PROJECT CASE  

	Availability of accountants, accounting clerks, and well-qualified entry level clerical workers
	Wage levels below the U.S. average
	Nonstop air service to Washington, DC
	Availability of a 50,000 SF office building
	Presence of a university and two year college with a substantial number of annual graduates in accounting
	State-of-the-art telecommunications infrastructure
	Low risk of natural disaster
	Favorable tax environment, including no taxation of accounts receivable
	Absence of future labor supply/cost pressure
	Attractive quality of life, including below average cost of living, to enhance relocation of about 20 professionals

WDG Consulting initiated the location selection project by requesting a profile of the new business’ operating requirements. We then met with the client team to finalize informational building blocks and reach agreement on the relative importance of various location criteria. A two phase analytical process was then followed to ultimately recommend the location which could best satisfy the overaching needs of the new shared services center.

The objective in Phase One was to identify the three most promising locations to carry forward for a due diligence evaluation. WDG Consulting began the search procedure by focusing on all metro areas over 100,000 population with nonstop air service to Washington, DC.

We subsequently interjected additional criteria to reject areas until a long list of 10 places emerged. Early stage criteria utilized to eliminate potential locations included the following:

	Population characteristics
	Workforce educational attainment
	Civilian workforce trends
	Unemployment rate
	Financial services employment (over concentration is not desirable as this construes higher wages and intense labor market competition)
	Number of accountants and accounting clerks (prefer at least 5:1 ratio of resident skills vs. open positions)
	Median accountant and accounting clerk salaries
	Taxation of accounts receivables
	Natural disaster risk (earthquakes, floods, severe storms)
	Quality of life ranking
	Cost of living index
	Points of presence (switches) of the major long-distance carriers

Until this juncture, WDG Consulting relied on its national database containing uniform locational statistics for all U.S. metro areas. This was supplemented by accessing published data sources (e.g., U.S. Bureau of Labor Statistics, demographic vendors like Claritas, and specialized sources such as ESRI for disaster risk).

For the 10 longlisted areas, WDG Consulting secured more customized information from our state and local economic development contacts. In particular, we were looking for clues as to the competitive labor market environment. The following variables were used to further distinguish the 10 semi-finalist areas.

Roster of financial services firms and other companies with significant back office operations

	New/expanding white collar employers
	Downsizing white collar employers
	Nature of white collar firms looking to establish operations in the area
	Annual number of accounting graduates Four-year colleges Two-year colleges
	Availability of and gross lease rates for 50,000 SF office space
	Air travel time and cost to Washington and other gateway cities
	Tax practices/rates
	Possible incentives
	Local wage surveys

Each location was ranked based upon WDG Consulting’s factor weighting/area scoring model. This led to selection of three metro areas (in Tennessee, Florida, and Kansas) to study in a second phase.

During Phase Two, WDG Consulting visited the three finalist locations. Our field studies consisted of the following:

	Interviews with back office employers including shared services centers
	Interviews with other pertinent entities such as business associations, personnel agencies, job service, education/training representatives, telecommunications officials, tax officials, real estate brokers/developers, and economic development groups
	Physical tours of office space meeting stated criteria
	Creation of commute zone maps plotting residential skillsets and location of labor market competitors to determine the best geographic sector of each area from a workforce perspective
	Estimation of qualified applicant flow at competitive salary levels (WDG Consulting recommended a 60th percentile position)
	Determination of the ingredients (compensation, HR practices, career advancement, on-site amenities, etc.) that would make Marriott an employer of choice
	Request of the lead economic development agency to submit a formal incentives package

Outcome of Phase Two research was interpreted from the vantage point of the shared services center’s most important operating requirements. The three areas were contrasted on short-range and longer-term attractiveness for the following considerations:

	Labor market Availability Quality Stability Salaries
	Business costs (multi-year) Payroll Occupancy Taxes Travel Incentives (offset)
	Keys to employer of choice status
	Office space Shortlist Recommended Best alternatives
	Quality of life/transferee appeal
	Education/training
	Unionization
	Telecommunications
	Air services
	Taxation

Upon submission of the report, Marriott decided to locate the shared services center in Knoxville (TN) - - WDG Consulting’s top choice. The firm has enjoyed considerable success in Knoxville as evidenced by:

	Company doubled headcount in last 5 years
	Abundant supply of accountants, accounting clerks, and other skillsets (qualified applicant flow ratios have exceeded 5:1)
	Low turnover (less than 20%)
	Customized training provided by the local community college
	Relatively short commutes for employees (75% less than 20 minutes) by virtue of the office’s location, enhancing recruitment/retention
	Wage rates some 15% less than national averages
	Minimal labor supply/cost pressure
	Extra savings generated by a $5 million incentives package

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