How can Human Resources impact Corporate Site Selection?Oliver LawfordProduct Manager, EMSI

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Goals

1. Give you a framework to understand human capital issues within site selection process

2. Begin to show you how to apply strategic human capital data to influence site selections decisions.

Why is this important?

Reason One

New site selection or relocation are vital to business strategy.

-Technological Advances

-Human Capital Requirements

-New Products or Services

-New Markets

-New Distribution channels or suppliers

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Why is this important?

Reason Two

Site Selection decisions are expensive, complicated, time consuming and hard to correct.

Why is this important?

Reason Three

In general, the most important site selection criteria are human capital issues.

Availability of skilled labor (1st)

Cost of labor (3rd)

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"With organizations now focused on...entering new geographic markets,

human resources must arm its business leadership with the labor market essentials.

The right information can position a company in geographic locations where they

can improve their odds of success."

How does this affect HR?This is a perfect opportunity for HR and Talent Acquisition to have a significant impact on business outcomes.

Not just focused on operation efficiency.

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Site Selection Process

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Process

Phase Zero

Be aware of the overarching business strategy over the next five years.

Process

Phase One

Determine which criteria your business cares about and how much. These might include:

─ Workforce Requirements─ Land Requirements─ Customer Proximity─ Utility Costs─ Cost of Living─ Communications and Infrastructure

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Process

Phase Two

Choose a particular location that best meets business needs. Keep 1-2 backup locations available.

Consult real estate advisory services, or real estate databases

Solicit information from communities regarding incentives (type, value and duration)

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Process

Phase Three

Negotiation and final selection.

Brinksmanship!

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Business Criteria

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Business Criteria

What does a company like Tesla care about when building a Gigafactory?

1. Transport

2. Services

3. Finance

4. Workforce

5. Other

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Transport Environment

Proximity to road and rail is a high priority in order to transport batteries back to California for final assembly

Proximity to water (medium)

Commute times (medium)

Proximity to major airport (low)

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Services Environment

Utility requirements are a high priority considering the size of the factory (5-10 million square feet; largest battery factory in the world)

Land requirements (medium high)

Telecommunications (medium)

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Financial Environment

Incentives

Taxes

Cost of living

Construction costs

The importance of incentives are often hard to quantify before a decision is made. Some companies are clear as to there importance, like Tesla.

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Other

Quality of living (medium high)

Proximity to training/schools (medium)

Competitor proximity (low)

Customer proximity (low)

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Workforce

Availability and cost of labor (high)

Workforce Demographics (diversity)

Labor Unionization (cost issue)

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So where did Tesla go?

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Motivating factors

$1.25 billion incentive package with the state of Nevada (10th biggest in US history)

Quality of living (proximity to Lake Tahoe, mountains etc.)

Growing technology presence (Microsoft, Apple, Intuit, Ashima)

Zero Corporate Income Tax

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?

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Let’s apply some data

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Simple Process

Industries

Staffing Patterns

Individual Occupations

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Industries

By focusing on your industry (or closely aligned industries) you are able to identify the existing workforce with closely matched skills and experience.

What is Tesla’s industry?

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Tesla’s Industry

If Tesla moved to recruit existing workers in their industry they should have moved to somewhere like…

Missouri (7.81) or Kansas (7.77) or Kentucky (3.94)

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Other Industries

Other closely aligned industries present compatible talent pools. Tesla could recruit from industries like Motor Vehicle Electrical and Electronic Equipment Manufacturers.

Those jobs are predominantly in the Midwest or Southeast.

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Simple Framework

Industries

Staffing Patterns

Individual Occupations

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Staffing Patterns

Using Staffing patterns we can identify the jobs which drive a particular industry.

Then we can identify whether they exist in

other industries.

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Staffing Patterns

Machine Setters, Material Movers, Team Assemblers, Maintenance Workers, General Managers, Electrical Equipment

Assemblers, Inspectors, Machinists, Electrical Engineers, Customer

Service Representatives, Industrial Engineers, Cutting/Punching Machine Setters, Shipping Clerks

Top 10 Jobs (CA)

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Description 2014 Jobs2014 - 2019 % Change

2014 - 2019 Change

Maintenance and Repair Workers, General 123,527 6% 7,709

First-Line Supervisors of Production and Operating Workers 53,581 (2%) (809)

Electrical and Electronic Equipment Assemblers 30,022 (2%) (554)

Team Assemblers 88,116 (1%) (1,054)

Extruding and Drawing Machine Setters, Operators, and Tenders, Metal and Plastic 4,977 (9%) (439)

Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 10,155 (11%) (1,119)

Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic 5,567 (7%) (365)

Inspectors, Testers, Sorters, Samplers, and Weighers 51,021 3% 1,508

Production Workers, All Other 20,569 4% 917

Laborers and Freight, Stock, and Material Movers, Hand 294,479 6% 18,722

682,014 4% 24,516

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Top 10 Jobs (TX)Description 2014 Jobs

2014 - 2019 % Change

2014 - 2019 Change

Maintenance and Repair Workers, General 112,020 9% 9,838

First-Line Supervisors of Production and Operating Workers 47,914 4% 2,151

Electrical and Electronic Equipment Assemblers 17,756 2% 312

Team Assemblers 65,098 8% 5,074

Extruding and Drawing Machine Setters, Operators, and Tenders, Metal and Plastic 5,330 (4%) (188)

Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 6,880 (6%) (401)

Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic 5,886 3% 178

Inspectors, Testers, Sorters, Samplers, and Weighers 45,254 7% 3,174

Production Workers, All Other 9,662 11% 1,104

Laborers and Freight, Stock, and Material Movers, Hand 203,921 8% 16,692

519,721 7% 37,935

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Top 10 Jobs (AZ)Description 2014 Jobs

2014 - 2019 % Change

2014 - 2019 Change

Maintenance and Repair Workers, General 23,913 1,553 6%

First-Line Supervisors of Production and Operating Workers 8,258 240 3%

Electrical and Electronic Equipment Assemblers 4,486 (113) (3%)

Team Assemblers 12,476 (475) (4%)

Extruding and Drawing Machine Setters, Operators, and Tenders, Metal and Plastic 559 (23) (4%)

Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 1,507 (148) (10%)

Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic 335 23 7%

Inspectors, Testers, Sorters, Samplers, and Weighers 7,775 418 5%

Production Workers, All Other 3,179 (184) (6%)

Laborers and Freight, Stock, and Material Movers, Hand 37,900 613 2%

100,389 1,904 2%

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Top 10 Jobs (NM)Description 2014 Jobs

2014 - 2019 % Change

2014 - 2019 Change

Maintenance and Repair Workers, General 7,772 6% 489

First-Line Supervisors of Production and Operating Workers 2,310 3% 60

Electrical and Electronic Equipment Assemblers 540 (0%) (1)

Team Assemblers 2,107 (1%) (13)

Extruding and Drawing Machine Setters, Operators, and Tenders, Metal and Plastic 56 0% 0

Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 363 (10%) (37)

Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic 68 6% 4

Inspectors, Testers, Sorters, Samplers, and Weighers 1,641 4% 69

Production Workers, All Other 1,140 (1%) (10)

Laborers and Freight, Stock, and Material Movers, Hand 8,675 5% 477

24,670 4% 1,040

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Top 10 Jobs (NV)Description 2014 Jobs

2014 - 2019 % Change

2014 - 2019 Change

Maintenance and Repair Workers, General 13,661 4% 513

First-Line Supervisors of Production and Operating Workers 2,666 7% 184

Electrical and Electronic Equipment Assemblers 658 4% 26

Team Assemblers 4,683 6% 264

Extruding and Drawing Machine Setters, Operators, and Tenders, Metal and Plastic 404 (3%) (14)

Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 308 3% 10

Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic 72 15% 11

Inspectors, Testers, Sorters, Samplers, and Weighers 2,278 9% 206

Production Workers, All Other 1,118 9% 106

Laborers and Freight, Stock, and Material Movers, Hand 19,349 7% 1,330

45,196 6% 2,635

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Simple Framework

Industries

Staffing Patterns

Individual Occupations

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Industrial Engineers

668 Industrial Engineers

67% below Average

8.5% projected growth

$76,000/annum

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Mechanical Engineers

580 Mechanical Engineers

75% below national average

9.8% projected growth

$73,000/annum

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So what are Tesla going to do?

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Migration Patterns

Tesla must leverage its proximity to other key states and attract workers with a propensity to migrate.

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Migration – All Jobs

Net gain in total jobs through migration (+5000)

Greatest in-migration for all jobs from California, Arizona, Texas, Washington, Utah, Florida and Colorado.

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Migration – Engineering

Greatest in-migration for engineering jobs from California, Washington, Arizona, Texas, Colorado, Georgia and Hawaii.

Overall net loss in engineering jobs

Focus on retention

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Thanks and Questions