Site Selection for your centre

Colin Taylor, Chairman & CEO

Finding the near perfect place to put your new call centre can be a daunting task. It becomes far less onerous with a well thought out plan that embraces all the factors affecting your decision. Here’s what to do.

The boss has just asked you to head up the search for a new location for your contact centre. 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 centres long ago.”

Ten or 15 years ago we worried about moving our call centre off the subway line and today we worry about relocating the centre internationally. In both scenarios the key to finding the best location was 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 centre and have access to potential staff.

Of course the connection between labour and location is not and cannot be the only consideration, or if salary cost was king we all would have off-shored our call centres long ago. While labour and labour availability are critical considerations, they are not the only ones. Other factors require attention.

At Watts we developed a centre 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 labour which could be potential recruiting targets for the call centre.

Staff and saturation levels
Assessing the number, type, function and staffing levels of existing call and contact centres can provide guidance related to the level of saturation that call/contact centres 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 centre. But we also need to look at how many of them are presently employed in call or contact centres.

In my opinion the lower the saturation the better, though you can no longer find places without contact centres, you can find locations that have low saturation levels. We recommend to our clients that markets with more than six percent of their workforce presently supporting call/contact centres will represent on-going recruiting and retention issues, while less than three percent tend to be stable and much easier to operate within. Given that labour is the single greatest expense in a call centre 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 entitled ‘Site Criteria.’ Some of these suggested criteria are straight forward and others require some explanation.

Critical infrastructure
Infrastructure is critical to call centre operations. We expect the call centre to operate regardless of external factors. Of course, we can provision 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 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 longer and more capital intense option, though it can have the lowest total cost of ownership/operation over a five to 10 year operating window.

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
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 favourable to business than non-right to work states.

The second key factor 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 customers consent be secured; whereas in a one party state this is not required.

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 centre 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. One is real estate driven companies, often spun off from commercial real estate firms that see call and contact centres as desirable tenants for suitable vacant space. The second type is 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 centre 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 endeavour. In my experience building, operating our own centres and assisting clients to source more than 40 centre locations I have employed all of the above approaches. No one approach is the best.

Your choice will be, as mine have been, based upon 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 centre that will remain so for many years.

Site Criteria

  • Population local
  • Population 45 minute draw area
  • Workforce Local
  • Workforce 45 minute draw area
  • Unemployment %
  • Unemployed
  • Under-Employment %
  • Under-Employed
  • Participation Level
  • College/University
  • Military Base
  • Other Call Centres
  • # Type of Centres
  • Total Call Centre Seats
  • Call Centre Saturation
  • Proximity to airport
  • Available Real Estate
  • Estimated Operating Rent
  • Estimated Leasehold Improvements
  • Build to Suit’ Options
  • Population Growth %
  • Average Income
  • Average house price
  • Level of Education (% of Pop)
  • Quality of Life
  • Public Transit
  • Infrastructure- Public
  • Infrastructure- Electricity
  • Infrastructure- Telecom
  • Severe Weather Occurrences
  • Available Incentives
  • Incentives
  • Right to Work State
  • History of Union activity
  • Starting Call Centre Wage
  • Median Wage Customer Service

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