HR’s Role in Business Expansion: Exploring Employer-Friendly States for Location Decisions

by Kathy Gromoll

LOCATION, LOCATION, LOCATION…These are the most famous words in the real estate business. These are also important words in deciding, as an organization, where to start, move, or expand your business. There are many traditional factors to consider when choosing location such as structure of company; business plan and projections; economy; market demand/changes; type of industry; competition climate; tax codes and tax incentives; business regulations, licenses, and permits; payroll, unemployment, and workers’ compensation requirements; access to adequate transportation and workspace; cash flow, financing, and banking; and labor access and costs.

But even taking into consideration all these various items, can we say this constitutes the whole picture? AustinPeopleWorks (APW) believes that there is yet another factor when choosing location – the human resources management/risk factor. There are some states that are just less friendly to employers. Some states and even some cities have laws, ordinances, or regulations that can be complex and sometimes contradictory, making it difficult and possibly even burdensome for employers to administer and comply. 

Some of these regulations, such as a higher minimum wage or mandating certain benefits, could actually increase the cost of doing business for an employer. Impact will also vary depending on an employer’s size or industry. If an organization is having a hard time recruiting, choosing a state with labor force availability could help, but choosing a state with low or no personal income tax can also be attractive.

Because a number of APW’s clients ask for guidance with multi-state operations, our team has spent a considerable amount of time researching each state to determine which ones have more scrutinized employment governance or more generous/costly state or city related employee benefits or requirements. Our state-by-state list is an internal tool with a unique rating methodology that helps highlight which states are more friendly than others to do business in. Since things are continually changing, even with this great resource, our team continues to verify and validate requirements by state when issues arise. This allows us to provide clients with a quick snapshot of the more common requirements and challenges that could make it more difficult or costly to navigate as an employer when considering expanding their location footprint or hiring an employee in another state.

By working with curated and valuable intelligence of the employment landscape for any new market being considered for entry or when considering hiring individuals within that area, APW can be a resource for scaling companies that need help navigating more successfully around all these considerations.

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If you’d like to know more about how APW can help you with your human resources needs, please reach out to us at https://austinpeopleworks.com/contact.