Location, location, location

Setting
up business in the latest hot-spot should be one way of securing the talent you
need. But choosing the next ‘in’ place may not be so easy. Bo Kremer-Jones
reports

One of the most famous quotes to come out of the business world is probably
that uttered by Conrad Hilton: "Location, location, location". Although
for him that was the maxim for the success of his eponymous hotel chain, those
three words also sum up what is one of the most important decisions businesses
have to take today.

For Hilton, that phrase was about ensuring you are in the optimal place to
attract customers away from other lodgings. For business today, it is still
important to be in the right place for your customers, but there’s more to it
than that.

As the so-called war for talent continues to rage, there is a new, flip side
to the location decision. Today, it is equally as significant to be in the best
place to attract the people your business needs; top talent, high performers,
specialists in your core business – basically, the people who will make the
difference to your organisation.

Over the past few years, specific locations have risen as preferred places
to work. Places where, as Mike Johnson, author of How to become a talent magnet
– getting talented people to work for you (Pearson Education 2002), says:
"Employees can easily establish themselves and create the work-life
balance that meets their current criteria of needs. If firms don’t track where
talent is going and move with them, then they may face difficulty in getting
the people they need for the future.

So where are those places?

Jacques Bouwens, principal of executive search firm Russell Reynolds in
Amsterdam, says: "Candidates don’t look so much at countries as they do at
cities. Take Groningen for example, a small, obscure town in the north of the
Netherlands, it’s not on anybody’s radar screen."

Candidates coming from further afield may not consider more well-know
European towns and cities. "If you are from New York and you are given the
choice of Amsterdam and Eindhoven, you’d choose Amsterdam because you’ve probably
never heard of Eindhoven," says Bouwens – although in Europe, it is very
much on the European map of business locations.

"People want to be in the brighter and bigger towns such as Geneva,
Brussels, Amsterdam and Paris," Bouwens says. "They are unlikely to
want to go to places like Basal, Dortmund, Liege and other less well known
towns."

Johnson adds: "Hot cities are drawing hot talent, creating a real
renaissance. For example, a gentle curve on a map from Barcelona, across
southern France, northern Italy, Switzerland and southern Germany already
boasts the highest capita income level in the world." If companies don’t
move to where the talent is swarming they are going to have great difficulty in
getting the people they need," he cautions.

Johnson would also list Amsterdam, Brussels, London and Zurich as preferred
places to live. In addition, he believes that Nice, Berlin, Milan and Dublin
should be considered as hotbeds for talent. He gives a sneak preview into the
potential new attractive places of the future. A couple of places to watch, he
says are:

– Barcelona is setting itself up to be another talent trap. The lifestyle is
good and – compared to other parts of Europe, relatively inexpensive. There are
lots of local talented people who speak good English and French and want a
challenge and some excitement.

– There is more to Marbella than German retirees and resting bank robbers. A
vibrant young international set is creating new companies and beginning to put
it on the map as more than an upmarket vacation spot. The local mayor sees it
as a European Florida. Air connections are improving all the time.

– Marseilles is less than two hours from Paris, the region around the major
port could be set for a new future. However, its Frenchness may hold it back.

– Antwerp is Europe’s second seaport after Rotterdam, but is very
international in its outlook and is a creative centre as well as home to
hundreds of high-tech companies. It can be more fun to live there than Brussels
(20 miles away) and property prices are some of the lowest in Europe. The
natives are friendly and all the business executives are quadri-lingual. But
make sure you personal tax situation is satisfactory.

Unlike Bouwens, Johnson thinks that Paris should be ranked more as an
undesirable location. "On the surface, it may be appealing, but it should
be given much closer scrutiny," he says.

From the employee perspective, says Johnson: "Paris, like Marseilles,
is one thing: French. Unlike London, it isn’t a cosmopolitan city and you need
to speak French to survive." And from the employer perspective, he says:
"It doesn’t have a lot of talent that is very international. Companies I
know have suffered in Paris and they have problems getting people to work
there."

Another good reason to avoid France, is the recently adopted 35-hour week; a
restrictive piece of legislation that came into force in 2000 (for companies
with more than 20 employees and from 1 January 2002 for others).

France also has a raft of employment regulations that firms that operate
there have to comply with, while also keeping unions happy. Germany faces
similar obstacles, says Rex Friedman, HR director with a pharmaceutical firm.
"The need to gain co-determination from works councils on major projects
in Germany impedes progress," he says. And in Sweden, he says high
employment costs are a drawback.

Friedman believes some countries are easier to operate from than others.
"The Benelux has strong language skills; in the UK people tend to have
lower salary expectations and Italy has shown improved employee retention
periods recently."

The Benelux scored high on many people’s list as a desirable place to base a
company. In her top three, Sophie Moens, founder of To Enable Business
Efficiency, placed Belgium as number one and the Netherlands as third.
"Belgium for its central location, being used to multiple cultures
business-wise and attractive to live in by expats," she explains.
"The cost of living however is very high, but so are wages," she counters.
Moens says The Netherlands is "very interesting tax-wise. And natives have
a good knowledge of English." There are downsides though: "small and
difficult to find housing and low on culture and food ".

Second on Moens list is Switzerland: "It is interesting to live in,
used to several cultures, high cost of living yet it is very interesting
tax-wise for industry."

Karine Becker, director of research with Transearch, a global executive
search specialist, agrees that Belgium and Holland would be among the top three
choices to locate a business. "Belgium is central, with a very
well-educated, multi-lingual workforce, and a high standard of living. Holland
is similar, although the standard of living is less high," she says.

Based in Amsterdam, Geert Schlegel, an independent tax adviser, considers
the Benelux to be an advantageous location for expats – although be believes
Denmark is better. "They get a 30 per cent salary advantage over the
locals," he says. "Germany is not good as expats are taxed like the locals.
Switzerland is good but there are high costs. France, says Schlegel, is nothing
special. As is the UK, he says. "However, the taxes are lower, which is an
advantage." Counter-balancing that, he says, the cost of living in London
can be very high.

Schlegel advises: "You have to look at the net income and what you have
to earn to maintain your lifestyle."

Research by HR consultancy William M Mercer supports Schlegel’s view. Its
2001 worldwide cost of living survey places London, Copenhagen and Paris as the
most expensive cities to live in the EU.

Rehan Mustafa, researcher at William M Mercer, says: "London has moved
out of the top 10 world ranking this year – changing to joint twelfth from
tenth position last year. Yet it still continues to be the most expensive city
in the EU.

"Compared to many other European cities, the cost of accommodation in
London is significantly higher. Transport is also expensive."

At the other end of the scale, Mustafa says: "Lisbon, in 118th
position, has the cheapest living costs in the EU. Madrid and Barcelona are
marginally more expensive. Expenses such as transport, food, drink and clothing
are particularly well priced in Spain and Portugal."

Where an expat chooses to live depends on their marital status, whether they
have children and other interests such as the need for cultural experiences.
Russell Reynolds’ Bouwens says: "The expat goes for the job and the wife
picks the town – in most cases, the person moving is still male. He has to look
at the environment for the family and this depends on his and his partner’s
age, the age of their children and so on. For dual-career couples, the ability
for the partner to find a job is also important."

Bouwens says that expats with families tend to migrate toward smaller, safer
cities such as Brussels and Copenhagen. Singles tend to want to be in places
where there is lots going on, such as Amsterdam or Paris. And their choice has
a lot to do with the values of the individual or family.

"Germany is a cultural desert. You don’t associate Germany with
culture. It may be a perception, but it’s true," he says.

The quality of life in different locations is also the topic of research by
William M Mercer. The aim of its Quality of Life survey it says is "to
provide an objective, consistent and comprehensive evaluation of the
differences in quality of life in any two cities. The information is then used
by governments and major companies worldwide to determine appropriate
allowances that reflect differences in the quality of life for personnel transferred
abroad."

The 2002 Quality of Life survey found that: "In the EU, Helsinki is the
cleanest capital, while Athens and London score lowest." Slagin Parakatil,
researcher at William M Mercer, says cities such as Paris, Rome and London are
sprawling with public transport problems and severe traffic congestion –
producing a detrimental effect on air quality. Waste disposal systems are also
under pressure from the cities’ dense populations, making them less efficient
than in other EU cities.

"In Athens, air pollution has been identified as causing respiratory
illnesses and restrictions have been imposed on car usage to alleviate the
problem," he says.

William M Mercer’s analysis is based on, "39 quality of life criteria
for each city including political, social, economic and environmental factors,
personal safety and health, education, transport and other public
services." Based on these factors, the consultancy says: "The top
place for overall quality of life is Zurich."

You can look – but will you find that elusive top talent?

As a firm you could spend thousands
of dollars on finding out where the talent you want hangs out. You can
investigate their lifestyles, their preferences and their skills and you can
move to where they want to be. But does that mean you will find them? Maybe.
For the young, single, career-driven talent – they may well be there. But the
married, dual-career type, may only want to be there during the week.

Mike Johnson, author of How to become a talent magnet: getting
talented people to work for you, (Pearson Education 2002), says: "Even
executives who years ago signed an agreement with their firm that they were
mobile now demure when it comes to actually doing it. Everyone from top
managers to newly-married junior executives look very closely at the
suggestion.

"Usually it is because the spouse has a job that they are
not willing to leave, but there can be other factors such as children reaching
a critical moment at school, ageing parents or the fact that they have a great
life – outside of work – where they are living."

Johnson adds: "Today a lot of managers would rather
commute Monday to Friday than uproot the whole family. Where once there was no
question about relocating, now there are other options."

Websites

www.wmmercer.com

www.towers.com

www.russellreynolds.com

www.transearch.com

www.watsonwyatt.com

www.hewitt.com

www.escapeartist.com

www.finfacts.iew

www.invest.uk.com

Comments are closed.