Nearshore Americas

Site Selection: Getting Good Labor Data

With the absence of census data and other reliable statistics in the Latin America and Caribbean region (CALA), there is significant difficulty in finding quantifiable information that is critical for site location consultants and corporate real estate directors to make location decisions. Information such as population, unemployment rates, underemployment rates and education factors, while occasionally available are most often not reliable. Labor Studies are becoming increasingly more important – especially as this geography grows to accommodate the demand for nearshore in this region.

Is the Location Prepared?

These studies are also beneficial as a pre-emptive approach to generate marketing for economic development and promotion agencies. They work to preclude exclusion by providing solid, research-based statistical facts that economic development professionals should have available in their tool box for the recruitment of new or expanding business. These tools are utilized for marketing, and as an “offensive measure” to site location consultants and corporate real estate professionals who may question whether an area has ample, well-qualified labor. Labor studies are also utilized to note any weaknesses in skills and what labor and workforce solutions need to be addressed in order for a city or country to be fully mobilized and prepared.

Information pertaining to labor specifics is also gathered, such as: unemployment; commuting patterns; willingness to change jobs or enter the workforce; occupation, skills and education levels; investigate the underemployed to include retired with a desire to re-enter the workforce and part-time workers seeking full-time employment. From these studies, it also becomes easier to identify and target industries suitable for recruitment efforts.

Deane Foote, President/CEO of Foote Consulting notes, “The site location consultant’s preliminary job is to determine why a community will NOT be on the final list. Labor studies provide a critical element of offense for an economic development promotion agency to establish why their community or region should stay on the list of initial options for a project from a labor perspective”.

Good Data is Critical

For site location consultants, the process of obtaining information for incentive and real estate proposals is quite confusing in CALA, as much of the labor analytics and demographic information that they are accustomed to receiving is not readily available or extremely antiquated. Data that has been analyzed by a reputable research organization is necessary to ensure that questions can be proactively answered with solid responses. The job of the economic development promotion agency should be to make certain there are answers to questions before they arise to prevent being eliminated – especially before being considered as a finalist for a project.

Susan Arledge, President/CEO of Arledge Partners Real Estate Group says:

“We are frequently requested by our BPO clients, who need a CALA presence in order to compete for contracts, to provide proposals on up-and-coming areas that will be the “next best thing” for nearshore work. It is often extremely difficult to obtain the analytical information our clients require for their proposals. For this reason, we have developed a database of information in these markets acquired from years of “on the ground” in-country experience. It would be beneficial to have information from economic development agencies to expedite the process even further. It has been our experience that the end-user clients are often reluctant to commit business to third party companies that do not have LATAM locations currently in place or at least firmly identified, so our strategy has been to generate a solid inventory of location options available for presentation to the client.”

Many other components come into play during a site location project, including the need for information including telecommunications, access to public transportation, natural disaster risks, ownership of real estate, availability of funds to complete tenant improvements; none of which is difficult to acquire in the United States or Canada, but much more difficult in CALA and the Caribbean.

Go Beyond Demographics

A “real life” site selection and business retention labor analysis must go far beyond a demographic overview. Consultants who specialize in these studies should have a broad range of research tools, data delivery systems and modalities. Statistical information is critical, but does not scratch the surface of the workforce issues that challenge companies. Of particular priority for the BPO company is the availability of quality bilingual labor.

A thorough and in-depth analysis of the existing and emerging workforce, current labor/management relations, and a skills and training gap analysis based on site selection data using a proven methodology, is essential. Resident survey data, expert opinions of area employers, and accurate demographic information should all be part of the research. It is important for consultants providing this research to conduct, at a minimum, in-country interviews with the following:

  • Human resource and training professionals from area employers;
  • Representatives from all spectrums of the education system,
  • Workforce development professionals,
  • Workforce or labor offices,
  • Both private and public English schools,
  • Government officials
  • Focus groups consisting of a sampling of the labor pool, comprised of various skills and demographics
  • Focus groups consisting of a sampling of the labor pool, comprised of various skills and demographics to determine US cultural affinity for US based clients.

A sampling of important questions to consider for a successful labor study project:

  • How will the study be utilized? Primarily as a marketing tool or to understand labor skills, availability, quality and cost or both?
  • What are the primary phases? Phases often include resident survey, focus groups and employer analysis.
  • How many labor sheds should be surveyed and how many completed surveys are required?
  • What labor sheds should be surveyed as a part of the resident survey?
  • For the resident survey, which is the best modality: land line or cell phone?
  • How many and which employers should be interviewed as part of the employer survey?
  • What other organizations need to be interviewed?
  • What is the timeframe?
  • What is the budget?

Having a valid, in-depth labor study report in the economic developer’s toolbox will assist promotion agencies in better understanding the strengths and weaknesses of the workforce by quantifying their market with solid, real data regarding the labor supply and its quality. It will provide a solid “offense” with real information necessary for site location projects. In many cases, the research will uncover potential expansion projects; hidden labor resources; and provide a roadmap of emerging employment trends which will assist the workforce and training agencies in better preparing labor for potential employment opportunities.

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Ann Harts is CEO and President of HartsGroup, Inc., in the Kansas City, KS area, a member of the 2010 Power Rankings and a frequent columnist for Nearshore Americas.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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