Location, location, location! Whether for new companies trying to establish their first center, or existing operations looking to expand or relocate their centers, the business of site selection and optimization presents some challenging issues. Our panel of experts indicated that the old ideas about call center site selection need to be rethought in light of today’s economic needs and demands. Offshore outsourcing, or simply searching for the cheapest building onshore can hurt your chances for success. Smart managers are considering a range of data to help inform their decisions. The experts’ research showed correlations between:
- Household income levels and cost per call: call centers located in areas of higher household income levels have a higher cost per call; and
- Household income levels and agent turnover: call centers located in lower income areas have a lower agent turnover than areas with higher household income levels
Current trends show that larger companies now focus on maintaining centers that support higher-level skill sets such as advanced sales, billing, IT support and their likes. To support the labor demands of these centers, larger companies with diverse skill set requirements may do better in larger metropolitan areas that offer a broader labor market than that found in less populated areas. Smaller centers that only support a single function may do perfectly well in less expensive, less densely populated areas. Our panel also noted that many companies are rethinking the wisdom of sending their call center functions off-shore and are seeking ways to optimize the functionalities of their on-shore centers.
The focus of managers should be fixed on the following three factors:
- Labor – Finding the right labor from both a cost perspective and a skill perspective
- Labor costs make up 70% – 80% of overall costs of operations for contact centers.
- Skill set: Labor drives the productivity of the center; thus finding people with the right skill set are as critical as labor cost considerations.
- Competition – before entering a market, know as much as possible about existing centers in the same hiring basin: size, type, function, labor costs, education level, turnover, etc.
- Status – opportunity to become an employer of choice for the community you are entering allows the newcomer to glean top performers in the area. However, if your compensation package is below the prevailing market levels, you will have a difficult time.
Generally speaking, labor markets are divided into three categories. They are:
- Tier 1 – Largest: Los Angeles, Chicago, Atlanta, etc.
- Tier 2 – Medium: Charlotte, Kansas City, Tucson, etc.
- Tier 3 – Small: semi-rural and rural areas
Overall, Tier 2 market areas tend to be best positioned for most basic-skilled operations and provide that “employer of choice” opportunity at the best competitive wage range. Tier 2 markets also fit most of those operations that have multiple functions such as sales, customer service, and technical support, and support call center sizes of 500 to 1,000 headcount.
Location is key. Make sure you really understand the areas you are considering before you commit.
Tip of the Month: When considering site selection, consider the functions of the center, headcount requirements, and diversity of skill sets needed before choosing a fixed demographic location. Also, check median household income levels, unemployment rates, and market saturation. Understanding these factors will help you find the best location.
This CallTalk Caramel was compiled and edited by Bruce Belfiore and Kamál Webb. It was drawn from a CallTalk episode with James Trobaugh and Mark Seeley, entitled “Assessing the Competitive Landscape for Market Expansions or Consolidations”. To listen to the entire episode click play below.
CallTalk is a monthly internet radio program featuring the most innovative managers and thought leaders in the customer contact field, interviewed by BenchmarkPortal CEO, Bruce Belfiore. “Caramels” distills “Aha!” moments from these interviews into practical, bite-sized nuggets to inform and assist you as a contact center professional.
