Mike Johanns Governor

Transcription

1 Mike Johanns Governor Building a 21 st Century Nebraska Financial Services & Software Development Back Office Call Center/Service Center Buildings Introduction In 2000, a partnership composed of Fannie Mae, Nebraska Chamber of Commerce and Industry, Nebraska Department of Economic Development, Nebraska Development Network, Nebraska Diplomats, Nebraska Economic Developers Association, Nebraska Municipal Power Pool, Nebraska Public Power District, and Omaha Public Power District commissioned Deloitte & Touche Fantus to conduct a targeted industry study for Nebraska. Deloitte & Touche Fantus was charged with identifying business clusters that make sense for Nebraska and that meet four criteria. Have greater than average capital investments Are growth industries Have greater than average payroll and benefits Product products or services that are high value-added The Deloitte & Touche Fantus study, available on the Department of Economic Development web site, neded.org, identifies six business clusters. Three of the clusters deal with maintaining existing Nebraska strengths: agribusiness, metal products, manufacturing, and financial services. The other three provide areas of growth opportunity focused on the knowledge-based economy: biotechnology, electronics manufacturing, and information technology/software development. For Nebraska to successfully develop the targeted industries, communities within the state must have the infrastructure to support growth. The Department of Economic Development s initiative encourages communities to develop an inventory of pre-zoned, ready-to-build sites and ready-to-occupy industrial and commercial buildings. This publication is a guide for development of ready-to-occupy or near ready-to-occupy buildings meeting the needs of back office call center and service center s, primarily associated with the financial services and software development industries. (See Nebraska Targeted Industries Study for background information regarding these industries.) Generic examples for this type of business include claims processing centers, customer service centers, accounting, billing, and accounts payable/accounts receivable processing centers, software programming firms, software support centers, contract engineering firms, and sales (telemarketing) centers. These businesses tend to be telecommunications intensive, demanding reliable local and long distance telecommunications capacity, and reliable electric power service. The facilities place a negligible burden on the balance of the public utilities. The Department of Economic Development s intent is to provide a smorgasbord of building options, allowing communities interested in developing one or more back office-ready buildings a number of choices. The communities can select the building size based on the employment guidelines that best fit their needs. The availability of near ready-to-occupy buildings is crucial to attracting back office s. Speed to occupancy and an available labor force are the driving factors in most back office site selection decisions. Typically, the need for additional capacity is generated when the business secures a new contract for services. Back office service centers tend to be al within 90 days following a location decision. Building space must be well suited for the back office type of, economical, and available within a short time frame. The community that has a building ready to occupy within a short period of time will 1

2 often be the winner in these location decisions. This industry is friendly to rehabilitated buildings, especially if leasing this type of building results in a cost savings. Tax Climate: Incentives structured around capital investment will be less of a factor for back office s than other primary industries. The back office investment is greatest in terms of people, software, and technical hardware. Income taxes will be more of an issue with this group than property taxes, although the property tax structure will be a factor to some degree, especially real estate taxes affecting the cost of attracting or relocating top management and professional employees. In general, the Nebraska sales tax and regulatory climate toward the telecommunications intensive industries has been very supportive. Back office s for qualifying businesses in the financial services and software development areas may qualify for state assistance of: Business Incentives Statutory incentives (one of the following) The Nebraska Employment, Investment and Incentives Act The Nebraska Growth and Investment Act Rural Economic Opportunities Act Job Training Assistance of $3,000 per qualifying job (minimum qualifying wages of $8.25 per hour plus benefits) up to $250,000 per project. Communities may want to consider incentives to improve their competitive posture. If so, local incentives to offset the cost of leasehold improvements or reduce the costs associated with leasing or purchasing the building are desirable. Community assistance in labor force recruitment is expected. Depending on the qualifications of the local workforce, incentives to supplement the state customized job training grant may be necessary. Communities (with the exceptions of Omaha and Lincoln) developing near ready-to-occupy buildings for back office service center s can apply for Department of Economic Development assistance of: Community Development Block Grant assistance for project specific infrastructure development (up to $250,000 per project) Department of Economic Development Spec Building Program (up to $250,000 per project) General Site Information Back office facilities tend to locate in office parks, commercial business parks, commercial business districts, and mixed use, light industrial parks if the commercial site of the park is separated from the industrial and distribution uses. In general, the area topography can be slightly rolling or gently sloped. The facility should be located in a commercial setting, buffered from residential and heavier distribution and industrial uses. Landscaped, gently rolling surroundings are generally preferred, but the site should be level with little or no elevation change. On the exterior, back office s tend to look like single-story office buildings. Because the businesses are labor intensive, adequate off-street parking is a must. Downtown or business district facilities, including old retail stores, are readily adaptable to back office s if adequate off-street parking adjacent to the building is available. Recently closed, stand-alone grocery stores, supermarkets, and discount stores make excellent rehabilitation projects for back office s. With the exception of the insurance industry, back office s prefer to lease facilities rather than purchase. Communities developing an inventory of back office suitable buildings should be prepared to lease these facilities. Back office s are labor intensive. Locations close to amenities such as restaurants and child care facilities have a significant advantage in successful back office location decisions. 2

3 Building Specifications In general, back office s require a single story building with an open floor plate. If multistory, the customer normally prefers to have its s confined to a single floor of the building. Natural lighting (windows and skylights) are becoming more frequent demands. Natural lighting is an important consideration for employee morale. A square footprint is ideal, with a rectangular footprint acceptable. Minimal build-out is preferred, offering large, open floor plates for flexible design. Typical building-out will include a controlled access entrance/reception area, employee break room, conference/training room, restrooms, and two or three offices. Square footage requirements depend on whether it is an inbound or outbound call center. Inbound centers generally require more space per person. A general rule of thumb allows 150 square feet for each employee on the largest shift (period of greatest occupancy if shifts overlap). Ample off-street parking is a requirement, with a general rule of thumb of ¾ parking stall for every one employee on the largest shift. The ¾:1 ratio may not be adequate for some s. Communities should err to the side of providing too much rather than too little off-street parking. The general rule for site size is one acre per every 10,000 sq. ft. of building footprint. The following specifications were developed for three options, based on employment size of 50 employees on a single shift, 250 employees (2 shifts), and 500 employees (2 shifts). 50 employee 250 employee Site Size ¾ acre 3 acres 5 acres Building Size 7,500 sq. ft. 30,000 sq. ft. 50,000 sq. ft. Ceiling Height 10 ft. 10 ft. 10 ft. Off-street parking 40 stalls 140 stalls 225 stalls Landscaping Preferred Preferred Preferred Utility Requirements Electricity* Natural Gas Water Wastewater Telecom.** 500 employee Single circuit feed required, dual circuit feed preferred Dual circuit feeds with automatic throw-over switch preferred Dual circuit feeds with automatic throw-over switch preferred Community should be prepared to provide service interruption history for the circuit servicing the facility Community should be prepared to provide service interruption history for the circuits servicing the facility Community should be prepared to provide service interruption history for the circuits servicing the facility Minimal building Minimal building Minimal building heating use heating use heating use Minimal domestic use Minimal domestic use Minimal domestic use Minimal domestic use Minimal domestic use Minimal domestic use 4 T 1 voice and data 10 T 1 voice and data 20 T 1 voice and data circuits minimum circuits minimum circuits minimum ISDN Capacity required ISDN Capacity required ISDN Capacity required DSL Capacity preferred DSL Capacity preferred DSL Capacity preferred Fiber-optic sonet ring Dual fiber-optic sonet Dual fiber-optic sonet connection required ring connections ring connections preferred Multiple long-distance carrier options required preferred Multiple long-distance Multiple long-distance carrier options required carrier options required Internet Access*** Required Required Required Zoning Commercial Commercial Commercial 3

4 *Uninterruptible power is idea for back office s, but is rare. Come back office s will require uninterruptible power (i.e. backup batteries, backup diesel generators, dual circuit electrical service, or some combination of backup electrical power). The need for this service will be more acute for inbound s or s that need to have computer servers and internet sites up 24 X 7. **Telecommunication service costs are typically the second largest al cost factor (behind labor costs). Proximity to interexchange carriers (IXC s) points of presence impacts telecommunications costs. If the location is a great distance away from the POP (point of presence), it generally costs more to get the telecommunications traffic to the POP, thus increasing the back office s monthly cost of doing business. Once the customers get their traffic to the POP of the IXC, the cost per minute for carrying inbound or outbound traffic is generally competitive. Local telephone service costs will be a factor to some extent, but as it impacts costs of getting to the IXC POP. Reliability and availability of telecommunications service will be a key issue. The prospect will most likely required statistics related to the local switching service and the telecommunications transport capacity. Communities should be prepared to provide service response time information and outage history. Diversity of routing and/or redundancy of telecommunications infrastructure may be a factor in the location decisions. Communities that have the ability to route telecommunications traffic out of the community over two diverse routes typically have an advantage. That will be particularly true for back office s that receive inbound traffic or for s that are open for extended hours or on a 24 X 7 basis. Diverse routing of telecommunications infrastructure within the community to the actual business site is an additional advantage. ***Most back office s will require some sort of internet access, most likely requiring high speed access. This may be provided by an internal company network, in which case, the types of internet access available locally will not be a factor. Alternatively, the company may wish to access the internet locally, wanting some type of ISDN, DSL, dedicated T1, or cable modem high speed access. High speed internet access locally is an asset to these companies from the business usage perspective, plus it provides their employees work-at-home capabilities. Also, there is growing use of the internet at the workstations of the back office s where employees access web sites as real time information sources. Transportation Requirements No significant ground transportation requirements Good site access for passenger car traffic (employee generated traffic) Overnight package delivery services required Private airport/commercial air service preferred Labor/Workforce Requirements Trained or trainable workforce Licensed or licensable workforce (ability to obtain insurance or stock broker (licenses) Workforce with a strong customer service orientation Workforce with the ability to learn medical, financial, and technical terminology Workforce oriented toward sales Workforce with effective oral and written communication skills Workforce with basis computer skills (ability to work in a mouse and windows environment, keyboarding, spreadsheet and word processing, ability to move between screens, programs, and windows) Reasonable wage rates (labor costs are the #1 expense for these s 4

5 Typical Back Office Operation Workforce 50 employee 250 employee 500 employee Customer Relations Specialist Administrative Support Staff Technical Support Staff Supervisory Management Typical Wage Rates Wage rates will vary depending on requirements (example: licensed vs. non-licensed). Non-licensed entrylevel positions typically start at $8.00 per hour plus benefits and go up. State job training or CDBG assistance requires a minimum wage of $8.25 per hour plus benefits. Licensed entry-level positions are typically in the $10.00 to $14.00 per hour plus benefits range. Entry level jobs in this industry typically receive performance bonuses in addition to hourly wage. Support Services Required Technical support Telecommunications Network wiring Computer/software maintenance General business services such as janitorial, office supplies, staffing assistance Professional services such as legal, accounting Community Challenges Labor availability (labor pool is typically considered a 50 mile radius) Robust telecommunications infrastructure for high volume data and voice communications Available buildings Quality of technical support and technical support response time Most of these companies will require some kind of LAN administrator. Sometimes this function will be done remotely, but additional computer support is normally required on site. Availability of technical computer, network, and software support in the community is an advantage. Information technology-based businesses that are not labor intensive but which require a more sophisticated or higher level of skilled labor force and use technology as a key component of delivering their service or producing their product have more intense needs than previously described. Proximity to other businesses or institutions that use a sophisticated level of information technology expertise is generally important to this type of. Typically, there is a cluster effect or a synergy that takes place with this set of service industry companies and employees. For example, a software engineer may be reluctant to move to a community that has one or two software engineering employment opportunities. If there are multiple firms that make use of that type of expertise, the employee will feel more inclined to move to that location, knowing that if the first job does not work out, there may be other options. Companies that need that type of expertise will look for a pool of skilled labor in the area as well. Proximity to educational facilities or access (online or video) to educational facilities related to computer science, information technology, and related technical disciplines will be a plus for these companies which hire the more sophisticated level of information technology employee. 5

6 Internet access capabilities will be of greater importance to this kind of business. Reliable high-speed access may be critical to the manner in which some of these businesses communicate with their customers and vendors. Software programmers in particular will not tolerate dial-up internet access. Technical support for computers and networks will be of an even greater importance to this type of company. In part, these firms will probably need this type of support, but also, because of the synergy of those types of firms being in the community, as well as the availability of hardware items close by. Quality of life, including educational, health care, and other community services will be much more important for this group of companies. Most of these firms can be located anywhere to conduct their business. The employees will command the salary and wage scales that will allow them to take in more of the finer things in life. Communities with weak school systems, inadequate access to health care, or little or no cultural, economic, or social amenities will have difficulty recruiting these companies and their employees. Quality of life is a definite factor in this group. Musts Quality, trainable workforce Site free of flood plain, wetlands and other environmental issues Adequate utility service Ready to occupy building Open floor plate Minimal remodeling (90 days or less to occupancy) Off-street parking Lease option Wants Competitive recurring costs Favorable site/building characteristics Ability to attract and train workers Availability of local recruitment and training resources Local education facilities Compatible surrounding land use Solid, unified business community with established leadership Limited competition from related industries for employees Bi/multi-lingual resource pool Child care services in close proximity Sample Building Designs (following pages) 6

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