Factors influencing selection of the plant location

Availability of labor

Labor is an important factor in the production of goods. An adequacy of labor supply at reasonable wages is very essential for the smooth and successful working of an organization. The success of plantation industry in India has been due to, among other things, the availability of adequate labor at cheap rates. The labor required may be skilled or unskilled. It is skilled labor which influences plant location because unskilled labor is supposed to be available everywhere, specially in our country. But nowadays, the influence of skilled labor on plant location has lost some of its significance because labor has become mobile.

Labor, however, may be a deterrent factor in the development of industries in a particular area. The attitude of workers, union activities and industrial disputes drive away the existing factories and discourage new industrialists from locating new factories in particular places.