Locating within a dynamic urban core is increasingly necessary to compete for today’s workforce.
When businesses consider their ability to recruit and retain employees, they often think of the internal things they can readily control, such as compensation, employee recognition, training, opportunities for advancement, workplace environment and culture, all of which are very important. However, there are a couple of other factors that are important as well: quality of life and location.
Location, Location, Location
As businesses seek to recruit and retain talented employees, we’ve heard a lot about the importance of quality of life: things like good schools, parks, activities, culture, recreation, commute time, cost of living and so on. And while businesses do not have direct control of these items, they can affect change—especially when the business community comes together to assist local government in addressing these issues.
Just when we think we have it all figured out, I am reminded of the Bob Dylan song, “The Times They Are A-Changin'," for indeed they are. Recent studies have shown a new criterion that has risen to the top of the list for businesses, with regard to retention and recruitment. That criterion is location—and more specifically, downtown.
Why are businesses moving downtown in large numbers? A study by Smart Growth America, in partnership with Cushman & Wakefield and the Center for Real Estate and Urban Analysis at George Washington University, entitled CORE Values – Why American Companies are Moving Downtown, reveals some important findings. The top reasons for moving downtown, according to the 500 companies who took part in the study, were:
- To attract and retain talented workers;
- To build brand identity and company culture;
- To support creative collaboration;
- To be closer to customers and business partners;
- To centralize operations; and
- To support triple-bottom-line business outcomes.
Perhaps even more important, the study identifies what companies look for when choosing a new location to assist them in achieving these goals:
- Vibrant, walkable neighborhoods, where people want to both live and work;
- Accessibility through a range of transportation options, commuting choices for employees, and convenient access to the rest of the city and region; and
- Great office space, including renovated warehouses and other unique and inspired architecture, which dovetails with a desire for similar neighborhood qualities.
Lessons for Competitiveness
So what does all this tell us? It tells us that our workforce and the ways we work are changing. And it tells us that, while the most important thing for a new college graduate is a good job, other factors quickly take over when there is a choice of companies offering that job. These factors are characteristic of viable urban communities, which enable young people to function without cars, work and recreate in a more collaborative way, and interact with their peers in a dense, diverse population—within a culture that reflects their view of themselves.
The lesson for businesses is that, unless you’re in a location with a vibrant downtown, it will become more difficult to compete, regardless of your internal offerings. That is why moving into a dynamic urban core is increasingly necessary to compete for today’s workforce.
The lesson for communities is to adapt, or become increasingly disadvantaged in attracting and retaining businesses and a quality workforce. That applies to all communities, regardless of size.
It may be easier for us to say, why bother? Peoria cannot compete, we are too small, and we can never compete with Chicago for a vibrant urban downtown; therefore, investing in our downtown is a waste of resources. This would be a significant misunderstanding and a tragic mistake—because we aren’t competing against Chicago or New York; we are competing against Des Moines, Fort Wayne, Lexington, Madison and Omaha. These communities have seen this trend as well, and they’ve been transforming their downtowns into vibrant urban areas that enable them to attract and retain businesses and employees. Just one example: from 2002 to 2007, the City of Des Moines increased the number of people living downtown from 3,000 to 6,000—a doubling of the downtown population in just five years!
Even more challenging is that cities smaller than Peoria have also recognized this new paradigm and are adjusting to compete. Duluth, Minnesota, for example, with a population of 86,000, saw a 25-percent increase in the number of individuals in the 25-to-34 age group—a key workforce demographic—over the past five years, according to the U.S. Census Bureau. Cedar Rapids, Iowa recently commissioned a study and adopted a plan to address its own competitiveness for retaining and recruiting businesses and employees, benchmarking many of the same communities as Peoria. Therefore, choosing not to invest is not maintaining the status quo—it is falling behind, as competitors may overtake us in the battle of providing businesses and employees with what they are seeking.
The good news is that Peoria is making significant investments in our downtown. In the last couple of years, we have seen tens of millions of dollars invested in its infrastructure, the establishment of the DDC by the CEO Council, the designation of Peoria’s Warehouse District as a historic district, and the city’s eligibility for state historic tax credits, one of just five cities in Illinois. New public art has been added to the Warehouse District, businesses are relocating downtown, and developers are moving forward with plans to redevelop historic buildings, adding both commercial and residential space.
Over the next five years, the downtown will see significant changes, reflecting what businesses in the CORE Values study stated they were looking for when selecting a location. Together, leaders from business and local government can make a significant impact on our ability to retain and recruit a quality workforce. The DDC is a willing partner in this effort. If you or your business has questions on how you can help, contact us, and together we can continue the transformation of our downtown. iBi
Michael J. Freilinger is president and CEO of the Downtown Development Corporation of Peoria.