Location selection for headquarters & support office

Our team of experts has extensive experience in this field, with a deep understanding of global markets and local situations. We provide you with comprehensive location analyses and data and experience driven recommendations to help you identify the best locations for your business. Whether it is for front offices or back offices, we cover all office related projects: for headquarters or sales offices, for support centers (SSC’s, GBS, back-offices, BPO or call centers) legal support and tech centers (including software development and technical support). We do this around the globe, including EMEA, North America and LATAM, China and Asia-Pacific. 

In the current global environment, uncertainty is a given. Geopolitical turmoil, technological developments (e.g. robotization in back office environments), labor market challenges, new ways of working (working from Home vs Working from Office), tax climate changes, are having a huge impact on cost effectiveness, quality of the business environment and the risk profile of your current locations. We support you with a thorough fact-based location strategy and site selection analytics, no matter whether your project has a global scope or is focused on EMEA, North America, LATAM, China or Asia-Pacific.

We can support in two phases of your location selection process:

Scenario analysis

In this strategic phase we support you with defining and analyzing meaningful location scenarios in order to answer questions such as: can we expand at our current locations or should we set up a new location? What is the impact of working from home on our location strategy? How many new locations do we need? In what geographical area should we start selecting a new location and site/building?

In the scenario definition and analyses we take amongst others the following factors into account:

• Your company’s overall business strategy
• Future business projections
• External factors (e.g. economy, labor markets, geopolitical developments, legal and regulatory, climate, technology)

Based on a well-based quantitative and qualitative comparison of the different location scenarios the preferred scenario is selected and the next steps for your company are defined. These next steps may include a detailed location & site selection process.

Location & Site Selection

In order to select the optimal location for your company’s headquarters or support office we execute a step-wise filtering process.

The filtering from longlist to shortlist and final optimal location is very much fact-based and focuses on comparing locations from a Cost, Quality of the Business Environment and Risk perspective.

Once the shortlist of candidate locations is defined we start the fieldwork activities: conducting fieldwork visits to the top office locations in order to validate and enrich all desk research findings with actual insights from the field.

In addition to our location strategy and site selection projects we also help companies in:

• detailed labor market analyses, applying our proven IDEAL methodology (In-Depth Assessment of Labor Markets) to answer your questions regarding the feasibility of recruiting and retaining your required talent in current and / or new locations.

Our approach is a step-wise filtering process. After having detailed the specific profile of your new office project and the key location drivers, a first assessment of a longlist of locations takes place based on a set of critical location factors. Based on this assessment a shorter list of promising locations is selected which are analyzed using a detailed listing of cost, quality of the business environment and risk factors. Following from that last desk research step the most promising office locations are selected for fieldwork visits. During the fieldwork detailed discussion are held with local authorities, economic development agencies, recruitment experts, real estate companies, peer companies, and so on in order to come to the selection of the optimal location.

You probably have already some locations in mind at the start of your location selection process. But be prepared to be surprised, as we take not just the sites you come up with into consideration, but also potential locations that have a good score based on the criteria agreed upon. And that is the first step: in consultation with you we select the right criteria and weight of those criteria for your new headquarters or support center location selection.

In the matrix the costs of each candidate locations are presented on the vertical axis with the lowest cost on top and the highest on the bottom. The horizontal axis shows the weighted average quality scores per location and by color coding the risk profile of each location is indicated.

Example of what a site selection outcome looks like

Based on a matrix like this your company’s top management can make a well-balanced decision on what is the perfect location for your specific company and your specific planned investment in a new headquarters or support center location: should we go for the best Cost/Quality balance? How important are the location costs in our decision? Do we see any critical risk elements that drive us towards or away from certain locations?

The site selection criteria and their weight may vary, depending on your business strategy, type of office (e.g. headquarters, back office, shared services center, customer service center, legal support office). Location factors or relative weightings may also differ per geographical region. For example investment incentives and grants for certain projects are more of a driver in North America than in Europe and natural disaster risks are typically weighted as more important in Asia-Pacific than in Europe.

Site selection factors

In location and site selection many factors may play a role, so your location and site selection advise is based on three types of factors:

• Costs - All relevant factors that can be translated into money such as labor, land, real estate, taxes, etc. minus the investment incentives, grants, tax credits and tax exemptions offered in the different locations
• Quality of the business environment - Factors that cannot be translated directly into currencies, but have still a direct effect on the performance of the new operations. Think of availability and quality of labor, accessibility, tax environment, ease of doing business and cultural fit
• Risk - All external business disruption risk factors that you cannot influence, but that still may have a substantial impact on your future operations such as inflation risk, currency exchange rate risk, transparency risk, natural disaster risk, etc.

The realization of a new office location comes with significant investments and internal changes. The investments are done for a long period of time and therefore the impact of the new location should also contribute positively for a prolonged period of time. In other words: in case of a wrong location decision the negative implications will also have a negative impact for a long period (e.g. higher costs, issues in finding the right labor, regulatory issues).

Investment incentives and tax reduction measures are attractive in certain countries/States/regions in Europe, the US, Mexico/Latin America, China, Asia. Especially for new facilities with a large number of workers the total financial packages can be (very) interesting for you.

Geographical granularity

In our approach we typically start at the level of regions within countries rather than comparing countries at a national level. This is because for many important location factors the differences between regions in the same country can be significant. This is for example the case for factors like labor costs, labor availability, real estate availability, natural disaster risks and many others.

Site selection criteria for your headquarters or support center

The need for finding a new headquarters location for your company (regional headquarter, business unit headquarter) can come from different drivers. Examples are international growth (leading to the need for setting up a regional headquarters in a new geography), capacity limitations and / or labor market limitations in a current HQ location, or a recent M&A activity. Important factors to be taken into account when selecting your new HQ location are talent availability and quality, quality of life, connectivity & accessibility and corporate tax. Also the availability of incentives and tax credits may play an important role.

For support center locations, a variety of reasons may drive the start of a site selection process, whether this a business support center, shared services center, technical support center, legal support center, call center or reservation center to name a few. In general the growth of the business, the availability of the right talent pool and specific tech skills, the need for cost reduction, harmonization of processes and systems, rationalization after a merger or acquisition, etc. can all play a role.

In the location selection for your new support center having access to talent is the key to success. Around the world, especially in the most attractive hotspot locations, the tension on the labor markets is already high and is expected to soar even higher.

Detailed labor market analysis

We conduct detailed labor market analyses, helping you to determine to what extent you can still recruit and retain the right amount and quality of talent in your current and / or potential new locations. In this approach we apply quantitative labor market analysis on supply of and demand for talent, conducting 5 to 10 year forecasts, and enrich that with in-depth qualitative analysis by gathering information from experts in the local labor market, assessing experiences of other companies in the same labor pool, assessing primary and secondary employment packages and so on.