CBRE Labor Analytics Understanding your Workforce ... · CBRE Labor Analytics SERVICES OVERVIEW Some Benefits of an Optimal Labor Market • Operating Cost Reduction – Labor Costs

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CBRE Labor Analytics

Understanding your Workforce –Preparing Your Community for a Consultant’s Visit

© 2014 CBRE | CONFIDENTIAL & PROPRIETARY | Page 1

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1. Before we start - Some things to ponder…

2. How we do site selection – An overview of our process

3. First Contact - Requests For Information

4. The Community Visit – How to make it a ‘home run’

5. Question and Answer session


1. Before we start - Some things to ponder…

2. How we do site selection – An overview of our process

3. First Contact - Requests For Information

4. The Community Visit – How to make it a ‘home run’

5. Question and Answer session

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#187InformationWeek

500 mostinnovative usesof technology

#187InformationWeek


80%Labor portion ofmost occupier

operating costs


operating costs

2xCoreNet Global

Innovator’sAward Winner

2xCoreNet Global


WHAT WEDO

Workforce and location strategies for occupier locations: Optimized site selection for access to talent and cost savings Portfolio strategy development for existing locations by skill M&A analysis – balancing legacy and acquired site talent and costs Risk and sensitivity analysis for market scalability and saturation

RESULTS800+Consulting

projects since1995

800+Consulting

projects since1995

$467MRecent projectedsavings for M&A

project


project

$500MRecent projected

portfoliooptimization

savings



savings


#187InformationWeek


#187InformationWeek



operating costs


operating costs

2xCoreNet Global


2xCoreNet Global


OUREXPERTS

RESULTS800+Consulting

projects since1995

800+Consulting

projects since1995


project


project



savings



savings

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Financial Healthcare Technology BPO Industrial

34% of Fortune 100 | 25% of Fortune 500 | 90% Repeat Clientele


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Greenfield Site Selection• Location analysis• Community tours• Economic incentives• Real estate negotiation


Greenfield Site Selection• Location analysis• Community tours• Economic incentives• Real estate negotiation

Research/Subscription• Global LaborView• Client Portal• Scheduled analysis

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Labor often makes up 80% ofoperating costs

For office and back office operations, alocation’s workforce is the key driver ofoperational cost & performance

Two ways to save $1 millionbased on 500 employees @ 125 SF ea.)

Labor72%

RealEstate12%

OtherOperatingExpenses

16%


Labor72%

RealEstate12%

OtherOperatingExpenses

16%

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Market Tier I II IIISkill LevelJob ExperienceSalary RangeEducationEmployment Capacity

SpecializedMid-late career$80,000+Bachelors degree+Greater than 1,000

Professional3-7 years$35,000 - $80,000Associates – Bachelors500 – 1,000

Basic0-3 yearsBelow $35,000High School – AssociatesLess than 500

Opportunities

Risks

• Broad skill base• Scalability• Accessibility• QOL

• High labor costs• Strong employment

competition• High turnover

• Good skill/cost balance• Lower cost• Less competitive

• Fewer highly specializedskills

• More competitive forbasic skills

• Lowest labor costs• Least competitive• "Employer of Choice"

status

• Limited scalability• Limited skill base• Less accessible

Increased Skill AvailabilityIncreased Skill Availability


Opportunities

Risks

• Broad skill base• Scalability• Accessibility• QOL

• High labor costs• Strong employment

competition• High turnover

• Good skill/cost balance• Lower cost• Less competitive

• Fewer highly specializedskills

• More competitive forbasic skills

• Lowest labor costs• Least competitive• "Employer of Choice"

status

• Limited scalability• Limited skill base• Less accessible

Corporate Functions Information TechnologyResearch & DevelopmentSenior Management

Finance & AccountingComplex TransactionalProcessing

Back-Office ProcessingCustomer Service

Sample Markets Atlanta, GADallas-Fort Worth, TXCharlotte, NC

Austin, TXDes Moines, IAColumbus, OH

Muncie, INTwin Falls, IDPensacola, FL

Lower Labor Costs & CompetitionLower Labor Costs & Competition

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• Operating Cost Reduction– Labor Costs make up 70% - 80% of overall operating costs

• Turnover reduction– Markets with less employment competition help keep turnover and payroll costs low

• “Employer of Choice” Status– Markets that lack strong corporate presence or jobs offering benefits and career

paths give corporate users a distinct hiring advantage– Substantially lower turnover– Higher quality workforce

• Specialized skills– Ability to source specific skill requirements (i.e. Technical Sales, F&A, complex

processing, information technology, healthcare, etc.)


• Operating Cost Reduction– Labor Costs make up 70% - 80% of overall operating costs

• Turnover reduction– Markets with less employment competition help keep turnover and payroll costs low

• “Employer of Choice” Status– Markets that lack strong corporate presence or jobs offering benefits and career

paths give corporate users a distinct hiring advantage– Substantially lower turnover– Higher quality workforce

• Specialized skills– Ability to source specific skill requirements (i.e. Technical Sales, F&A, complex

processing, information technology, healthcare, etc.)

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2-4 WEEKS1 WEEK3 WEEKS2 WEEKS2-3 DAYS

PHASE I – SITE SELECTIONPHASE I – SITE SELECTION PHASE IIPHASE II

MARKET TOURSFINAL ANALYSISPRIMARYRESEARCH

STATISTICALANALYSIS

CLIENTDIAGNOSTICS

Site Selection: Process & Methodology

Concise executivereporting andrecommendations

Overlay qualitativeresearch to validatemarket viability

Intelligent interpretationof data for comparabilityacross markets

Project objectives, datafields, criteria andtimeline set; Geographicarea defined

Final location selected


Assemble project team

Complete project profilequestionnaire

Develop demographicprofile

Refine project schedule

Construct BenchmarkAnalysis ModelCreates national indicesand compares over3,800 markets acrossthe US

Stack rank markets bydemographiccompatibility

Filter out poorly rankedmarkets

Diligent verification ofmarkets by LAGconsultants & analysts

Competitor Analysis• Identify competing

employers• Conduct wage

surveys

Saturation analysis

Local interviews• Employers• Economic

development• Employment agencies

Site SelectionOptimization ModelStack-rank finalistmarkets based on finallocation criteria

LaborPlan™Workforce longevityanalysis to model andassess risk surroundingscalability, cost andlongevity

Develop Market TourScorecards to evaluate:• Labor skills/cost• Competition• Real estate viability• Economic incentive

environment

Coordinate markettours in shortlistmarkets:• Meet with economic

investment agencies• Tour local schools• Interview staffing

agencies• Interview competition• Tour real estate

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• Select locations aligned with labor needs– Quality: Skill set & occupational requirements, education levels, language– Availability: Labor force, unemployment, market growth– Cost: Competitor wages, average market wages for skill set

•Skill sets•Education levels•Operation size•Experience•Licensing•Training

•Skill sets•Education levels•Operation size•Experience•Licensing•Training

•Starting wage•Benefits•Cost of living•Incentives•Taxes•Unions

•Starting wage•Benefits•Cost of living•Incentives•Taxes•Unions

•Market size•Region preference•States•Time zones•Accessibility•Accents•Weather

•Market size•Region preference•States•Time zones•Accessibility•Accents•Weather


Labor Cost Geography

•Timeline•Square feet•Parking ratio•Lease vs. own•Existing vs. new•Plug ‘n Play•Amenities

•Timeline•Square feet•Parking ratio•Lease vs. own•Existing vs. new•Plug ‘n Play•Amenities

Facility/Site

•Local competitors•Wage rates•Saturation levels•Industry presence

•Local competitors•Wage rates•Saturation levels•Industry presence

Competition

•Scalability•Future Risk•Home Agent

•Scalability•Future Risk•Home Agent

Additional

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• Translating requirements to data

Project Profile

Supply/Availability:• College educated• Availability of technology talent• Availability of sales talent• Near local universities

Costs:• Wages lower than existing• Affordable home values• Household income levels• Cost of living

Business Environment:• Union presence• Relocation attractiveness• Weather conditions• Ease of access

Sample profile (weightingsand data to be adjusted forexact requirement) Over1,500 data points tocustomize


Supply/Availability:• College educated• Availability of technology talent• Availability of sales talent• Near local universities

Costs:• Wages lower than existing• Affordable home values• Household income levels• Cost of living

Business Environment:• Union presence• Relocation attractiveness• Weather conditions• Ease of access

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• Using profiles to evaluate potential locations

Demographic Benchmark Modelling


Final documentation provides clear analytics as to potential locations as well asdocumenting why certain locations have been removed from consideration

Using the customized demographic profile, we evaluate over 6,768 cities and 942 metropolitan areas across theUS to find the best balance of talent, education and costs for short list consideration

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• Narrowing potential locations through market intelligence

Primary research

Interviews are critical in mitigating risk.

Though interviews, intelligence can be gathered on:• Quality of workforce• Work ethic• Current market activity• Ease of hiring• Preferred employers• Presence of specific skills or experience levels


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• Evaluating competitive presence

Competitive analysis

Understanding competitive presence,positioning and saturation is critical inselecting an optimal location

LAG maintains records on more than 9,240operations across the US, evaluating size, wage,operation types, skills and location by geography.


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• Evaluating educational attainment and pipeline

Education Analysis

Availability of specific graduates andenrollment by program, level and schoolis instrumental in understanding theability to support future workforcedemands

LAG maintains records on more than 4,690institutions and 403 degree programs, as well asexisting attainment levels by location


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• Evaluating market sustainability through LaborPlan™

Longevity Analysis

LaborPlan™ is essential inunderstanding the long termviability and success of anoperation

Labor Analytics evaluates thescalability and longevity of a labormarket through proprietary supply &demand modeling


2007 Winner

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Labor Cost Analysis


Once the quality, talent and supplyof labor have been verified,additional cost analysis can beperformed to estimate potentialsavings

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Financial analysis


Expanded financial analysis canalso be modeled to include allareas of investment and return.

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Final recommendationsFinal analytics incorporate allareas of analysis for a finalscore card ofrecommendations and breakdown of strengths andweaknesses by market.


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2014

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Global LaborView


Global LaborView

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sets, wagesDiscover trends, patterns, outliers and opportunities


Financial AnalystEmployment Density vs.Wage

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FIRST CONTACT:REQUESTS FOR INFORMATION


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EDCs spend a lot of money, resources, and effort toattract companies. Site Selection Consultants bringprospects right to your door.


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By the time a consultant reaches out to you, they havelikely vetted through 1,000s of communities and youare already part of their medium list


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Making the medium list is a great thing,but ultimately, you want to make it tothe short list of communities thatreceive community tours

Medium List (20 markets)

Short List (8 markets)

Final List for Tours (2-3 markets)


Medium List (20 markets)

Short List (8 markets)

Final List for Tours (2-3 markets)

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Financial Healthcare Technology BPO Industrial

34% of Fortune 100 | 25% of Fortune 500 | 90% Repeat Clientele


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• There are a lot of ways to gather market intelligence. Working witheconomic development groups is one of the methods that siteselection consultants use to efficiently gather information.

• By the time we send you an R.F.I:

We are working on verifying the data we already have,

or

We may already be convinced your community can work and aretrying to build a case that supports your labor market.

• The point is, we are already far down the path when we contact you.


• There are a lot of ways to gather market intelligence. Working witheconomic development groups is one of the methods that siteselection consultants use to efficiently gather information.

• By the time we send you an R.F.I:

We are working on verifying the data we already have,

or

We may already be convinced your community can work and aretrying to build a case that supports your labor market.

• The point is, we are already far down the path when we contact you.

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Beyond the statistics, site selection islike solving a murder mystery novel.

We are looking for the smoking gunwith the fingerprints that solves‘whodunit’ or in other words, “yes,here’s evidence that the labor marketcan work!”


Beyond the statistics, site selection islike solving a murder mystery novel.

We are looking for the smoking gunwith the fingerprints that solves‘whodunit’ or in other words, “yes,here’s evidence that the labor marketcan work!”

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COMMUNITY TOURSHow to Give Yourself the Best Chance to Win


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These are the things you should know about and ask theconsultant, pre-visit:

1. What industry is the client in?

2. What is important to the client?

3. What are potential deal breakers?

4. What is the client hoping to gain out of this meeting?

5. What doesn’t the client know?


These are the things you should know about and ask theconsultant, pre-visit:

1. What industry is the client in?

2. What is important to the client?

3. What are potential deal breakers?

4. What is the client hoping to gain out of this meeting?

5. What doesn’t the client know?

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– Can the client find the labor?– What are companies employing similar skill sets paying?– How much competition is there in the market?– Are other companies having a tough time hiring?– Talk to people (on the streets, a local community college class, people at the local

job center)

2. Meet with Community Leaders– How important is this?

• Often shown by who attends (mayor, city manager, governor?)– How strong are their capabilities?– How supportive will they be?

3. Get a look and feel for the community.– Does it match their corporate culture.

4. What incentives are available?

5. Are there suitable real estate options?© 2014 CBRE | CONFIDENTIAL & PROPRIETARY | Page 44

1. Validate the labor market– Can the client find the labor?– What are companies employing similar skill sets paying?– How much competition is there in the market?– Are other companies having a tough time hiring?– Talk to people (on the streets, a local community college class, people at the local

job center)

2. Meet with Community Leaders– How important is this?

• Often shown by who attends (mayor, city manager, governor?)– How strong are their capabilities?– How supportive will they be?

3. Get a look and feel for the community.– Does it match their corporate culture.

4. What incentives are available?

5. Are there suitable real estate options?

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1. DO show enthusiasm during the tour.

2. DO try and invite participants to the labor panel that like to talk (personable)

3. DO show the importance of the client’s business to your community

4. DO have government officials attending the meetings (e.g. mayor, city manager, governor)

5. Do make the client’s logistics easy as possible (airport pickup/drop-off, transportationbetween meetings)

6. DO have breakfast with the client and dinner the night before, whenever possible

7. DO invite knowledgeable peers to discuss their experiences for labor panels.o Action- and quantifiable reaction theory = smoking gun

8. When doing presentations about your community, DO make sure the materials are relevantto the client’s business model.

9. DO discuss your community’s weaknesses (in an appropriate manner).

10. If possible, DO create unique positive memorable experiences

11. DO show the client how the community will support their business.

12. DO round tables with college students. These have been a home run for clients.


The following list of items can often help to make the best impression with the client:

1. DO show enthusiasm during the tour.

2. DO try and invite participants to the labor panel that like to talk (personable)

3. DO show the importance of the client’s business to your community

4. DO have government officials attending the meetings (e.g. mayor, city manager, governor)

5. Do make the client’s logistics easy as possible (airport pickup/drop-off, transportationbetween meetings)

6. DO have breakfast with the client and dinner the night before, whenever possible

7. DO invite knowledgeable peers to discuss their experiences for labor panels.o Action- and quantifiable reaction theory = smoking gun

8. When doing presentations about your community, DO make sure the materials are relevantto the client’s business model.

9. DO discuss your community’s weaknesses (in an appropriate manner).

10. If possible, DO create unique positive memorable experiences

11. DO show the client how the community will support their business.

12. DO round tables with college students. These have been a home run for clients.

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QUESTION & ANSWER PERIOD

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www.cbre.com/lag

Mark SeeleySenior Managing Director

[email protected]

For more information, please contact:

James J. TrobaughSenior Vice President

[email protected]


Documents

CBRE Labor Analytics Understanding your Workforce ... · CBRE Labor Analytics SERVICES OVERVIEW Some Benefits of an Optimal Labor Market • Operating Cost Reduction – Labor Costs