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Regional expansion: HR aspects

Светлана Желтова (Руководитель отдела по подбору промышленного персонала)
One of the most important strategic ways of development is regional expansion.  In order to make the right decision, a company should analyse and take into account such fundamental things as the region and the plan of development of the region. A company should formulate the attractiveness criteria for a region — location, size, value, resources and infrastructure opportunities, level of competition — and identify possible risks. Also a company must take into account the opinions and points of view of every manager of a future plant or LC (logistics centre) regarding a region’s characteristics,  and  confirm  it  by  figures  and long-term business forecasts. How can an HR manager get involved in the start-up project launch discussion? Certainly, during consideration of a region for the launch of a start-up project, important factors are the availability of raw materials, good logistics, sales channels, available capacity and infrastructure. Unfortunately, the role of the HR manager is more that of an adviser than a decision-maker. HR expertise is taken into consideration only at the moment of investment, when many bottlenecks in the labour market become  obvious,  so  for  the  HR  manager nothing remains but to accept these risks and develop responses.You  may  get  a  surprise  when  developing in a new region, for example terrible city  traffic,  the  impassability  of  roads, the predominance of residents of retirement age and the situation when half the working-age population has medical problems. Also, young people leave these places for the big cities because there is nowhere to study. No one could have foreseen that. Or could they? Evaluation of investment attractiveness  of  a  region  for  new  plant  or  LC must include the following aspects.
Overall economic performance of the region.

 Study the statistical materials posted on the official websites of the district or city administration, the local universities, and  city  news  portals.  Study  too  the population, its ethnic composition, the proportion of the working age population who are seniors, youth or people with higher education, unemployment, average wages (in comparison with the cost of living in this and neighbouring areas, as well as consumer prices). This information will be provided by the Employment Centre. Talk with specialists of the Employment  Centre,  analyse  what  applications come to them, and from what organizations (such information is often placed on a stand in the corridors).  Talk  about  the  complexities  of employment and the type of applicants. Also you should investigate what industries are there already, who are the main employers, which of them are your potential competitors in the workforce market. Which companies have been operating for a long time? Are they Russian or foreign companies? What is their size? Which industries are they in? Are they manufacturing or trading companies. Also it may be useful to find out about wage levels in the region and what specialists are most popular there, and the presence of, or planned reductions in, important industries.

Location of the region regarding to the transport hubs and major transportation routes.

A company should think not only about international and inter-regional logistics, but also about how staff will get to their place of work. As for the relocation of top managers and key specialists, for them the possibility to get home to Moscow or St. Petersburg will become one of the main issues during the employment negotiations. In  the  case  of  mass  recruitment  of  line staff with limited terms, what is the possibility of recruiting staff from nearby villages and adjacent areas through the provision of corporate transportation, housing?
The administrative factor and social responsibility factor.

Decision to build a warehouse or plant in a remote village will influence the future  of  the  whole  region.  It is because of taxes in favour of the region. It is the policy. Increase of investment attractiveness and attracting big companies. It is infrastructure development and possible opening of new schools. And finally, it is the cause of new jobs creation.

Professional level of local specialists.

The availability of a sufficient number of managers who have technical or logistical education, with experience using the Western approach and using practical management tools.The availability of skilled warehouse personnel (forklift drivers, data entry operators and etc.).
• Analysis of educational institutions (what kinds of specialists are trained?)  centres  for  retraining  and qualification, safety committees etc.
• Analysis of information about the proposed job, wage rates, compensation  &  benefits  level,  as  well  as resumes of possible applicants.
• Analysis of human resources in the region or adjacent regions (the presence of the required number of working-age people currently in the labour market).
The results of data collection, analysis and systematisation of the information  received  will  allow  an  HR manager to make an informed analysis.  In  the  future,  these  materials will  help  HR  to  continue  to  produce a clear and effective plan for search and recruitment, help create a favourable image of the employer, create attractive offers for job seekers, and provide top management with the necessary information to evaluate level of costs.


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