Week of July 31, 2000
  Blockbuster Deal of the Week
   from Site Selection's exclusive New Plant database

Virtual Integration:
Putnam Investments Creating 100 New Virtual Jobs
in Rural Maine, 100 More on College Campus

Employing a savvy strategy to cope with the drum-tight U.S. labor market, Boston-based Putnam Investments (www.putnaminv.com) is creating 100 new virtual jobs in rural Maine. Simultaneously, Putnam -- which manages US$370 billion in assets and employs more than 6,000 people worldwide -- is enterprisingly creating another 100 new jobs. Those positions will be filled by students at Bangor-based Husson College (www.husson.edu), working inside in the on-campus facility that Putnam recently built. Of the new jobs, the 100 new virtual positions are a particularly resourceful twist - and one that reveals how far we've migrated from the old "if-we-build-it-they-will-come" strategy that once drove many corporate facility investments. In contrast, Putnam isn't building anything for these jobs. Instead, it's taking the 100 virtual jobs to space that's already built - employees' homes in rural Maine.

As Putnam made its strategy public, Maine Gov. Angus King (www.state.me.us/governor) provided a pretty solid summation of what lay behind the deal.

"A combination of Maine's advanced telecommunications infrastructure, Putnam's innovation, Husson College's progressiveness, the legislature's positive approach to the mutual fund industry, and Maine & Company's persistence led to this cutting-edge opportunity," King said.

The 'Virtually Integrated Organization"

The new remote-work jobs also offer yet more evidence of the transformation of the "vertically integrated organizations" that came to the fore in the heyday of Henry Ford and the Model T. Instead, with information technology and the Internet, the model is becoming the "virtually integrated organization." Companies are offloading numerous non-core functions to a host of virtually-plugged-in support players.

(The same sort of thing is rapidly happening within the corporate real estate industry. Processes are rapidly being transferred to the Web, with huge potential for cutting costs and increasing efficiencies. For a more in-depth look at this phenomenon, watch for the interview with Gartner Group's Michael Bell, " 'Web-ify' or Die: How Cyberspace is Remaking Real Estate," in the September issue of Site Selection.)

Putnam's 100 home-based jobs are another tentacle of the virtually integrated organization. And the company buttressed its strategy by choosing to create the positions in rural areas, where unemployment and underemployment are often significantly higher than in more densely populated U.S. locales.

The Maine jobs, though, aren't Putnam's first virtual venture. Putnam has a work-at-home program for Massachusetts-based employees. The nine-year-old program employs 330 workers.

Here's how the Maine program will work: Putnam will set up virtual offices in 100 Maine residents' homes, where they will work in a broad spectrum of jobs - including customer service, systems and management. The company will provide a PC and will wire employees' homes with ISDN or DSL service.

Obviously, the program provides flexible employment opportunities in outlying areas. But it has the additional benefit of introducing state-of-the-art technology to those locations.

Already, Putnam officials are discussing the possibility of further expanding the virtual jobs program in Maine.

Program Also Boosts Distance Learning

Putnam remote-work program also tackles another major labor challenge - keeping employees' skills up to snuff in the face of rapid, continual change.

Through the lines leading into their homes, the Maine virtual employees will have access to both proprietary training and general career building skills, Putnam officials say.

"I refer to it as 'career laddering'," explained Joe Wischerath, executive vice president of Maine & Company (www.maineco.org), the private organization that helped recruit Putnam. "This entire program allows people in Maine to build skills toward more advanced opportunities in the mutual fund industry."

Students in More Traditional Space

Putnam's employees at Husson College will work in a more traditional workplace setting.

They will be trained in and work in the on-campus Putnam customer-service facility. Putnam has operated a similar program at Dean College in Franklin, Mass., for five years, employing up to 90 students per semester.

"The on-campus opportunity gives students the unique ability to earn income, gain valuable experience, and learn about the rapidly growing mutual fund industry," explained Dr. William Beardsley, president of Husson, a 102-year-old private college with approximately 2,000 students.

"This could also lead to more permanent, professional careers with Putnam once they graduate," Beardsley added.

New Law Helps Seal Deal

The Putnam/Maine partnership originated several years ago, when King and his economic development team asked Putnam to consider building a facility in the state. Maine & Company renewed discussions with Putnam executives in May 1999, leading to the newly announced jobs, state officials report.

Putnam's move to Maine was aided by new state legislation. Rep. Jane Saxl of Bangor sponsored a bill in this year's legislative session that was designed to improve Maine's tax competitiveness for mutual fund companies. Under the old state law, it was unclear whether Maine would tax all assets managed by a mutual fund company that moved a portion of its operations into the state. Other New England states had recently amended their tax laws to clarify such issues. Rep. Saxl's bill to amend Maine's tax code passed, making Maine a more attractive location for mutual fund operations.

"The state of Maine has worked diligently to provide employment opportunities for its citizens and to create an attractive business climate for companies like Putnam Investments," said Lawrence Lasser, Putnam president and chief executive officer.

©2000 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.