The Rural South's Drawing Card? There Are Many

By Lee Burlett

What is the rural South's main drawing card?

Those executives who have located facilities in the rural South will likely give you several different answers. Talk to one and he or she will point out the outstanding work ethic found in the rural South's work force. And it's not just hard working people that catch the eyes of companies locating in rural areas. In the non-metropolitan areas of the South, you will find a much lower turnover rate than in the metros. How low? On average expect a one to three percent turnover rate per month for every 500 workers. Compare that turnover rate to yours and where you are located now.

You will also find incredibly low workmen's compensation incidence rates. On average incidence rates in the rural South are about two percent, a fraction of the seven-plus percent U.S. average. And absenteeism rates also stand out when comparing the rural South work force and those found in the South's metro areas. On average, you'll experience about a 2.6 percent absenteeism rate with a rural South work force. Try comparing those numbers to metros located in the South and elsewhere.

To further point out the dedication rural workers in the South have toward their jobs, you only have to look at Vanity Fair. The apparel company, like other apparel companies in the rural South, has closed domestic plants and moved them to Mexico and elsewhere outside the U.S. In 1996, Vanity Fair announced it would close a plant in Alabama, putting 500 people temporarily out of work. The company would severance its 500-employee work force for a year. That's plenty of time for someone to decide they want to file a workmen's comp complaint. The company did not have a single one filed during that year.

Other executives discussing the rural South's main drawing card will point to quality of life factors. In a day when some major markets in the South are choked with congestion, the rural South offers a slower, easier alternative. As industries expand and relocate, quality of life often becomes a determining factor in site selection. Corporations find that when all other competing factors are equal, the lifestyle offered by a region becomes an important consideration.

For employees, the definition of quality of life has changed over the years. When industry was new in the United States, workers commonly migrated to urban manufacturing centers. The fast pace, towering buildings and sounds of progress fascinated Americans and new immigrants, and they wanted to live and work among the billowing smokestacks and clanging machinery.

Today that has changed. In fact, the U.S. Department of Commerce reports there are more manufacturing facilities operating in rural settings than in urban areas, a reflection of that latent human desire to get away from the congestion, high cost of living, crime and skyscraper surroundings of typical cities.

Another quality of life item associated with the rural South is time; time to spend with family and friends, or to simply participate in the numerous recreational and leisure activities found in the rural South. Typically, rural commutes are timed in mere minutes as opposed to an hour or more. The result is more time to enjoy leisure activities, which then results in less stressed employees.

One item that stands out for site searchers centers on the vast quantities of electricity found in the rural South. Once taken for granted, but no longer as a result of California's desperate energy crisis, power-hungry facilities are a natural fit in most of the rural South. Of course, non-metro areas of the South are in attainment with federal clean air laws, something you won't find in many of the South's major metros.

While California utilities have had their problems, not only delivering electricity but on the balance sheet as well, you won't find that situation in the South. Economically sound utilities with massive generation capacities serve all over the rural South. New power plants have been built at breakneck speed over the last several years throughout the region. Furthermore, the American South still has an advantage overall in terms of utility costs.

Besides an outstanding work ethic, a superb quality of life and vast resources, there's one other factor executives who operate facilities in the rural South point to: low operating costs. With the possibility of a recession looming, this may indeed be the rural South's most important drawing card.

Most everyone knows that costs -- whether start-up, operational or labor, have traditionally been far lower in the South than in other regions of the country. The business reality of that equation has been one of the major reasons companies have migrated to, grown and expanded in the South. It was a simple business decision, one that thousands of companies have taken advantage of over the years to become more profitable.

Fewer people realize, however, that operating costs in the rural South are many times lower than costs found in the South's major metropolitan areas. In the non-metro South, on average there is a one-third differential in land costs, construction costs and infrastructure costs. That however, is simply a rule of thumb. If you look closely, you will find that there are plenty of publicly-owned industrial parks in non-metropolitan areas of the South where land can be purchased for as low as $4,000 an acre.

And here's another item that can be applied to the corporate bottom-line. You will not find better incentive packages than what's available to companies choosing a non-metro South location over a metro South location. Today, it is more politically correct than ever for political leaders in the South to assist their rural regions in creating jobs and investment. Why? Many governors in the South, especially those who govern states with one or more major markets, are listening intently to the slow growth movement that has mushroomed in many of the South's major markets.

In fact, slow and anti-growth groups found in many of the South's major metros are more numerous today than ever before. The politicians are listening and one of their solutions is to make it as easy and as profitable as possible for companies locating in their rural regions. In other words, 20 years ago state economic development officials in the South may have answered with a "Why?" after a company official indicated they were interested in a rural location. Today, those same state officials will jump and answer, "How can we help you?"

Drawing cards? The rural South has them. In the following pages you will find many more reasons why a location in the western region of the rural South is an excellent move for the right company.