Expert Office Advice

The recent climate change in the financial markets has forced several companies to re-think their localities, opting instead to move out to cheaper real estate to increase margins and reduce costs. But are the moves coincidental or are companies still being shepherded to specific locations for their needs?

Well it seems that moving your business is a good idea, several locations around the UK are proving themselves to be beneficial for certain types of business. More northern cities for example are lending themselves very well indeed to companies such as call centres and offices where building charges are much lower compared to the likes of London and Birmingham. The long depression that these locations were faced with has meant that their growth has been delayed, forcing the locals to place their futures in their skills and abilities. This is evident in the recent moves of many of the internet based businesses, such as website designers, graphic designers and sound engineers who all seem to have congregated in the general area of Manchester.

Liverpool for example is quickly growing into the capital of call centres with companies such as Barclays bank, GUS home shopping and various online companies all having their customer services handled there by teams of experienced sales staff. Although you may be thinking that customer support should be handled by employees with no regional accents, recent statistics show that as a whole we aren’t bothered if our customer services agents have an accent or not so long as the call is handled in the UK. Indeed, many banking groups are moving their customer services back to the UK from countries such as Malaysia and India specifically for this very reason, and most of them are ending up in Liverpool or using a call centre based in Liverpool. The reasons for this aren’t clear, does Liverpool have something nowhere else does? Doubtful, the reason is more likely that property is cheap, labour is readily available and willing to work unsociable hours and once one centre opens, others will follow. This reasoning is based on the high street of all things. Clothing retailers will only open shops which are close or better yet, next to another high street clothing retailer. It makes sense, what is working for their competition can work for them too, saving thousands of pounds in lost profits from making the wrong decision. All businesses can profit from this location model, and in fact the closer you look the more of the same business you see in a given location. Night clubs are a prime example, you don’t often see just one night club on the street, usually more like three, four, five or more.

So based on the location model what can we see from this? Well we are able to see changing trends in business location. Previously London and it’s surrounding cities were the home of IT, and to a lesser part still are, but more and more companies are moving their computer based business to Manchester, rapidly accelerating it’s airport traffic to much higher levels. Could the difficulties with London’s airports be the reason? We’re not sure, but certainly faster deliveries are a benefit and with delays in freight on a daily basis at Gatwick it’s definitely not helping matters. The fact remains that the vast majority of computer wholesalers are now based in Manchester and its surrounding areas, companies such as Aria, Sphinx and SCC are just three but make up 24% of the UK’s PC component supply, others like IBM and Dell won’t be far behind.

In fact, after hours of research a viable trend is emerging which clearly indicates that many business ‘pooling’ trends are in the northern cities such as Manchester, Liverpool, Leeds and Sheffield. The printing industry has its new roots in Manchester and surrounding areas with the main business being printing.com. Printing.com is an American company which was franchised in the UK and all of its printing sent out from its central Manchester location. Others are in the general area also, Caralan is another large provider of printing services, this time lithographic print as opposed to printing.com with its digital print services. Again we can see that property prices are a huge factor here also, printing presses take up lots of space and storing tons of paper and card products also takes up more space than your average house, but with cheaper property prices the extra space is easily afforded and put to good use.

So it looks like property prices are a major factor in the presence of a specific market sector, but property is meaningless without the correct employee’s to staff the operation. In the northern territories there is certainly no end of staff who are able to perform any task set them, and they are also very eager to learn new skills to get the jobs on offer. Yes, the northern cities can provide companies with almost anything they need, faster, better and cheaper than its southern cousins. The trouble is that London has for decades been the centre of many businesses independent universe and change comes very hard, but even though it may take a while change is inevitable. Companies will choose to opt for the cheaper, faster, better option eventually, moving their operations to a more suitable climate for their individual needs.

Of course some industries will never move. The Fleet Street publishers will remain at their long term location, Harvey Street Doctors will want to keep their prestigious address and of course the UK financial centre will most likely be there until the end of time. In the meantime though other industries are on the move. Currently there are big plans on the horizon for a larger branch of ICI, SimsMetal Ltd recently opened Europe’s largest recycling plant in Newport, Walkers opened a new plant in Skelmersdale (replacing some of the work from the closed Swansea branch). With big names such as these, it’s not long before the smaller companies are going to follow their lead and tag along.

It’s not all good news though, for a company to move it’s workload it means another has to close, meaning lost jobs and income problems. A prime example of this would be the recently closed Burberry factory in Treorchy, South Wales. Although the people of the surrounding area will surely feel the aftermath of the move, we can once again see the locality effect. Burberry moved its production from its South Wales manufacturing outlet to China where it can make its garments at a fraction of the labour cost in the UK. This comes after several other high street designer labels have moved production to Far East companies over the last 6 months.

The trick is to keep your finger on the pulse of the industries you’re concerned with, read industry specific publications which can be obtained by visiting the following link; here you will find many trade magazines which are free to subscribe to and will help you to see what big moves are happening, and if they’re coming to a town near you soon. With the evidence currently available it would appear to be anywhere north of Birmingham which is exploding full of business opportunities for the moving company.