Location for Manufacturing Unit: Labor and Government Policies

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Choosing a new location for a manufacturing unit is a crucial decision for any business including the small and medium ones. No matter how many resources you have, investing those in the wrong place can get you losses instead of anything else. Making this decision should depend on quite a few factors and here are some of those.  

The available labor force

It should come as no surprise that there is a shortage of trained personnel. Employers are having a difficult time finding the labor they require to be productive because of the retirement of boomers and the fact that the younger generation is woefully unprepared in STEM sectors. It is standard practice for site selection consultants who are both experienced and professional to incorporate an examination of the local labor force that is available into their recommendations. However, you should also investigate the educational and training resources available in the area to prepare the workforce of the future. You should also determine whether or not these resources are capable of providing the amount of trained personnel that your company will require in the years to come.

Cost

Costs are a factor that should be taken into account whenever a company makes a decision. When commissioning a new factory for rent chonburi (โรงงานให้เช่า ชลบุรี, term in Thai), it is essential to make a detailed list of the expenditures that you anticipate incurring:

Building, Leasing, or Purchasing: Should a business construct, lease, or purchase? Create a map of various scenarios. The expenses of retrofitting or reconfiguring an existing site can increase to the point where it seems rational to create a new site. Although it may always appear to be more cost-effective to rent or acquire an existing facility rather than to construct a new one, this is not always the case.

Labor: When it comes to labor, the so-called “Great Resignation” that took place during the pandemic and continues to this day has altered the dynamic of labor costs. Employees are less likely to take jobs that pay poorly and have work schedules that are difficult to foresee.

Taxes: Tax rates are another aspect that might be unpredictable; however, professionals who are familiar with the local economic and regulatory environment may be able to provide you with projections on tax rates and costs for your company in the location that you are contemplating investing in.

Incentives and policies enacted by the government

In the process of narrowing down your list of potential locations, incentives become an increasingly important factor in the decision-making process. There is a possibility that state and local governments have adopted legislation that provides incentives to all potential employers. Alternatively, they may be able to produce a bespoke package of incentives to entice your company to relocate to their city or state, provided that they do not violate any provisions of the law. These may include reductions in the expenses of building and land, improvements to infrastructure, reductions in the rates of utility companies, job training programs, tax reductions, and other similar initiatives.