Site Selection for 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. You 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.
Ten or fifteen years ago we worried about moving our call center off the subway line. Today we worry about relocating the center internationally. In both scenarios the key to finding the best or ideal 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 of the current urban location the focus becomes where can we locate a center and have access to potential staff.
Of course the connection between labor and location is not and cannot be the only consideration, or if salary cost was king we all would have off-shored our call centers long ago. No, labor, labor availability are critical factors but not the only ones. Other factors require attention. At Watts we developed a center location matrix that considered 134 factors on a weighted score basis. This 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 of the factors to consider would include staff or workforce issues, what is the population, what is the employment/unemployment levels, workforce participation, college, university or military base presence all speak to potentially available labor which could be potential recruiting targets for the call center.
Assessing the number, type, function and staffing levels of existing call and contact centers locally can provide guidance related to the level of saturation that call/contact center represents in the local workforce. It is important to locate in a market where we can identify potential sources of employees and identify that there are enough potential workers to support the center. But also look at how many of them are presently employed in call or contact centers. In my opinion the lower the saturation level the better. This even though it is difficult to find locations 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 an on-going recruiting and retention issue. While under 3% tends to be stable and much easier to operate within.
Given that labor is the single greatest expenses 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. Other factors for general site consideration include:
Population 45 minute draw area
Workforce 45 minute draw area
Other Call Centers
# Type of Centers
Total Call Center Seats
Call Center Saturation
Call Center Saturation
Proximity to airport
Available Real Estate
Estimated Operating Rent
Estimated Leasehold Improvements
Build to Suit’ Options
Population Growth %
Average house price
Level of Education (% of Pop)
Quality of Life
Severe Weather Occurrences
Right to Work State
History of Union activity
Starting Call Center Wage
Median Wage Customer Service
Some of these suggested criteria are straight forward and others require some explanation. Infrastructure is critical to call center operations. We expect the call center 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 season. They are used to this. They have built buildings and infrastructure in expectation of these conditions. Businesses in the State of Virginia lose more work-days to snow than does 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 delay the project and build to suit. This is often a longer and more capital intense option. Even though that approach can proven to be have the lowest total cost of ownership/operation over a 5-10 year operating window.
The prevalent wages in the target market, associated level of education at that wage level, prevalence of union activity are all valid considerations. Ones you must assess and incorporate in building a budget.
If you are considering a US location you will find some additional considerations: Right to work states, which ironically really reflects that 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 opposite job creation still exist though the salad days 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 US 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.
Finding a new call or contact center or any back office function can be very challenging. That is why a number of firms and organizations have come into existence to serve this market. They generally fall into two camps: real estate driven companies, often spun off from commercial real estate firms that see call and contact centers as desirable tenants, and who seek new tenants for suitable vacant space. The second type is consulting firms who approach this from a form and function perspective. There are a number of excellent firms within each of these groups. The 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 has work less well in your current location. Start to compile a wish list for your new location. Either start to contact potential jurisdictions you feel align well with your goals and objects; or begin interviewing external firms that has the experience and capabilities to assist you in this endeavour.
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 and no one is the best. Your choices will be 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 center that will remain so for many years.
Let us know what you think of this article or if you need any assistance with developing a strategy to diversify your contact center by contacting us [email protected].