Why Big Businesses Opt for Head Office Locations Outside London

Introduction

The decision-making process behind where to locate a head office is a crucial one for any business, particularly for large corporations. London, despite its reputation as a global financial and cultural hub, is not always the ideal location for all companies. This article explores the key reasons why many big businesses choose to establish their headquarters outside of London, focusing on factors such as staff availability and costs, property prices, and the benefits of choosing smaller cities or towns.

Staff Availability and Costs

One of the primary factors influencing the choice of location for a big business is the availability and cost of qualified staff. For instance, the presence of renowned research institutions in cities like Cambridge and Edinburgh attracts top-tier talent in scientific and medical fields. Similarly, the growth of the film and television industry in Manchester and other new hubs in the UK provides employment opportunities for professionals in creative industries.

Moreover, the cost of living in London is notorious. It can be extremely expensive to find a place to live close to the city, and commuting can be time-consuming and costly. For example, employees with a salary of ￡50k in Inverness, Scotland, one of the UK’s fastest-growing cities, can live comfortably and afford a house with a nice garden. Conversely, even a ￡100k salary in London might only secure a two-room apartment. This stark contrast in cost of living is a significant deterrent for businesses and their employees.

Property Prices and Space Availability

The property market in London is notoriously expensive, with few available parking spaces and limited room for expansion. By moving outside of London, businesses can secure larger, more modern offices with ample parking. Some regions offer financial incentives to attract businesses, which can result in substantial cost savings and better facilities. For instance, a business can choose to build a new office or relocate to a pre-existing one at a fraction of the cost compared to London.

Talent Pool and Market Monopolization

Another significant advantage of choosing a location outside of London is the accessibility to a broader talent pool. When a business becomes one of the largest employers in a smaller city or town, it can monopolize the local labor market. This gives them the ability to attract top talent and experienced professionals, as well as recruits from local universities and colleges. Smaller towns with a high number of local graduates and experienced workers can offer a more diverse and experienced pool of candidates compared to the more competitive environment in London.

Conclusion

Choosing to locate a head office outside of London offers numerous advantages to big businesses, including easier staff recruitment, lower operational costs, and access to a larger and more diverse talent pool. These benefits can lead to improved productivity, better talent retention, and long-term financial gains. As more companies recognize the advantages of this strategy, the trend towards off-London headquarter locations is likely to continue.