How getting site selection strategy wrong can cost community jobs

Site selection is a process that is becoming highly critical for communities to be aware of and compete within but also for businesses involved as their success is tied to getting it right.

In a nutshell, site selection is the process of choosing the best location for an anticipated use. Site selection involves measuring the needs of a new project against the merits of potential locations. The practice came of age in the past 30 years as corporate operations expanded to new geographies on a national and international scale.

Many times, companies hire outside consultants to look for these new places to expand and grow businesses. Recently, Area Development magazine conducted a survey showing the key drivers for the site selection practice involving economic development related projects. Key factors included:

Access to highways and interstates: Highway accessibility typically tops the list of individual site selection factors, with 93.8 percent of those surveyed ranking this as “very important” or “important,” according to the survey.

Labor costs: Saving even $1 per hour on employee wages can translate into hundreds of thousands of dollars in savings each year for some companies. Given those statistics, it is no surprise that labor costs consistently rank as one of the top factors in site selection decisions.

Right-to-work state: Low-union and right-to-work status ranks in the upper middle of site selection criteria lists, but those factors certainly carry considerable weight in the overall decision-making process for many manufacturers. That industry is very high on Oconee’s list of target sectors.

Occupancy and construction costs: One of the biggest up-front costs for expansion or relocation is occupancy and construction.

Workforce readiness: Available labor, especially skilled labor, is considered to be a key driver in site selection decisions. Workers are often the lifeblood for a company’s operation.

Oconee and South Carolina obviously do very well in these categories, which is why manufacturing remains strong here. In addition, it should get stronger in South Carolina as many economic development groups similar to the Oconee Economic Alliance are putting more emphasis on issues such as strengthening the workforce and having ready industrial product in place.

However, one of the key changing variables in site selection is distance from major urban areas. For decades, the majority of companies in most business sectors wanted a major metro area in order to grow. The rise of the Internet, telecommuting and being constantly wired in has opened a lot of new opportunities for counties such as Oconee. Companies can do more than just manufacturing in more rural areas now. We are seeing the death of distance when it comes to site selection.

Oconee County and the State of South Carolina is poised for a lot of great things because we offer a lot of the desirables that site selectors look at when making decisions on locating new businesses and manufacturing. It is going to take a coordinated effort amongst all partners to make it happen, but it will happen. We must continue to invest in ourselves as those investments will pay off in the long run and economic prosperity will continue to grow for all South Carolinians.

 

ABOUT THE AUTHOR:

Richard K. Blackwell is the executive director of Oconee Economic Alliance, which is a public-private nonprofit effort to accelerate job creation and capital investment, increase per capita income, diversify the local tax base and generate awareness of Oconee County as a business location. To learn more visit www.InvestOconeeSC.com.