Cost Of Living As A Factor In Business Relocation
Topics: Business Relocation, relocate, quality of life, living, relocating
According to the United States Census Bureau, 40 million Americans move each year. There are no hard statistics on the number of businesses that relocate, but there is a growing trend towards businesses relocating outside of major metropolitan areas to cut costs for themselves and their employees.
There are five main reasons why companies decide to relocate, according to economic development researchers. They are: access to a quality labor pool, the need to upgrade facilities or equipment, the need to reach new markets, the wish to lower costs and overhead and finally, quality of life issues.
It is this last item that affects employees most directly. Cost of living has a large impact on the quality of life for the average American. For example, the cost of living in Springfield, Missouri is estimated to be just 60% of the national average. Compare that to a large metropolitan area like Miami where it costs 113% more that the national average. Larger cities like New York, Boston and Los Angeles are almost off the map compared to the national average.
Quality of life isn’t just about money, either. Commuting time and costs in larger metropolitan areas can seriously affect the mood and morale of workers as well as lead to lower productivity over time. The cost of housing can also affect the ability of companies to attract and retain quality employees. For example, some employers in Palm Beach County, Florida, where the median home price is over $450,000 have had trouble recently in recruiting employees from out of state.
However, when businesses consider relocating to less expensive, less congested areas of the country they have to consider access to a quality labor pool. There are many cities in the Midwest and South that are large enough to support a corporate headquarters, but often do not have the highly trained workforce that is required. Community colleges and local workforce development agencies are working to correct this imbalance but it may be many years before skilled labor is available in many of those places.
There are certain cities that have thrived due to their combination of both high quality of life and available skilled workforce including Austin, TX, San Antonio, TX; Orlando, FL; and Nashua, NH. These cities continue to grown economically while larger cities such as New York, Boston and Los Angeles continue to lose businesses to either the suburbs or smaller cities.
Jonathon Hardcastle writes articles for businessworldnow.net – In addition, Jonathon also writes articles for irealestatecentral.com and thebusinessbuzz.net
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