Do not commit to something you will probably not be able to deliver – and if you have no other choice, negotiate carefully the possible penalties and margins of error.
Estimating new jobs that will be created
Even if you have an excellent financial model, you cannot accurately predict the future in everything. Very often, incentive programmes are based on new jobs being created and provided for a certain period of time. Therefore, during the negotiations, you should be careful when discussing the penalties in case of non-compliance. This is the cautionary advice in an article on the cfo.com website.
Missed targets can lead to penalties and clawback of allocated funds. That is why you should always base your estimates on conservative numbers, especially as far as job growth is considered. Try to negotiate for some space because errors can happen.
Think in advance about publicity
Negotiations for incentives can be tricky. The company and the public sector officials must find a solution that enables maximisation of the advantage for the company but the incentive package will ultimately become public. Companies do not want to be condemned in the media and exposed to negative publicity because of overgenerous incentives which are followed by laying off employees. So company representatives need to be cautious.
You should always be able to communicate not only such benefits as jobs created and capital invested, but also your support for the community and training provided to the workforce.
-jk-