Then reality set in. Executives of the information-technology company lost their enthusiasm when they realized the move would alienate many of SRA’s 1,400 employees. The Fairfax-based company ran head on into a challenge that companies, especially in congested and expensive Northern Virginia, face as they grow: how to find new space without hurting their ability to hire and retain employees. Workers might revolt if they suddenly have to add an hour or two to their commuting time. "The thing that really broke it for us is when we looked at where our employees lived,’’ says Chief Operating Officer Ted Legasey.

After searching for space in the Westfields area around Chantilly, the Reston corridor and near America Online around Route 28, SRA found that some sites were too remote even though prices were good. Others sites offered convenience, but were too expensive. Eventually, SRA dropped the consolidation idea and ended up renewing leases in Arlington, Falls Church, Fairfax, and Rockville. These regional hubs are closer to the homes of company workers.

Indeed, retaining existing workers is usually one of the most important considerations for companies looking to relocate or open new offices. Location can be an effective tool in recruiting and retention, particularly in specialized fields or the high-tech industry. In fact, 75 percent of companies seeking to relocate identify recruitment and retention of talent as their most important qualifier in choosing a location — or in choosing whether to relocate at all, says Dee Miller, senior vice president at The Staubach Company, a commercial real estate firm.

Like buying or selling a home, relocating offices creates a certain amount of employee stress. Staubach uses software to identify where employees live and tracks their commutes to sites employers are considering. Even if a company still decides to move, comprehensive planning can make the transition much easier. But not always, depending on how badly the work force wants to stay put.

Media giant Gannett Co. Inc. faces just such a conundrum of soothing employees upset with a planned move this July of its corporate headquarters and flagship newspaper USA Today to Tysons Corner. Gannett now occupies landmark towers with sweeping views of downtown Washington. The long-planned move to a new corporate campus hugging the Dulles Toll Road has been met with a resounding thud among the 1,800 employees affected. Complaints about the new office campus began almost from the day Gannett began planning for the move in the early 1990s. The gripes include traffic congestion at Tysons Corner, home of the region’s largest shopping mall, and the loss of spectacular Potomac River views. Throw in a few deflated egos — many USA Today reporters, even those not covering Washington politics, consider themselves Washington journalists — and it’s easy to see why the move isn’t popular.

Gannett has tried to drum up excitement by touting amenities such as a gym, restaurant, a softball field, and jogging trails. There’s also talk about a concierge service to run errands, pick up prescriptions or get a car inspected. Employees say they’d rather have a free shuttle running from the Metro, but that’s yet to be finalized. "We recognize the fact that Tysons is not the easiest place to get around,’’ says Steve Anderson, communications director for USA Today. "Once you’re there it will be a wonderful place and a wonderful place to work.’’

Gannett has tried to promote the positives about the move, with mixed success. Wall postings have been targets of graffiti asking "but where’s the Metro?’’ or similar barbs. The site isn’t near any Metro station. Every Gannett employee interviewed by Virginia Business, none of whom would talk for attribution, said he or she did not support the move. Some suggested that staffers would defect, although Gannett officials say that no one leaving recently has cited the move in exit interviews.

While relocating can be a recruitment and retention hell for companies, some find it a major selling point for keeping and attracting the most qualified talent. Unless some of its employees had the chance to relocate and try new things, "they probably would have left the firm,’’ says Anthony Greene, senior vice president for Boston-based Sterling Hager, a high-tech marketing firm. He and five employees will open the firm’s Virginia office on May 1. Greene says the move to Northern Virginia has been a recruiting and sales windfall. With most high-tech public relations handled out of Boston or New York, Sterling Hager found a largely untapped pool of talent in the region. Clients are also thrilled to have the firm within driving distance rather than a plane-flight away. Sterling Hager has signed a six-month lease for executive office space, reducing the need for a receptionist and allowing time for the staff to evaluate the best site for a permanent office.

A big question looming for corporate relocations, especially in high-tech centers such as Northern Virginia, is whether the current crash of Internet and telecommunications firms will affect relocations. One problem plaguing many dot-com companies is what Dee Miller of Staubach Company terms as having "big eyes.’’ Dot-coms expected their exponential growth to continue and bit off more than they could chew. They’re now faced with finding tenants to sublet excess space. Many of the companies subletting space are the same companies who are laying off workers.

Surprisingly, real estate experts say the contraction of Internet ventures has not hurt the real estate market much. Information technology companies, especially those that service the federal government, have been filling the void left by failed Internet start-ups and telecom companies. "The market still has an appetite," says Miller. "Even though there are companies going out of business or into bankruptcy or not growing as quickly as they anticipated, the space is being re-let.’’

Of course, Northern Virginia isn’t the only area attracting new growth. Capital One plans to add 8,000 workers by 2004 at three expansion projects — one in Northern Virginia at Tysons Corner and two in the Richmond area. The bulk of the jobs, 6,000, will be at West Creek, near the Goochland and Henrico County border. Before committing to the West Creek expansion, Capital One did extensive studies similar to those done by SRA that looked at commuting patterns, infrastructure, and the available work force. "We looked at a number of factors: the site itself, the site’s ability to handle our growth, the infrastructure, everything from roads to power and sewer, and on how convenient it will be for our associates to get to work," says Hamilton Holloway, Capital One’s corporate media director.

Capital One expects to have a prime location thanks to plans to speed up completion of the final stretch of Route 288 without tolls and seven months earlier than anticipated. The section from Powhite Parkway to Interstate 64 should ease the commute for the employees expected to be working at the financial service company’s 1.5 million-square-foot campus.

The Route 288 project is expected to be a boon to the area, completing Richmond’s beltway system and stimulating additional economic development. Capital One’s other commitment in metropolitan Richmond is an expansion project in the River’s Bend area of Chesterfield County. The company already has an office there, but is constructing a new building so it can double its work force, adding 1,000 new positions. Staying in the same office park offers convenience for Capital One’s existing employees. "Certainly, convenience for our associates is a big factor," Holloway says.

So, when it comes time for corporate expansion, location, location, location are still the buzzwords. Provided they have the employees’ concerns first in mind, of course.

Return to Virginia Business - April 2001