Site Selection for Your Contact Center
By: Colin Taylor, CEO & Chief Chaos Officer
Finding the near perfect place to put your new Call Center or Contact Center can be a daunting task. It becomes far less onerous with a well thought out plan that embraces all the factors affecting your decision. In this post, I am going to explain what to do in terms of selecting the site location of your Contact Center.
The boss has just asked you to head up the search for a new location for your Contact Center. You are flattered by the confidence that the boss has in you and are confident that you can accomplish this task, just as soon as you figure out what to do. The business of site selection has changed considerably in the past decade.
“If salary cost was king we all would have off-shored our Call Centers long ago.”
10 or 15 years ago we worried about moving our Call Center off the subway line and today we worry about relocating the center internationally. In both scenarios, the key to finding the best location is tied to finding or keeping staff. In an intra-city move, you are concerned with where you can locate and retain most of your staff. In a search to find a location outside the urban area, the focus becomes where to situate a center and have access to potential staff.
Of course, the connection between labor and location is not and cannot be the only consideration - if salary cost was king we all would have off-shored our Call Centers long ago. While labor and labor availability are critical considerations, they are not the only ones. Other factors require attention.
In the past, when I was President at Watts Communications, we developed a center location matrix that took into account 134 factors on a weighted score basis. It created a range of more than 500 basis points from the worst possible to the best possible scores. It is important that you develop your own matrix for evaluating and assessing potential locations.
Some factors surrounding staff or workforce encompass numerous issues. They span population, employment/unemployment levels, workforce participation, college, university, or military base presence. They all speak to potentially available labor which could be potential recruiting targets for the Call Center.
Staff and Saturation Levels for Finding an Optimal Contact Center Location
Assessing the number, type, function and staffing levels of existing Call and Contact Centers can provide guidance related to the level of saturation that Call/Contact Centers represent in the local workforce. It is important that we locate in a market where we can identify potential sources of employees and that there are enough prospective workers to support the Center. We also need to look at how many of them are presently employed in call or Contact Centers.
In my opinion, the lower the saturation the better, though you can no longer find places without Contact Centers, you can find locations that have low saturation levels. We recommend to our clients that markets with more than 6% of their workforce presently supporting Call/Contact Centers will represent on-going recruiting and retention issues, while less than 3% tend to be stable and much easier to operate within. Given that labor is the single greatest expense in a Call Center and the cost to recruit a single agent exceeds $3,000, finding a stable and easily maintained environment is highly desirable.
Factors for general site consideration are listed in the accompanying table below entitled ‘Site Criteria.’ Some of these suggested criteria are straightforward and others require some explanation.
Critical Infrastructure
Infrastructure is critical to Call Center operations. We expect the Call Center to operate regardless of external factors. Of course, we make provisions for business continuity through back up power, redundant telephony connectivity etc. But the single largest factor influencing operational survivability will be the location and its pre-disposition to floods, power outages, hurricanes, snow etc.
Of course, we must remember that some locations such as the Canadian Atlantic region may get a great deal of snow each winter season. They are used to this and have built buildings and infrastructure in expectation of these conditions. Businesses in the state of Virginia lose more work-days to snow than do businesses in Prince Edward Island.
Real Estate Considerations
Real estate in any considered location is also critical. If you have found a great market with no available real estate that is suitable, then your options become delaying the project in hopes that something suitable becomes available (unlikely in a small market) or to delay the project and build to suit. This is often a long and more capital intense option, though it can have the lowest total cost of ownership/operation (TCO) over a 5 to 10-year operating window.
Budget Considerations
The prevalent wages in the target market, associated level of education at that wage level, and prevalence of union activity are all valid considerations and ones you must assess and incorporate in building a budget.
U.S. Site Factors
Right-to-Work vs. Non-Right-to-Work:
If you are considering a U.S. location, you will find some additional considerations; Right-to-work states ironically really reflect the opposite of the right to strike. Right-to-work states tend to be significantly more favorable to business compared to non-right-to work states.
One-Party vs. Two-Party:
The second key factor when considering locating a Contact Center in the U.S. can be one-party versus two-party states. This refers to the number of parties that need to be informed that a call is being monitored or recorded. Of course, a two-party consent state will require that the customer's consent is secured; whereas in a one-party state this is not required.
Incentives: Tax Credits and Grants:
Incentives for job creation still exist, though the salad days are over of governments handing out millions without any real basis for accountability or reconciliation. Today the available incentives are closely tied (where present) to long-term employment and are generally available as tax credits in the U.S. and training grants within Canada. In both countries, this is positioned as ‘recoverable’ meaning that the government can recover these dollars should the company fail to deliver the agreed employment levels.
Advisory Organizations:
Finding a new Call or Contact Center facility or any back-office function can be very challenging. That is why a number of organizations have come into existence to serve this market. They generally fall into two camps.
1) Real estate driven companies, often spun off from commercial real estate firms that see call and Contact Centers as desirable tenants for suitable vacant space.
2) Consulting firms that approach this from a ‘form and function’ perspective.
There are numerous excellent firms within each of these groups and your determination of which is better for you often comes down to the level of specialization and uniqueness your Center possesses. The more specialized in terms of staff, space requirements and the smaller the size, the less interesting it will be to a real estate based firm.
Before you do anything to find a new location, assess what has worked well and what hasn’t in your current location. Start to compile a wish list for your new location. Then you can begin either to contact potential jurisdictions you feel align well with your goals and objectives or interview an external firm that has the experience and capabilities to assist you in this endeavor. In my experience building, operating our own Centers and assisting clients to source more than 40 Center locations, I have employed all of the above approaches - no one approach is the best.
Your choice will be, as mine has been, based on the specific goals, objectives, timelines, and budgets of the project. So long as you do your homework you can succeed in creating a productive, efficient, and cost-effective location for your new Call Center that will remain so for many years.
Site Criteria
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