Growing California Company Moving One Operations Center to Three Other States

There are times when being a site selection consultant means it’s time to kick back, have a bourbon, light a cigar and be delighted about how an assignment worked out. Well, I don’t drink bourbon, nor do I smoke anything, but that describes the mood I’m in now that a California client has wrapped up a project and will relocate employees to three out-of-state metropolitan areas.

The company’s executive leadership knew that it was time to cut costs. They understood that moving jobs elsewhere would lower expenses, but they worried about the reaction of employees. Because of decent pay, excellent benefits, and continual displays of respect at the firm, employee loyalty is strong – so strong that employees stay for many years. Will a potential move ding employee morale?

The CEO, who has direct communication with many employees, was open about the prospects of moving the Operations Center. He asked potentially affected employees for their thoughts; also, Human Resources conducted a “Tell us where you are willing to move to” survey.

The results showed quite a number of employees were willing to relocate, and they ranked their preferences against a list of about a dozen metro areas in numerous states. Some respondents marked up their surveys and volunteered metro areas they thought should be candidates.

My part of the project was pretty much the “standard stuff” in evaluating a dozen metro areas, inquiring about business factors like the cost of operations, available local workforce, tax climate, litigation environment, cluster analysis, political risks, and so forth. Since the company has facilities in different parts of the country, we also examined each airport’s non-stop flight pattern.

Part of the objective was to find suburban locations with office leasing rates lower than what they’re facing in California. That part was easy since every location studied was able to deliver on smile-inducing rates.

Significant effort went into examining qualify-of-life factors important to employees. We examined cost of living – especially housing prices – spousal employment opportunities, health care options, childcare options, quality of education, personal tax burdens, and access to local colleges and universities. Included were assessments of the local cultural and sports assets.

My requests to Economic Development agencies treated lightly the prospect of economic incentives because it was probable that the number of relocating employees would be below required thresholds. Executives didn’t bat an eye at the lack of inducements, saying, “We always assumed we wouldn’t qualify for incentives and planned to move the jobs anyway.”

As I write this, office leases are being negotiated in three out-of-California metropolitan areas. Employees of the company are volunteering to move to this or that location. And apparently the entire process was completed without a lot of anguish within the company.

Oh! Almost forgot to say that of the metro areas that were passed over, two impressed company officials so much that they are now on a list for consideration for future projects.

If you are interested in the project and why it was so successful, let me know. I’m unable to identify the company, but even so I can share valuable insights with you.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow.