Can you answer the question: why are we here? Not on an existential or philosophical level – this isn’t that type of blog – but on an organizational level. Why is our office/shop/smelting plant in this location?
At some point in your professional life, someone will ask this question. It may be a question of where we want to expand, or it could be an issue of offshoring a given function. Or, it could be a wholesale look at closing down your location entirely. A lot of jobs, your own included, are helped if you can make the case for staying put.
As an HR professional living in Connecticut, I already know that arguing for cost is going to be a sucker’s game. If you compare the fringed labor costs of making any given item in New Haven to the cost of making it in Juarez, Bangalore, or Shanghai, or even Raleigh, Mobile, or St. Louis, New Haven loses in a walk. Even in lower cost parts of the country, there will always be someplace cheaper to find labor. Keep looking for other advantages to your location:
- Talent Quality. The future of your business is premised on a lot of new, college educated talent coming to you, so Boston or New York are worth the price (interesting Connecticut note: ESPN headquarters is in the fairly small town of Bristol, CT, a place with no discernible nightlife. That young UCLA grad with a passion for sports quickly discovers that proximity to Hartford is really no substitute for the life he was used to!)
- Talent Quantity. Look at your competitors, suppliers, and vendors. There are definite logistics advantages to being close, but it also gives you a ready-made talent pool to poach source. Silicon Valley exists in part because it’s very easy to find people with the skill set and experience you need for your startup already living and working in the area. I’m pretty confident that Jason, in Redmond, doesn’t need to relocate nearly as many programmers as Dawn does in Birmingham.
- Work Quality. I once supported a US factory where one of our product lines was losing money with every single unit. The problem was that the customer on that line wouldn’t buy it if it was produced at our sister plant in Israel, and we couldn’t afford to sacrifice the customer. It took probably three years of convincing and testing before the outsourced work was inside of the customer’s tolerances. Your current workforce has already figured out how to deliver exactly the product the customer wants; your future workforce may not, or may not learn in time to keep your customers from shopping around.
- Huge, Dangerous Problems. There are many risks out there that don’t show up on a spreadsheet. Sure, boss, I know that we could save a lot on payroll by moving overseas. But:
- When our employees are upset, they complain, or maybe they unionize. They don’t make headlines by threatening mass suicide (side note: whenever you’re feeling like your HR job just isn’t fun, remember that you’re not the HR person who had to distribute and collect “no suicide” forms)
- You don’t need to provide armed guards and buses to get your employees to work.
- We have a much lower risk of introducing lead, hydrogen sulfide, contaminated heparin, or mildew to our products and employees by staying where we are.
So, why are we here? If you still can’t come up with a reason for keeping all of your employees here, work on your resume. Or, pack your bags. Or, start training your robot. Because sooner or later, you won’t be the only one who has noticed.
Steve Gifford, MBA, SPHR, is the Director of Human Resources for OEM America, a PEO of more than a hundred companies and more than two thousand employees. His company gives small businesses the buying power and HR expertise of a big company, but without the bureaucracy! In the past, he’s been the HR guy for marketing, manufacturing, retail, and government organizations. His first HR job was in the US Army during his second tour in Iraq, where every employee in his client group carried an automatic weapon. It helps him keep the problems of employees who show up to work late in perspective.