Sparking interest in the Spokane region – Business recruiters looking to attract small companies

BF Goodrich received a warm welcome when the company came to Spokane in 1998. BF Goodrich received a warm welcome when the company came to Spokane in 1998.

Tom Sowa
Staff writer

http://www.spokesmanreview.com/business/topstory.asp?ID=14845

In 1998, Spokane’s civic and business leaders acted like they’d won the lottery when global aerospace firm Goodrich announced it would build a new manufacturing plant on the West Plains. Six years later, many say they’d love to stage another splashy event to announce hundreds of good-paying jobs coming our way. The possibility of that happening soon has become less likely, though, as area economic development groups say they’ve focused more energy on targeting smaller companies rather than competing for the hard-to-catch heavyweights. Steve Griffits, the president of Coeur d’Alene-based recruitment agency Jobs Plus, said he prefers the analogy of trolling a lake, trying to net several small but promising firms, rather than spending most of his energy hoping to land a big fish. In the past decade, a large share of North Idaho’s recruitment success has resulted from appealing to small or midsized manufacturing firms located in California, said Griffits.

Smaller companies take less time

Area recruiters still want to attract good jobs by recruiting larger firms, but the goal now is to think small and hope for the best. "We have to be consistent in what we do," Griffits said, "making sure the area effectively markets its key assets: a high quality of life, good supply of labor and affordable costs." Spokane’s recruitment pros have also adopted the "smaller is better" strategy in part because of the weakened national economy, but also out of practicality. Jon Eliassen, president and CEO of the Spokane-area Economic Development Council, agreed with the "quality over quantity" tactic of recruiting companies that will start small, but will remain in the area and grow. "The big company announcements make the headlines," said Eliassen, who took over the EDC job after working at Avista Corp. for more than 20 years. "But honestly, the better approach is to base your recruiting on companies of between 15 and 30 workers," he said. Smaller companies often take less time and effort to recruit, he said. Bob Potter, the former president of Jobs Plus who now is recruiting companies on behalf of a regional economic-development program, agreed. "Getting a larger company to move here takes much longer than getting smaller ones," he said. "The process involved in moving a large operation is huge and takes a very long time." An example was the decision by Buck Knives to move from California to Post Falls. It’s taken about four years for the manufacturing company to start its relocation following its initial announcement that it would move. The company will finish building its North Idaho production site next year, eventually creating 200 jobs. And despite the hype accompanying their announcements, large companies sometimes don’t reach their target job numbers. Goodrich, for instance, originally promised about 250 high-wage manufacturing jobs. After six years, the company is just above 100 workers and doesn’t expect to employ more than 170 here. That revised target, said Goodrich spokesman Ben Duncan, is due to evolving company technology that reduces the number of workers needed at the site, which makes carbon brake pads for aircraft.
Royal Caribbean used consultant

Big fish are still tempting targets, said Potter, who now is with the Inland Northwest Economic Alliance. The latest large company considering an expansion of new jobs in Spokane is Royal Caribbean Cruises Ltd., a Miami-based cruise ship operator. The company recently said it would build a 1,200-job reservation call center either in Eugene, Ore., or Spokane. Neither Potter nor anyone at the Spokane EDC initiated Royal Caribbean’s interest. Its interest resulted from the common practice among large companies to rely on outside consultants who help look for potential expansion sites. In this case, the cruise line went through a months-long search, aided by a New Jersey consultant, before narrowing its choices to a few cities, including Spokane. Only at that point were local officials given a chance to offer incentives designed to persuade Royal Caribbean to select Spokane. Officials at Royal Caribbean would not comment on how the company selected Spokane or Eugene, other than noting that it needed to find a Pacific Time zone site to reach more customers. John Boyd, owner of The Boyd Co., of Princeton, N.J., the consulting company that worked with Royal Caribbean, wouldn’t be specific about the site-selection criteria. "Obviously, they start with quality of life and cost of operation," Boyd said. "But every company has its own selection criteria. They look for what they need." Even if local economic development officials had known of Royal Caribbean’s interest, they might have had a hard time pitching the Inland Northwest. "If you ever try to do a cold call to a large company like that, you’ll never get to talk to the president," said Potter, who in 15 years at Jobs Plus helped recruit more than 70 companies to the region. "That’s why I much prefer going after the smaller or mid-sized companies. You can get right to the president and work with the company, acting directly as their consultant," he said. "When you can convince a small company and its president to move together here, you get their full commitment," Potter said. In addition, small companies diversify the economy, he said. Rathdrum-based Bay Shore Systems is one of the small companies Potter attracted to the area. Bay Shore moved from San Francisco to Rathdrum in 1996, and since then it’s grown from 15 workers to about 30 today. Company President Herb Minatre said the costs of doing business in California had put his company into the position of needing to look outside the Bay area. Once he realized that "For us, moving 1,000 miles was about as much work as moving 30 miles," he began looking at options in the Northwest for his company, which makes large foundation-drilling equipment. His choice came down to Roseberg, Ore., and Rathdrum. Minatre said a key factor in the selection was the warm welcome Rathdrum officials, and Potter, provided his company.
Economic upswing should help

Chances for area recruiters to land more fish — large or small — could improve in the coming months as the national economy picks up steam. Economic development specialists say they’re seeing signs that major companies are beginning to consider corporate expansions or relocations. "It’s not very strong yet, but there’s some movement," said Mark Klender, a real estate consultant with Deloitte & Touche in Los Angeles. The improving economy played a part in a recent decision by US Bank to build a 500-job call center for its credit-card services division in Coeur d’Alene, area officials said. That expansion resulted from plans by the Minnesota-based bank to create a second U.S. call center site to serve its domestic customers. The bank’s other service center is in Fargo, N.D. Just like Royal Caribbean did, the bank hired a consulting company that started with a list of 3,000 potential U.S. cities. Going offshore was not a consideration, due to the importance of ensuring quality responses to its customers, said Rick Barton, the Idaho and Eastern Washington region president for US Bank. Criteria included the availability of quality workers, a location outside the same climate and time zone as North Dakota, and a city where no more than 2 percent of the work force was employed in call centers, Barton said. Industry studies have shown that in cities where more than 2 percent of the work force is employed by call centers, there’s more job churn and employment disruption at those businesses, he said. Barton said three cities were on the bank’s final list. The other two were in Oregon and Washington. Though Coeur d’Alene and Jobs Plus had little initial role in getting on the bank’s radar screen, the closing job by Griffits and area officials made a big difference in the bank’s ultimate decision, Barton said. Joe Tortorelli, a former Washington Water Power economic development specialist, said the US Bank decision is important for the area, not just for Coeur d’Alene. "The big sitings (like US Bank) get national attention. And they draw the smaller companies that are real bread and butter," Tortorelli said.