Soft location factors are ineligible for measuring and can be evaluated only subjectively. Hence, they don’t occur in the cost account of a company. Anyhow, they are of great importance within location decisions as they complement a business location’s hard location factors with further important aspects. On the one hand, soft location factors are based on people’s general perception of their life and work and mainly relate to the well-being and quality of life. They can have a significant impact on the hard location factor labour by influencing the recruitment of skilled workers positively or negatively. On the other hand, soft location factors also refer to the cooperation of a company with the business location’s public authorities.
Soft location factors are divided into two types:
Business-related factors that are especially important for a company's competitiveness, such as:
- Image of the location
- Education offers
- Economic climate (processing time of public authorities, political orientation of regions, countries, etc.)
- Competence of business associations (quality of offered services, etc.)
- Existing industry contacts of the location
- Innovative environment (networking and exchange of information between companies and educational institutions)
Personal factors that are important for the employees’ quality of life, such as:
- Cultural and recreational offers
- Leisure opportunities
- Quality of habitation and living environment
- Quality of educational and training institutions
- Environmental friendliness
- Represented values of society and social arrangement