CORPORATE OFFICE LOCATION SEARCHES AND THE CASE FOR HAMPTON ROADS: A SITE SELECTION CONSULTANT’S PERSPECTIVE*
Why Hampton Roads, Virginia adds value for Healthcare Industry Back Offices
Hampton Roads, Virginia, with a population exceeding 1.7 million, is the largest metro between Washington, DC and Charlotte, NC. Connecting the Atlantic Ocean with the Chesapeake Bay and James River, this waterborne region comprises 17 localities. The Hampton Roads Alliance represents 11 of these including the cities of Virginia Beach, Norfolk, Newport News, Chesapeake, Poquoson, Suffolk, Franklin, Hampton and Williamsburg and the counties of Southampton, James City, York and Isle of Wight. Hampton Roads boasts a vibrant, diversified economy in the office sector, including financial services, headquarters, and other corporate functions.
Several well-regarded colleges and universities, including William & Mary, Old Dominion and two historically black colleges and universities, attract a diverse student body and faculty, both nationally and internationally as well as being important players in innovation across a spectrum of leading technologies. These institutions, along with local community colleges, provide an excellent source of talent within Hampton Roads. Generating more local job opportunities for graduates is an important economic development priority.
Hampton Roads’ proximity to the nation’s capital plus easy access to the Northeast corridor are geographic assets. These, in combination with a deep talent pool, business and living costs far lower than the Washington to New York City corridor, and welcoming state and local governments add up to an impressive value play for the many companies who have set up office hubs in the region.
Hampton Roads has a robust business services ecosystem, a customer solutions centric workforce and a sizable regional healthcare systems presence. Together, these provide a highly qualified workforce combining processing, concierge, and health system knowledge critical to the complex world of medical payment / revenue cycle management and patient servicing.
* In April 2020, the site selection firm of Wadley Donovan Gutshaw Consulting (WDGC) began a 6-month study assessing the locational resources of Hampton Roads for corporate office entities that could capitalize on the region’s talent pool and other assets. Healthcare back office was one of the sectors identified as a good fit for Hampton Roads. WDGC was selected to perform this study because they have been advising corporations on business location strategy for four decades and have performed numerous site selection assignments involving corporate offices.
300-mileradius
HAMPTON ROADS, VIRGINIA
Hampton Roads: Where critical office project requirements can be met at a price point that is essentially unmatched by peer metropolitan areas, along with offering an attractive, affordable, coastal lifestyle.
Healthcare payments and customer solutions back offices, captive and outsourced, are very well matched to Hampton Roads’ talent and office market assets. Staffing requirements of 300 to 500 headcount can be readily recruited and sustained.
Hampton Roads has a strong healthcare industry ecosystem. The region has been successful with back-office project expansions based on the local talent pool, quality of life, cost advantages and reasonable access to Northeastern cities, focused particularly with respect to and near New York City.
HAMPTON ROADS AS A HEALTHCARE CUSTOMER SOLUTIONS CENTER OF EXCELLENCE
• Scalable talent (300-500 HC)
• Service desk/concierge experience
• Back office / processing familiarity
• Payroll costs
• Health care experience
• Pool of recent graduates of local 4 and 2 yr. schools, mix of skills sets
• Seasonal / PT workforce
• Telecommunications infrastructure (site by site factor)
• Occupancy costs
• Balance: workforce base and moderate cost
• Air Access: non-stop preferred
• Moderate scale office supply (25,000-50,000 SF)
No critical red flags observed.
No critical red flags observed.
SNAPSHOT OF KEY ADVANTAGES
SIGNIFICANT AND EXPERIENCED WORKFORCE:
Hampton Roads boasts a bountiful supply of talent possessing experience in pertinent functions (e.g., claims, customer service, billing/accounting, service desk, etc.) within health-related industries (e.g., insurance, consulting, medical technology, patient care). This skills base is far from saturated.
TRANSFERABLE AND RELEVANT SKILLS.
A significant aspect of healthcare industry process transformation focuses on improving customer-centric experiences. Concierge-level support for patients / consumers in navigating care and insurance is becoming paramount, and the region has a substantial number of underemployed customer facing workers (e.g., some of those working in existing call centers and in the hospitality industry) who could readily be trained to learn a company’s processes, technology, and performance metrics and provide the empathy that patients need and appreciate.
GEOGRAPHIC PROXIMITY – NORTHEAST CORRIDOR.
Hampton Roads is within driving distance of Northern Virginia and Washington and convenient to the large insurance and healthcare systems of the Northeast. The Mid-Atlantic culture is familiar to Northeast decision makers and relocatees, an important intangible. Combined with moderate costs not easily matched within 300 miles of Manhattan, the region is far enough to provide a distinct operating culture, yet close enough to attract critical relocating talent (within a weekend commute zone) from the source geography, whether it be New York City, Northern New Jersey, Connecticut, Philadelphia or even as far as Boston. All of these areas are served non-stop from Norfolk International Airport, and some are drivable in a pinch.
OPPORTUNITIES FOR OFFICING ACROSS THE SUBMARKETS: One of the outstanding assets of Hampton Roads is the flexibility of officing opportunities across multiple submarkets, each offering a variety of price points, amenities and local talent nuances.
PRESENCE OF SIMILAR
OPERATIONS:
Companies often base decisions on paths laid by others. Health insurers with operations in the area include Anthem, Optima Health, and The Colony Group. Health technology operations include Securis, Ciox Health, and Intellect Solutions. In conjunction with the large regional health systems (e.g., Sentara, Bon Secours) having back-office operations locally, there is a sizable ecosystem in place.
SALARY COST ANALYSIS + SAVINGS
For a healthcare industry back office, the salaries in Hampton Roads offer significant cost advantages. For example, in comparison to Washington DC, the blend of occupational salaries is 25-30% lower in Hampton Roads. Significant savings are also achievable versus major healthcare operational and insurance centers such as Philadelphia, New York, and Boston.
Median Weighted Salary Index (U.S. = 100) By Occupational Job Family
LOCATION SOLUTIONS
The region can support 300-500 headcount operations focused on healthcare customer solutions occupational employment within a 30-minute drive of most sites. Notably, location quotients are strongly supportive of this occupational segment with concentrations in line with to up to 10% above the national proportion, suggesting a substantial but not over-saturated talent base.
Hampton Roads is geographically compact, providing flexibility for companies to consider sites in varied environments. The bulk of the region’s talent base and other locational resources are accessible within a 30-minute commute of any office property.
IN CONCLUSION
What makes Hampton Roads a distinctively attractive location for healthcare back-office operations?
1. A deep talent pool, both experienced and entry level, exceeds local demand – an enviable position in times of national talent shortages. Over 36,000 experienced workers, augmented by a substantial base of underemployed customer-facing workers that can be trained to learn a company’s processes, technology, and performance metrics and a significant number of 2-and 4-year college graduates in health-related fields
2. A vibrant local ecosystem: healthcare systems, insurance operations, innovative healthcare technology, higher education and training resources
3. The labor market features a core base of companies engaged in health-related back-office activities but the market is far from saturated. There is plenty of excess labor market capacity for an incoming healthcare back-office employer. The favorable labor supply / demand equation will continue well into the future, resulting in minimal cost escalation pressure and relatively low turnover
4. Hampton Roads comprises many submarkets offering varied combinations of operating environments and skill mixes; office space is available at modest cost compared to major metro areas
5. Companies now operating in Tier One metros such as Boston, New York, and Washington D.C. could realize payroll savings of up to 25-30%
6. The region’s superior telecommunications infrastructure allows companies the flexibility of operating from physical offices, work at home, or hybrid model. Close to 100% of Hampton Roads households have access to broadband
7. Hampton Roads lies within a convenient travel radius of Mid-Atlantic / Northeast metros and has non-stop air service to a number of major gateways
8. An incoming employer will find a business-friendly government and modest tax base. VA is the 13th lowest state in terms of per capita tax burden
9. The state and local communities have a demonstrated pro-business track record and are eager to support this industry
10. A healthcare back-office enterprise that needed to fill selected senior level positions via national recruiting could easily do so in Hampton Roads given the attractive lifestyle, moderate cost of living, and comparable job opportunities elsewhere in the region
A favorable labor market, moderate cost of operations, and strong industry support infrastructure make Hampton Roads a genuine value proposition for healthcare industry back-office operations ranging from customer service and help / service desks to medical records technology and revenue cycle management
