November 8, 2021

Site Selection, Hiring Ability, & How They Affect Each Other

Site Selection, Hiring Ability, & How They Affect Each Other

Few industrial businesses have escaped the labor shortage currently happening in the United States. A lack of available workers has limited capacity at factories, warehouses, transportation operations, and more, ultimately hurting profitability at these facilities and contributing to broader supply chain disruptions. With workforce issues now top of mind for business leaders, it has become more critical than ever before to consider labor as a vital component of any site selection process.

Finding a Location with a Viable Labor Pool

While particular labor needs will vary depending on the business and industry, certain factors will increase the likelihood of an available talent pool that building owners and lessees can leverage. When scouting a potential site, ask the following questions.

Are there educational institutions nearby?

Locating an industrial business in an area with technical colleges will increase the likelihood of a skilled labor pool already existing in the region. Site selection teams should meet directly with these institutions to gather information about:

  • Areas of study offered that are relevant to the business
  • The most popular degrees/certificates earned
  • Percentage of graduates that remain in the area after graduation
  • Collaboration opportunities with the institution’s career services program

Building a foundation for relationships with these organizations during the initial site selection investigation can help establish a reliable labor pipeline down the road if the business chooses to set up shop.

How many competitors operate in the region?

Nearby competitors can be a blessing and a curse. On the one hand, the presence of similar businesses means experienced labor that could potentially be recruited. But, on the other hand, too much local competition in the middle of a growing labor shortage might make recruiting and retaining talent difficult.

Whether the presence of competitors will turn into an advantage or disadvantage depends entirely on the specific business and its recruitment and retention practices. For example, the existence of many competitors will prove advantageous for companies with an employee-first methodology and positive corporate culture. Those qualities may prove quite attractive to candidates who may feel undervalued by comparison at another company. Conversely, a company looking to minimize labor costs may struggle in a highly competitive labor environment where they will need to offer higher salaries and benefits to appeal to candidates.

What does the broader labor market look like?

Employment trends established during the COVID-19 pandemic have made it easier for candidates to move between industries. For example, a warehouse associate, a grocery store clerk, and a restaurant line cook may all get similar pay and benefits from their respective employers. When those workers decide to change jobs, the doors are currently open to a much more comprehensive range of options.

For this reason, site selection teams for industrial businesses need to give general employment trends in a region more weight. Determine the following statistics:

  • Population size
  • Unemployment rate
  • Average hourly wage
  • Average length of employment

Understanding these numbers and how they intertwine will help the site selection team determine if a new facility can compete for labor in the general market.

While the site selection process for industrial operations has always had a labor component, current labor shortages across industries make it essential to site new facilities in areas with an available workforce. Asking questions such as those discussed here will help site selection scouts determine the viability of the labor pool in a prospective location.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost efficient solutions, and a reputation for success.

Mr. Frank P. Crivello began his real estate career in 1982, focusing his investments in multifamily, office, industrial, and shopping center developments across the United States. From 1994 to 2008, Mr. Crivello assisted Phoenix Investors in its execution of its then business model of acquiring net lease commercial real estate across the United States. Since 2009, Mr. Crivello has assisted Phoenix Investors in the shift of its core focus to the acquisition of industrial real estate throughout the country.

Given his extensive experience in all aspects of commercial real estate, Mr. Crivello provides strategic and operational input to Phoenix Investors and its affiliated companies.

Mr. Crivello received a B.A., Magna Cum Laude, from Brown University and the London School of Economics, while completing a double major in Economics and Political Science; he is a member of Phi Beta Kappa. Outside of his business interests, Mr. Crivello invests his time, energy, and financial support across a wide net of charitable projects and organizations.

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