The Leader - September 2007 - (Page 28) loca tIoN velocI ty: G o o d to day, but W hat abo ut to mo rro W ? FI G . 3 l a b o r ma r k e t c o mp a t I b I l I t y Near-Term Attractiveness high Ideal Magnitude Long-Term Risk medium low demand availability stability cost demand availability stability cost additional considerations for offshore locations n Economic/political stability n Currency stability n Labor legislation, especially regarding termination n In-country migration trends n Language skills n Other areas in country that have the human capital and infrastructure resources to accommodate your type of business (if there are few or none, a “red flag” should be raised) Beyond employers, it is also a good idea to interview other organizations to gain a broad perspective on the labor market environment. Such entities may include: n Personnel agency n Local chapter of the national HR professional association n Local office of the state labor department Education/training officials n Economic development organizations Bottom line, when assessing the local labor market your team should be searching for acceptable answers to most of the above questions. Analyze field interview results along with previously gathered statistical data and the existing/emerging competitive employer roster. Then it is necessary to apply your best judgment on whether an area is likely to overheat, thereby creating stiff human resource challenges down the road. If this eventuality is likely, then the specific location is probably is not the right one for your new operation. n exIt strateGy In nearly all instances, companies should plan for the possibility of eventually vacating the new site. This could result from location velocity or other variables (such as shifts in a company’s products/services). One component of the strategy should be annual monitoring of local labor market conditions. It would be worthwhile to gather/analyze data such as the rate of change in population, labor force, specific industry employment, household income, salaries , housing prices, and commercial real estate. Further, it is advisable to consider the number of new and expanding employers, downsizing employers, company staffing experiences (such as open positions, qualified applicant flow, time taken to fill open positions, recruiting tactics, turnover, salary hikes, and new HR programs (e.g., flextime). Beyond measuring location velocity, exit strategies should also embrace other company sites that could accommodate growth or the impact of downsizing the original th e le ade r 28 september / october 2007
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