Location strategy
Aligning workforce and human capital with business objectives
Building a strong workforce is an important part of developing a good location strategy. Amazon was rumored to kept workforce at the heart of their decision-making process in the bid for HQ2. Writing for The New York Times in November 2018, Karen Weise and J. David Goodman argue that the “need to hire tens of thousands of high-tech workers has been the driving force” behind Amazon’s search for a second headquarters, leading the retail giant to tentatively split HQ2 between Long Island City, NY and Crystal City, VA. “Many experts have pointed to Crystal City as a front-runner,” they state, “because of its strong public transit, educated workforce and proximity to Washington.”1 Given the research on human capital, it’s likely that Amazon’s decision to expand to the DC metro will pay off.
Research shows that building a talented workforce can have a major impact on a company’s productivity and revenue. A 2017 study by McKinsey Global Institute found that out of more than 600,000 researchers, politicians and athletes, high performers were 400% more productive than average individuals. In highly complex occupations, such as the “interaction-intensive” work of managers, software developers and others, high performers are a staggering 800% more productive than average workers. It turns out that one job in the top 1% is worth more than twelve in the bottom 1%. For highly complex jobs, the differential is so big it can’t be quantified.2.
These stats indicate that hiring top talent can transform a company’s business operations. So how can organizations attract and retain the best of the best? McKinsey Global Institute argues that understanding “the true economics of value creation in specific roles” is a good place to start winning talent. Companies should focus “on a few critical areas where the best people have the biggest impact,” and then work their way out.3.
Douglas Ready, Linda Hill and Robert Thomas, in a Harvard Business Review on “game-changing” talent strategies believe that talent attraction starts with a commitment from the top executive team to build and maintain a business-first mind-set. From the top down, employers need to tailor their branding to attract talented individuals from college and graduate programs. And how do they attract the right people? Organizations should focus on two things young people care about: career mobility and social responsibility. When talent is recruited, employers need to invest in bringing out the best in individuals. This means companies should create an environment that supports individual independence, coaching and delegation to drive high performance.4Only then can talent be honed and retained to perform at the highest level.
Exhibit 1: So how can organizations attract and retain the best of the best?
Source: Global Knowledge Center Research
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Recources
- Weise, K. and Goodman, J. D. Amazon Plans to Split HQ2 Between Long Island City, N.Y., and Arlington, V.A. The New York Times, November 5, 2018. Available at: https://www.nytimes.com/2018/11/05/technology/amazon-second-headquarters-split.html. [Accessed November 5, 2018].
- Keller, S. and Meaney, M. (2017). Attracting and Retaining the Right Talent. McKinsey Global Institute. November 2017. Available at: https://www.mckinsey.com/business-functions/organization/our-insights/attracting-and-retaining-the-right-talent. [Accessed November 8, 2018].
- Ibid.
- Ready, D., Hill, L, and Thomas, R. (2014). Building a Game-Changing Talent Strategy. Harvard Business Review. February 2014. Available at: https://hbr.org/2014/01/building-a-game-changing-talent-strategy. [Accessed November 8, 2018].
