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A Message to CREs: What’s Old Is New Again

Oct 05, 2023 Katie Culp, MBA Tags: , , , , ,
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This article originally appeared in Area Development.

I’ve spent the last 25 years working in and around economic development. The last 18 have been spent in the private sector working with companies interested in locating new or expanded facilities and exploring economic incentives that support their growth plans. I’ve been in the industry so long, in fact, that I remember working on RFP responses to site selection consultants in the late 1990s that required hard copies to be snail-mailed back to the recipient. We had months to meet deadlines, and we faxed relevant components of our response to other stakeholders for review.

Whether it was the worldview from my then-inexperienced lens, or it was actually the case, personal relationships seemed to be at the backbone of every large economic development deal. Site selection consultants and developers or general contractors had longstanding relationships with the communities that won the big deals. Direct research, anecdotal evidence about workforce and other community characteristics, and personal interviews with local employers and placement agencies were the things that moved the needle for final location decisions.

Then in the early 2000s came the automation of everything. Turnaround time on RFPs became weeks, not months; data was expected more quickly; and companies had increasingly tighter — some might even say unreasonable — deadlines. It also seemed like final location decisions were made without much conversation, if any, with communities themselves. Less time was spent with “boots on the ground,” engaging with community leaders to learn about the qualitative information gleaned from a narrative that doesn’t exist in any database. And more time was spent around conference tables pouring through the quantitative data as a means of directing a final location decision. Personal relationships mattered, but generally, they mattered less than the bottom line.

Fast forward to today. Relationships matter but are still less relevant than they were 30 years ago. Prospective sites and communities must make a compelling case on paper, oftentimes before they even know they are being considered. Having access to certain types of data (especially the type you purchase) is the expectation rather than an impressive extra. Fax machines are somehow even more extinct than household telephones, and RFPs are not the primary way most companies conduct a site selection assignment.

And yet, other site selection practices that dominated my early career are coming back around. Practices that were considered somewhat outdated just a few years ago are becoming a prominent part of the final location decision. Namely, face-to-face interactions with community leaders and anecdotal research.

Getting the Whole Story
As the employer, you know better than anyone how important an available, reliable, and affordable workforce is to your bottom line. Data points about unemployment trends and growth in specific occupational areas are important, but they do not tell the whole story. I’ve seen more and more clients who are laser-focused on wanting to know what is really going on with a community’s workforce. Obtaining that knowledge requires live humans to meet. Interviewing community stakeholders and local employers in order to understand where there are pockets of underemployed workers is invaluable. In the final few meetings I attend leading up to a final location decision, there is more airtime spent on this anecdotal and qualitative data than I’ve ever seen before.

Company real estate leaders like you are slowing things down just a tiny bit in order to ensure all meaningful inputs are gathered. While it’s still true that communities are expected to provide any needed and current hard data — which helps narrow a long list of candidate communities down to a short list — it’s also true that the data and corresponding conclusions are then parked for a bit while the more human side of site selection takes the lead. I believe this change is occurring for two reasons. First, nobody actually knows what the heck is going on with our current and future workforce. Second, as we head into a projected economic slowdown, the always-present desire to avoid risk is growing in intensity.

You and your peers are more regularly making space in the process to fully vet finalist locations with the hope that this extra time will help alleviate risk. In addition, those of you responsible for the site selection decisions for multiple operations have seen how much more unpredictable state and local approval processes have become. My guess is that this is a result of the increased political polarity that runs through our entire country. Even the communities with solid economic development track records and a history of success are facing unexpected timing delays, and even unexpected outcomes, after robust and sometimes volatile public meetings.

Importance of the Human Part
I’m speaking in generalities, of course. It isn’t that personal relationships stopped mattering or that real estate professionals and their peers stopped wanting to know how other employers were faring with their own hiring experiences. But like everything, it’s a pendulum that swings back and forth. Right now, the human part of site selection work is of paramount importance.

I’d like to thank you for allowing us site selection consultants to spend a little more time doing direct due diligence so that we can meet our shared objective of finding locations that mitigate risk and maximize success.

I hope our friends in the public/quasi-public sector economic development agencies are listening. The most successful communities that tout the biggest wins are those that can anticipate our questions before they’re asked — and that can provide a mix of qualitative and quantitative data resulting in enough comfort to make a location decision.

In the meantime, I think we can all coalesce around a shared desire to never return to hard-copy RFP responses that are faxed and snail-mailed!


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