But the region will continue to have to make its case. And the irony is that success — or lack of it — brings more of the same: tech companies prefer to cluster together, development officials say, because it makes it easier to attract more employees when those employees see the region as a place where they and their families have options.
“First and foremost, technology companies in particular tend to locate where they have a large labor pool that suits there needs. If we start there, the next step is trying to figure out what is attractive to that talented work force,” said Steve Nutt, senior vice president of CityWide Development, which is Dayton’s economic development arm.
Workers are key
The key consideration for many companies is whether they can easily attract workers to the area. As unemployment has dipped nationwide, competition is heating up for top talent and corporations don’t want to locate to a city where they will have to beg and convince talented workers to relocate to their office.
Companies — particularly in the competitive technology sector — want to be a in a community where their workers want to live, said Nutt.
And those potential workers are asking things like what’s the lifestyle and recreational opportunities like? And if something changes at a job, are there several other nearby companies doing similar work?
Reynolds and Reynolds has about 1,300 Dayton-area employees and has stayed in Dayton since its early years as a printing company to now being a leading developer of software for auto dealerships.
“I think we’re similar to any business or organization,” Tom Schwartz, spokesman for Reynolds and Reynolds, said. “We want to be able to attract and nurture top-notch talent. We want to get the best ideas… so that we can continue to grow our business.”
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Technology companies are also evaluating if there are other similar companies in the area.
“They like to be located in clusters, where there are a lot of other companies of the same ilk around them so that they have access to those employees if they want to expand or get certain jobs,” said Tom Lawton, a site consultant in Weehawken, N.J., who visited Dayton in March.
Lawton said good living conditions are a priority for companies “but I can’t imagine that being an issue here. When I was there I was very impressed with the living conditions and with downtown Dayton.”
With the sharp competition for workers, the loss of Teradata might even benefit other remaining technology companies, said Bruce Langos, former chief operating officer for Teradata.
“I look at that as an opportunity for local companies because you’ve got some very unique talent there,” he said.
Whether considered first or last, government incentives are frequently part of a company’s decision as to whether to come here or to stay.
Taylor Communications — previously named Standard Register — got $1 million in combined incentives between the city of Dayton and Montgomery County, which helped pay for the company to move across the city and renovate a downtown Dayton office tower.
The deal came about a year after the company received $2.1 million in government incentives for improvements around the document management and business communication business’ Albany Street campus.
“The reality is incentives were not enough. It was really the city laying out why they should stay there and why it was a great home,” said Ray Watson, a partner with Dallas-based US Consults, who was the site selector who helped Taylor Communications on the deal for its new location in downtown Dayton.
Watson said the decision hinged on city of Dayton officials making a convincing case on why downtown Dayton was the right place for their employees.
READ MORE: 7 recent changes that influenced Teradata’s local presence
For the 600 Taylor employees who moved downtown, they’ve been working in an updated modern office with access to amenities, and morale has been up, said Carla Fiden, senior vice president of customer experience.
She said she’s seen the workers going out and enjoying the downtown community. Their Albany Street campus was two miles away, but seemed farther.
“Even less than two miles way, some didn’t know the breadth of offerings that downtown has,” she said.
For Teradata, economic development officials said the state or local region could have assembled some incentives for it to remain in Ohio, but that the company did not seem interested in staying.
Jon Keeling, press secretary for Ohio Gov. John Kasich, said in a statement that the state’s private development arm, JobsOhio, “repeatedly offered to discuss incentives and other issues with the company over the past year.”
“The company declined,” Keeling said.
Jeff Hoagland, president and CEO of the Dayton Development Coalition - local business leaders who seek to attract and grow businesses in the region - said Teradata officials did not seek incentives to stay.
“You’re doing better than playing defense”
Besides his work with Taylor, Watson said Dayton and southwest Ohio have been coming up more often in conversations with firms seeking new locations.
“You’re doing better than playing defense. The leadership you have in Dayton with (City Manager) Shelley Dickstein and (Economic development director) Ford Weber I think is making a difference,” Watson said.
Doing business in the digital age means even if a company’s clients are in major markets like New York City or Chicago, they don’t have to have employees working and living in the same geography.
Workers can instead be in places that make better financial sense - like Dayton - instead of living in communities where cost of living is two or three times as much.
Watson said companies like the universities in the Dayton region, the economic benefits of Wright-Patterson Air Force Base and the region’s reputation for employees with a good work ethic.
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Watson said the tech companies that are already in the Dayton area need to be regularly checked in on by their local government officials and elected officials, because when a company announces they are leaving, it’s too late to problem solve. Whatever regulation they’ve been concerned about or issue they’ve had has likely been going on for years and the decision to leave has been made, Watson said.
“You’ve got to make sure that people know you want them there … Most decisions to move or expand happen two years out. The reality is the last day was about about two years from the date the last day actually happens,” Watson said.
The loss of Teradata comes as the local business development community has become concerned about job reductions at the nearby campus for LexisNexis.
LexisNexis, like Teradata, is based locally because it was spun out of a large industrial company from Dayton’s economic hayday, in this case Mead. Teradata was founded in California, but for many years was a division of Dayton-based NCR. It established its headquarters here in 2007, ironically staying while their former parent company moved out in 2009.
LexisNexis is now owned by the RELX Group, which is based in the U.K. It has been shifting hundreds of jobs to North Carolina, which this newspaper has previously reported is a source of concern for local officials about the future of the company. Five years ago, reports said the company had 3,400 to 3,600 local jobs but last year was down closer to 3,000 local employees.
The research and risk management company has been looking for tenants to sublease one of the buildings on its campus overlooking Interstate 75. LexisNexis did not respond to a request for comment for this article.
Part of chasing after a tech talent pipeline also means being near a strong higher education system.
“Recent surveys bear this out and Teradata’s own comments concur with it. It’s getting harder and harder to find a skilled workforce,” said John Leland, vice president for research and executive director of the University of Dayton Research Institute.
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Partnerships with colleges are often a big draw to growing companies, Leland said. Establishing a connection with a school like UD provides opportunities for research assistance and allows for the “potential to develop the next workforce,” Leland said.
“Local universities are working more and more with industries to graduate more kids with degrees relevant to those industries,” Leland said.
UD has had some notable luck in attracting businesses to Dayton.
General Electric Aviation’s EPIScenter opened on campus in 2013 and Emerson opened its Helix center on campus in 2016. UD’s leaders haven’t been shy about their desire to attract more companies to campus. Leland said they still plan on being “selective” when it comes to deciding what organizations would be the best fit for Dayton.
“I think that we have to continue investing in the region to make it increasingly more attractive,” Leland said.
Tom Traynor, interim dean of Wright State’s Raj Soin College of Business, said partnering with local colleges gives companies a “steady, reliable workforce,” Traynor said.
“I think you develop a sense of trust. We trust these companies to help our students learn about careers in business,” Traynor said.
Wright State has developed relationships with a number of Dayton-based companies, including Reynolds and Reynolds, LexisNexis, CareSource and others, Traynor said. Local companies like hiring WSU grads because they tend to be from the area and want to stay here.
“They find Wright State students seem to be well prepared, they find our students to be fairly hard working and since a lot of our students are from around here they stay around here,” Traynor said.
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Scott Koorndyk, president of The Entrepreneurs Center in Dayton - a non-profit that gives facility and business guidance to local tech start-ups - said the region’s economic development officials have to move fast, and quickly.
“I think we’ve got to look hard at what we’re doing to get in front of these things,” Koorndyk said of Teradata’s move planned for early next year. “Candidly, we need to do a lot better job.”
The Dayton region is starting to become more startup friendly and is focusing more on offering more amenities and big development projects like the Dayton Arcade, Koorndyk said. But the region needs to create more of a “robust ecosystem” for small businesses and startup companies.
“We’re really doing a good job but we’re in the early stages of it,” Koorndyk said.
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