Quality of life issues increasingly affect relocations.

Major international businesses as well as emerging growth companies are placing increased emphasis on quality of life criteria in selecting business locations, according to a survey of over 700 senior executives conducted by Arthur Andersen.

"Business leaders seek locations where the quality-of-life will help them compete for talent," said Dan Malachuk, who advises businesses worldwide on location strategy and selection for Arthur Andersen, the Big Six consulting and accounting firm. In fact, one-quarter of the executives surveyed said they "should relocate to improve the quality of life for employees, if the location costs were manageable."

The Andersen study was done originally to help Fortune Magazine determine its annual list of the "Best Cities for Business." Following in-depth analysis of the "knowledge base" compiled for the survey, Andersen issued a special report explaining corporations' new concern with staff quality of life.

"As the Information Age gets more sophisticated, some companies think they can locate wherever their executives choose," Malachuk noted. "However, since attracting and retaining a top-flight workforce is a priority, many realize they must look at all of the key factors: good schools, safe neighborhoods, short commutes and career opportunities for both spouses - not just the CEO's preferences."

The Andersen researchers evaluated four categories: (1) business environment, including availability of skilled labor, ease of transportation and economic diversity; (2) costs; (3) family lifestyle positives, such as a good climate, presence of good schools and universities and cultural amenities; and (4) family lifestyle negatives, such as high cost of living and crime rates and long commute times.

The study and report underscored the importance of business location and its effect on performance. "Where to locate a company and its business units can have broad impact on how well the organization performs," Malachuk said. The 'Best Cities for Business' tend to be areas with strong lifestyle positives, yet large enough to build vital and diverse economies."

While quality of life is open to individual interpretation, a majority of the executives surveyed (53 percent) listed education as the number one quality-of-life issue. Concern over crime and safety, recreational activities and cultural attractions were the next most important issues.

"The factors contributing to improved performance are not complex as they relate to business locations," Malachuk said. "Quality-of-life amenities can help companies recruit the talent needed to grow."

For example, Space Imaging Systems, a satellite management firm which provides high-resolution space photos of earth to its clients, moved its international headquarters from California's Silicon Valley to Denver.

Several strategic reasons were of paramount importance, but company leadership also placed a premium on quality of life. "We chose Denver because its local universities turn out graduates with the very high skills levels we need," said the company's marketing director, Brian Webster. "We like the access to urban and suburban environments, as well as the low cost of living and the great outdoor recreation opportunities. All of these attractions will help us recruit and retain the 100 to 150 talented individuals we need at headquarters."

"Companies facing a location quandary would do well to state simply the workforce attributes needed to implement their key strategies," Malachuk points out. "An organization with a large number of family-oriental employees, for example, likely would opt for a smaller metropolitan area, such as several topping the Fortune list. But if the workforce needs a steady stream of younger employees, the amenities of major urban centers may be more desirable."

Arthur Andersen's Business Location Services practice operates worldwide, focusing exclusively on helping clients improve performance through location strategy, selection and implementation.

For a copy of the Arthur Andersen Business Location Services Special Report, call Rick Terrell at [phone].