t has been interesting to observe over the past 15 or so years the evolution of economic incentives for companies relocating to a new community. Early on, the emphasis for many state and local governments was to orient their overall incentives package towards capital-intensive companies with minimal regard to the needs of non-manufacturing and service-based concerns. Since these "capital light" sectors did not require substantial infrastructure, many state and local municipalities had been hard-pressed to develop commensurate monetary and competitive incentives within their enticement package to draw such companies.
      Hiring a qualified and well-trained employee is always one of the "Top Three" decision matrix factors in a corporation’s choice to expand to a new community. So even if the community could provide the monetary incentives, it was generally lacking in providing assurance that a quality pool of labor was available.
      Workforce Training Programs (WTPs) have become crucial for local communities and states, as these programs provide for re-training opportunities. Even as many communities felt the impact of industry sectors being outsourced globally or just diminished, state and local governments endeavored to remain competitive by sharpening job skills through WTPs, and thus provide better opportunities for its citizens. Community leaders could then point to its talent base in recruiting further company expansions.
      Over time the more proactive communities developed training programs in partnership with and geared to the skill sets of these non-manufacturing, technology-driven employers. And as such, those communities with well-developed and easily customized WTPs have gained a competitive edge in courting such expansions.       WTPs have not been as vital to the employer as to the community, though this does not mean that state and local governments should abandon WTPs. Many other factors on the decision matrix jump well ahead of WTPs in importance. Nevertheless, WTPs are a useful tool that can provide the employer with great candidates and ultimately even better employees.
      If administered appropriately, WTPs can fund industry-education training tailored to the needs of the client. The biggest complaint I get from several of my clients is that these programs suffer from inordinate (some used the word "inane") paperwork and redundant tracking requirements. Similar comments were "Too much documentation" and "Too many strings attached to be beneficial."
      One recent anecdote probably sums up this problem best. The local community college, as directed by the state, was tasked to not only provide the training on its campus on behalf of the new employer, but also to coordinate the record-keeping. When faced with the possibility of training up to 500 employees over a 24-month period, the college declined, citing the daunting paperwork to administer the program.
      Other difficulties involve the employer itself. Very few companies have the personnel in place to track these programs to insure compliance and reimbursement. Many internal training programs are deemed confidential or are only administered by in-house trainers. These companies worry about the disconnect in outsourcing their training to an entity that may not be aligned with the company’s best interest.       While I recognize that state and local governments want to quantify their "bang for the buck," eliminating much of the documentation attached to these programs would be a significant first step. It is already a "win-win" for both employer and community to have a well-trained employee as a result of his or her participation in these programs.
      Recognizing that each company’s training is unique, and that for many corporations the training is ongoing beyond the initial hiring phase due to attrition and skills advances, is important. Many WTPs require local input, such as requiring the local college to handle all training. If the company has its own internal training group or has a specific outside firm it uses, the state or local WTP could reimburse for such salaries and/or consulting fees as part of the incentive. Another idea is if the company has achieved certain benchmarks in hiring, the WTPs would continue to accrue for a longer period of up to five years as positions need to be filled.
      With many workers either displaced or perhaps newly returning to the labor market, the community or state could offer an incentive to hire these displaced employees by refunding a portion of the salaries for a short time period.
      Allow for the company to be a "designated" business, which would provide reimbursement through the WTP for any employee to develop "superior" job skills, such as bilingual capability or computer training.
      Another overall idea is to expand these programs to include retaining existing companies.
      WTPs can be a beneficial asset to both community and the employer. Those forward-thinking state and local governments that can tailor these programs to the unique needs of employers will definitely gain an advantage in recruiting new and expanding companies.

      Michael C. Rareshide is executive vice president of Partners National Real Estate Group, a Dallas corporate real estate services firm specializing in site selection for corporate users. He has represented dozens of corporations in relocations or new site selections involving from 10 to 1,000+ employees, including corporate headquarters, regional offices, operations centers, data centers and other uses. He can be reached at Michael@pnre.com.