, will ultimately win out over communities that don't invest in these resources.
Charlie Grantham is with FutureWork<ing>TOGETHER (FWT), a small, private think and do tank that specializes on developing capabilities in citizens, communities and commerce endeavors to become sustainable in an increasingly uncertain world. To learn more, visit www.FWTogether.com.
A Community That Stepped Up To The Plate
People in San Luis Obispo, Calif., like to bill the city as the “happiest place to live.” They want to be a favored destination location for the up and coming talent pool. They want to be a magnet for all those highly skilled (and highly paid) people who make up the future of work.
Recently they stepped back and started asking the hard questions (see main article). Their response has been to reach out and aggressively market themselves as a high quality of life location, a place that provides all the amenities that attracts these people and has an experience atmosphere required in our new world of work.
So, the city of San Luis Obispo invested big money to host an event advertising itself as a prototype of a community that “gets it.” They aren't waiting for the talent (and companies) to come to them; they have inverted the traditional economic development equation (www.sloconference.com). This is a place where you can do business.
To learn more about San Luis Obispo, visit www.slocity.org.