Selecting the right location for big-box industrial facilities is no longer just about current labor conditions or real estate costs. Today’s industrial operators prioritize long-term workforce sustainability and cost management to ensure operational success.
The competition for skilled labor in the industrial sector is intense. To gain an edge, companies must access the right talent pool at the right cost—balancing workforce quality with affordability is critical, as labor expenses are often the largest cost center for industrial facilities.
Labor vs. Real Estate: The $1 Million Question
Adjusting labor or real estate expenses can lead to significant savings. For instance, reducing wages by just $1/hour for 500 employees could save $1 million annually, while achieving the same savings through real estate cost adjustments would require a reduction of $2.08 per sq. ft. annually.
These figures underscore the importance of integrating labor considerations into site-selection strategies.
Futureproofing Your Workforce
The North American Big-Box Industrial market is adapting to macroeconomic uncertainties, a construction boom, and evolving supply chain needs. Key factors in site selection include:
- Workforce scalability and availability
- Proximity to growing population centers
- Automation-ready facilities
- E-commerce fulfillment demands
Industrial leaders must evaluate these elements to ensure long-term feasibility and competitiveness.
Measuring Risk in Workforce Planning
A data-driven approach to site selection helps assess workforce risks and longevity. VidTech employs advanced tools like workforce analysis models to evaluate factors such as:
- Starting wages and turnover rates
- Applicant-to-hire ratios
- Workforce scalability over time
- Competitor impact on labor availability
This analysis empowers businesses to identify markets that can sustain recruitment and turnover demands while maintaining competitive costs.
Key Market Insights
Markets with Favorable Longevity
Cities like Memphis and Savannah offer low labor costs and ample talent pools, making them ideal for scaling operations. However, scalability in smaller markets may be limited as competition increases.
Markets with Challenges
High-cost labor markets, such as Seattle and Ontario, require higher wages to attract talent. While these markets boast deep talent pools, sustaining growth demands significant investment in competitive compensation.
Competitive Positioning
Markets with large labor pools, such as Long Beach and Houston, provide resilience against workforce competition. Smaller markets like Savannah, however, are more sensitive to new entrants, which can strain labor availability and reduce longevity.
Strategic Recommendations
To succeed in today’s competitive industrial landscape, companies must:
- Monitor labor trends in prospective markets
- Evaluate compensation packages to stay competitive
- Anticipate workforce challenges with data-driven insights
- Partner with experts to analyze local demographics, commuting patterns, and labor demand
Elevate Your Industrial Real Estate Strategy with VidTech
At VidTech, we help businesses make smarter industrial site-selection decisions. With 4K drone and satellite imagery, combined with detailed workforce and real estate analytics, we bring clarity to complex decisions. Our platform overlays key data to visualize labor trends, facility scalability, and competitive positioning, helping you futureproof your operations.
Ready to optimize your industrial portfolio? Partner with VidTech today.
