The Leader Magazine

MAR 2019

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2. Change: Some of these location decisions can have real impact on people and businesses. It may require that teams need to work differently. It may mean that managers need to build community for a virtual team. It may require that new skills and behaviors are needed, that new people altogether are needed for an organizational transformation. Building a robust change program to help employees and leaders though the transition is critical. 3. Time: Implementing these strategies takes time. Many companies are locked into long-term positions and find it difficult to execute before the next round of changes occur. Building flexibility into real estate portfolios can help bring agility into labor and location strategies. The best lessons learned in taking a labor strategy from something interesting to something impactful is to create a clear process that gets you to a decision. From there, be sure to check in frequently with business leaders charged with making decisions. Don't get too far over your skis before making sure you 1) solve the right business problems, 2) have the right assumptions about business strategies, 3) vet the right options (don't get caught with a business leader asking, "Have you thought about…?"), and 4) have well-articulated decision criteria. Amazon's HQ2 decision had very clear decision criteria that the company deployed in assessing locations. Sites had to be located within 30 miles of a population center; mass transit had to be located on site; a major airport had to be within 45 minutes; it had to accommodate expansion to 8 million square feet (743,224 sq. m.); and it had to have fiber Internet connectivity, a highly educated labor pool and university system, a high quality of life, a local government eager and willing to work with the company, and a business-friendly environment and tax structure, with tax breaks and exemptions, fee reductions, workforce grants, and utility incentives. In the end, Amazon successfully synthesized all of the labor data and proposals and made the right call for the company because it was clear about what it wanted and what business problems and opportunities it was trying to solve. Labor-analytics influence was clear across the site- selection process for Amazon and its justification for splitting its second headquarters into two locations. Had Amazon proceeded with a plan to create 50,000 jobs in either of the single locations, it would have absorbed roughly 20 percent of the NYC market or a little over 25 percent of the Arlington market, which undoubtedly would have disrupted the established tech job market and upset the competitive and naturally innovative nature of those areas. The economic value in creating 25,000 jobs in each location is palpable. It includes increased funding for infrastructure; creation of more housing; lower cost of living for tech workers who are priced out of West Coast locations due to the high cost of living in both rental and residential properties; and an economic boost due to employees making higher wages and spending more money locally. Ultimately, business leaders need to start using labor analytics in their site strategies in a way similar to Amazon's example. Before moving forward with a location decision, real estate teams should work closely with other key stakeholders to first understand the workforce and business needs of the project. By leveraging labor analytics, leaders can put the horse squarely in front of the cart – guiding their companies to the right decisions for their locations, now and in the future. 14 March 2019 the leader Beth Choulas is principal, labor analytics and location strategy, at Hickey & Associates.

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