Finding the Perfect Spot

Staffing Industry Review Magazine (November 2007)

It wasn’t an ideal location. Back in 1995, Express Personnel opened an office in the Midwest that was on the second floor of a dark building. The office also didn’t have any signage and was close to a residential area. “No one knew where it was. People just couldn’t find it, and so the applicant flow was very poor,” explains Nikki Sells, VP of franchising.

So a year later, in 1996, a decision was made to move the office about a mile away to another site, where it has remained for the last 11 years. The current location is more visible, has great signage, and is on a very busy street.

Being in a good location is critical for any staffing company’s success. After all, if you’re off the beaten path, you’re hardly going to get any business at all, and you will be forced to either shut down or move. If you’re trying to find the perfect spot for a new or existing office, here are some things that will help make the process a smooth one.

Plan Ahead
Michael Casolo, executive managing director and principal of The Staubach Co. in New York, who helps staffing companies find locations, says the earlier you start looking, the better. One of the biggest mistakes his clients often make is that they don’t plan far enough ahead. Casolo recommends companies start the site selection process at least six to nine months ahead from when they actually want to be there, and a year in advance would be even better, he says. “In a perfect world, that would be ideal.”

Work with a Realtor
It’s also a good idea to work with a commercial realtor. Kforce, for example, works with Cushman & Wakefield, according to Glenda Montemayor, director of corporate real estate. “Every city has a Cushman or Cushman affiliate,” she says. “They know exactly what we’re looking for. We’re relying on them for their market knowledge and also their knowledge of landlords.”

Paramount Staffing in Northbrook IL works with Ricciardi Donovan Realty, which also is based in Northbrook. “We tell them our parameters, what we’re looking for, what our pricing structure is,” says Matt Schubert, Paramount’s president. “They’ll usually use their MLS or drive around and then set up appointments with the landlords.”

A realtor can provide important information about the demographics of people who live in the area as well as a history of what’s been in the area.

“If you took our broker three miles outside the downtown area he would get lost, but in the downtown retail market, if you point at any building he can tell you who was in that building each year for the past 20 years,” comments Aaron Green, founder of Boston-based Professional Staffing Group. “He helps us because he has information about the market that others don’t, and furthermore, because he has a reputation as one of the top players in the market, prospective landlords respond more favorably.”

Research the Market
You should always research the market you want to pursue. “The key is we do market research and then we start trying to find that location and running it,” says Dennis Judge, executive VP of The Judge Group.

Amy Gerrity, president of The Reserves Network based in Fairview Park OH, says her company learned the hard way when, trying to serve a client, it quickly jumped into a location without doing its homework. “We didn’t do market research,” she explains. “We didn’t follow our own rules. We didn’t follow our own plan. It bit us. We were overly zealous in trying to serve this customer.”

Thankfully, The Reserves Network signed only a three-month lease on that location. The office closed after that short period and then began to do off-site recruiting and service customer needs at existing nearby offices, according to Gerrity.

Go Where the Job Market, Talent Pool Are Strong
It’s always good to go somewhere that has a strong job market and a lot of available workers. When Asset Staffing opened a location for its subsidiary, Northpointe Personnel, in central New Jersey in 2003 and one of its own offices in Miami in 2006, “The main thing we looked for was a hot job market in a major metro market,” comments Ed Giannattasio, president. “Job growth in Miami since May 2006 has been over 35% while northern and central New Jersey have experienced job growth of over 70% for the same period.”

He continues, “Along with a strong job market, we looked for a deep pool of available and qualified human capital. Both markets had strong employment pools available for our clients.”

The Closer You Are to Your Customers, the Better
You should also try to find a spot that’s in the same vicinity as your candidates and clients. Stephen James Associates moved an office from downtown Boston to Needham MA because that is where most of its candidates live, explains Bill Pisano, director of branch operations.

“The most important thing for us is the ability of candidates to get to and from our business,” he says. “We try to be where these people live. We want to make it as easy and accessible as possible for candidates.”

Every time Detroit-based Strategic Staffing enters a new market, it’s following a client, says CEO Cindy Pasky. “That’s always been our strategy. We always go because we have an existing client. We know they’re going to go there, and we want to be ahead of the game or there before they ask us. Wherever clients need us, that’s where we go.”

Determine If You Want a Retail or Office Location
It’s also important to determine if you want to be in a retail or office setting. The Staubach Co.’s Casolo says he sees more people going into retail space. It’s more expensive than office space, but you’re going to have better visibility, points out Casolo. He adds that, “Some office buildings may not be as eager to have a staffing company as a tenant.”

Express, which has offices in both retail and office spaces, prefers retail space because of the good signage it provides, comments Sells.

Randstad also prefers to be in retail space, says Genia Spencer, managing director of operations and human resources. “We look at it as an investment and as advertisement costs. It’s something we’re aware of.”

PSG has been in retail space in downtown Boston for the past eight years, according to Green. “While retail space in this market costs about twice as much as office space, we feel the premium is worth it,” he explains. “We get brand recognition, candidates find us easily and we get walk-in client and candidate traffic.”

PrideStaff also prefers retail space, and being close to anchors such as H&R Block, Verizon, and AT&T, according to Gerry Rhydderch, VP of development. “Those we will definitely look at,” he says.

The Reserves Network likes the visibility and continuous advertising that a retail strip mall provides, comments Gerrity. “It’s the subliminal advertising from [people] driving back and forth and seeing the signage all the time,” she says.

Patti Penny, CEO of Springfield MO-based Penmac Personnel Services, says her staffing firm also prefers to be in a retail setting. That’s because many of her temporary workers are “out doing labor work and have got their bandanas on.”

Still, others prefer to be in an office. Stephen James Associates – a professional recruitment firm specializing in accounting and finance, banking, human resources, sales and marketing – prefers to be in office space because it provides a more professional setting, explains Pisano. “We look at ourselves as professionals,” he says. “They [temporary workers] need the confidentiality that an office is going to provide. Being in a strip mall isn’t going to let that happen.”

The Judge Group’s Dennis Judge says his company always goes for Class A office space because image is important when you’re trying to attract new recruiters, and bring in consultants and clients.

Decide Whether a City or Rural Area Is Best for You
You’re also going to need to decide whether you want your new office to be in a city or in more of a rural area. Randstad goes into urban areas where “…there always seems to be an Ann Taylor, good book store, good coffee, good shopping and choices for lunch” nearby, says Spencer.

PSG, which has just one office in Boston, also prefers being in an urban location, explains Green. “We like to do heavy marketing and branding of ourselves,” he says. “We want the concentration of people in the city.” Strategic Staffing also prefers a city location, says Pasky. “We love to be downtown. We love cities. We love old buildings. It’s just our style. That’s where we want to be.”

Penmac Personnel’s Penny says she prefers to go into small rural communities with a population of 50,000 or less. In rural areas, there is less competition and you get more recognition, she stresses. “Identity is easier to get out there,” she says. “With a few exceptions, the larger the city the harder it is to establish ourselves.”

Your rent also is going to be less in rural areas, points out Penny. “Your monthly lease is much less than [in] the cities.” She adds that advertising is less expensive than in cities, as well.

The Stand-alone vs. Multi-tenant Debate
Another thing you need to do is figure out if you want to be in a stand-alone building or share a building with a lot of other businesses. PSG has a stand-alone location. “We’ve got our name right on the building,” says Green, noting it’s nice not having to share it with other people.

PrideStaff’s Rhydderch says his company prefers to be in multi-tenant locations. “Freestanding buildings are more light industrial. Professional staffing is more our model.”

Set a Realistic Budget for Your Rent
The cost of rent is going to play a factor in the spot you choose as well. PrideStaff looks at spaces that rent for between $1,700 and $2,500 per month, says Rhydderch. Sometimes franchisees say they’ve found a $4,000-a-month location, and that’s too much, he explains.

Express’ Sells points out that it’s harder these days to find a space that not only will service your needs but also be affordable. “It’s out there,” she says. “You just have to spend more time looking for it.”

Find Out What Kind of Lease You’d Be Getting
When it comes to leases, shorter is always better. Express typically signs a two-to-three-year lease, says Sells. The company never suggests anything that’s beyond a five-year lease. “Most franchisees don’t sign anything that’s more than five years,” Sells says. “It would be crazy for them to do so.”

The Reserves Network’s Gerrity says her company also prefers short leases, that are anywhere from one to three years long. “If the market dies and you’re locked into a five-year lease, it’s, like, oh jeez,” she says.

Most of the leases Stephen James Associates signs are for five years, and some are for three, explains Pisano. He says his company doesn’t commit to anything more than a five-year lease.

PrideStaff traditionally signs a five-year lease with the opportunity to get out of the lease after three years by paying the last two years of tenant improvements, according to Rhydderch.

Get the Building Wired for the Internet
The Reserves Network has moved into a site, and then found out it didn’t have Internet access, explains Gerrity. The company then has had to become creative and find other ways of getting access, such as a satellite company. “We’re dead in the water if we can’t connect to our own computer,” Gerrity says.

Consider the Amenities
It’s always important to consider the amenities. For example, you’ll need to make sure there’s sufficient parking space. “If you don’t have parking for your staff or candidates, that’s a problem,” comments Pisano of Stephen James Associates. And you’ll need to find out if parking is free or if there’s a charge. “Temporary workers don’t want to pay for parking [when they come in for an interview or to pick up their pay check],” Montemayor points out.

One thing that might be important to you is a conference room. Kforce looks for locations that are equipped with a conference room because they are great for client visits or for conducting interviews when designated interview rooms are full, explains Montemayor. Montemayor says Kforce makes sure that every building it moves into is ADA compliant, so that everyone – including those who are disabled – can be accommodated.

Factor In How Much Work Will Need To Be Done
If the space you’re looking at would need a lot of renovation work, upgrades or repairs, you may need to reconsider. After all, the cost of getting the place to where you want it is going to add up. “The flexibility of a space is very important,” says Express’ Sells. She says her company doesn’t want its franchisees to have to use a huge chunk of their capital to build out a space.

Make Sure the Location Will Meet Your Future Needs
You don’t want to make the mistake of moving into a location that you’re going to outgrow a few years down the road. “Make sure it will accommodate future growth,” comments Pisano of Stephen James Associates. “Don’t get a space that’s going to limit you in size.”

Decide How Far You Want To Be from Competition
You need to figure out if there are competitors around the area that you’re looking at, and if so, how you feel about that. Some staffing companies say they don’t have a problem being close to competition. Others try to avoid like the plague being near competitors and will turn down a location they are otherwise happy with because there are competitors nearby.

“There’s nothing wrong with being part of a cluster,” says PrideStaff’s Rhydderch. “Nothing at all. We duke it out with all. The competition is fine. It endorses the fact that there’s business there in the first place.” Jason Banks, VP of national operations for Lloyd Staffing, says his company feels the same way. “We’ve never shied away from being down the street from a competitor. That has never pushed us away from a location.”

The Reserves Network tries to avoid being in the same building or the same strip mall as competitors, but if they’re down the street, that’s OK, says Gerrity. Penmac’s Penny says she “definitely” prefers to stay away from the competition. “I just don’t think it’s very kosher.”

Some Want the Same Look and Feel
If having the same look and feel is important to you, you need to factor that in the location-hunting process as well. “That is definitely big with us,” says Lloyd Staffing’s Banks. “We’re very careful about where the offices are and the look and feel of those offices. Senior management gets involved. We take our look and our appearance quite seriously. We like to think our sites are inviting to clients and candidates. We like to host clients as much as possible.”

Check Out the Landlord
It’s important to find out who your landlord would be and make sure he or she is a good one, stresses Kforce’s Montemayor. “The landlord can make your stay there extremely pleasant or extremely difficult,” she points out, noting that when her company encounters a bad landlord, dealing with the issue takes up a lot of her time. For example, if it’s mid-July and the air conditioning in the building is broken, will your landlord take care of it right away or leave everyone sweltering?

Often when one of Kforce’s regional VPs wants to move out of a building, it’s because of the landlord, explains Montemayor. Other reasons why regional VPs say they want to move are space constraints or a traffic problem, she explains.

Paramount Staffing usually invites a potential landlord to another of its locations to see what goes on, explains Schubert. “We are always very open and honest as to the business we are in, what our typical day is like,” explains Schubert, who says his company opens at 5 a.m. and has a lot of people coming in on Fridays to be paid.

One option is to become your own landlord, although it’s rare for staffing companies to own the space they occupy. The benefit of being your own landlord is that the rent you pay goes back to you, but at the same time, you have be your own handyman and personally responsible for repairs and any maintenance-related issues.

Paramount Staffing owns three of its seven locations, according to Schubert. “It’s like a house,” he says. “If you could own, you’d rather own than rent.”

The Reserves Network owns less than 10% of its locations, according to Gerrity. “It has got its pluses and minuses, but for the most part there are pluses,” she says. “We’d like to do more of those. You’re limited to where those complexes are. They seem to be in large cities.”

Talk to Neighboring Businesses

Gerrity says it’s highly beneficial to talk to other businesses in the area where you’re looking to open up a location to find out what they have to say. Are they happy? What do they like and not like about it? What do they think of the landlord?

Make Sure There’s Food Nearby
You should also try to find a place that’s close to a food establishment or vendor. When it’s lunchtime, your staff won’t want to spend all or most of their lunch hour driving somewhere that’s far away to get something to eat.

Kforce seeks out locations that have restaurants within walking distance, or better yet, that have small food vendors right there in the building, comments Montemayor. “It’s just more productive for everyone not to have to drive 20 minutes to go to Burger King.”

Finding a location can be one of the most important yet challenging things you do: Important, because without a good location you’re not going to be successful; and challenging, because there are many decisions to make and many things to consider. However, if you follow the aforementioned tips, it should make the process a little easier.

Tips for Finding a Location
. Plan ahead
. Work with a realtor
. Research the market
. Go where the job market, talent pool are strong
. Locate close to customers
. Determine if you want a retail or office location
. Decide whether a city or rural area is best for you
. Determine if you want to be in a stand-alone or multi-tenant building
. Set a realistic budget for your rent
. Find out what kind of lease you’d be getting
. Make sure the building is wired for the Internet
. Consider the amenities
. Make sure the location will meet your future needs
. Check out the landlord
. Talk to neighboring businesses to see what they think of the area
. Decide how far you want to be from competition
. Make sure there’s food nearby

For additional information on The Reserves Network and its affiliates,  please contact: Brandon Thimke, communications manager, at bthimke@thereservesnetwork.com.