[2015 Top Site Selection Factors Ranking: #6]
How big a factor is the cost of labor? That depends significantly on the type of facility. For some operations, labor is by far the biggest cost, but for others, its further down the list, and thus not as major a location factor. Given that, the relative position of labor cost on a ranking is bound to vary with the prevalence of different kinds of projects.
Now, 35 percent of the demand for industrial real estate is e-commerce-related. That’s noteworthy because e-commerce distribution requires more labor, dramatically upping the labor cost. If you were to put up a million-square-foot distribution center that’s more traditional, fulfilling stores, it would employ 100-plus people. The same million-square-foot building for e-commerce may employ 1,500 people, with the ability to scale up to 2,500 people during peak seasons. From a labor perspective, that’s huge. That’s certainly a cost issue, but also an operational consideration that can really drive a location decision.