February 1999
50 States And EU Demographics For Site Selection
BY KATIE S. BURDORF, THE WADLEY-DONOVAN GROUP
It is estimated that more than 3 million people work in more than 95,000 call centers
around the world, logging approximately $800 billion a year in business.
Call centers are still the most locationally active of all industry sectors, with no
slackening in the foreseeable future. Growth continues to spiral upwards, especially in
customer service. After all, customer service is king and queen and cuts across industry
boundaries with no let-up on the horizon for the profusion of growth. For the good firms
that are now competitive on wages, benefits and human resource practices, there is also
less turnover.
Labor Shortage Issues
Because of this explosive and radical growth, there has been an extraordinary velocity of
location decisions. There is so much activity that companies are stumbling over one other
with sometimes almost simultaneous announcements in a single area. There is pressure for
larger units due to this high demand, but the "mega center" concept is
constrained by tight labor market situations almost across the board. The need is so great
that it puts undue pressure on time for these projects, as well.
Some call centers are addressing the labor shortage issue by opening smaller facilities
with less seats (100+). This fact alone offers greater geographical diversity (a greater
amount of smaller areas), with untapped labor pools yet greater competitive exposure.
Companies are also paying closer attention to where the site is positioned relative to
labor pools. It is very rare to find all desirable attributes in a single location, so
trade-offs are a necessity. Some companies are going to a hub-and-spoke or satellite
configuration strategy. Others are introducing computer-telephony integration (CTI) and
more IVR (interactive voice response) technologies. Still others are stockpiling "hot
sites" by screening areas ahead of their need.
Aggressive human resource practices are another way companies are dealing with the
tight labor market situation. They are using extensive recruiting methods with bonuses and
creating more favorable internal work environments. Companies such as Nortel and L.L. Bean
even have ergonomic specialists on board. From acoustics, chairs, lighting, colors and
workstations to plants and stretch breaks, companies need to do everything they can to
give themselves a competitive advantage.
Many companies are implementing off-shore strategies as well. In all provinces in
Canada, call centers are cropping up. From Dublin, Ireland, Compaq serves a pan-European
market. Scotland alone has more than 17,000 people employed in more than 150 call centers.
Brussels, Belgium was the winner for Western Union, which recently launched its first
center outside the U.S. to service Europe, Africa and the Middle East. Their three top
reasons for this decision were a sophisticated telecommunications infrastructure,
multilingual and technical skills and the strong incentives offered by the government.
Companies are realizing that it is their total corporate package (e.g., compensation,
benefits, internal work environment, company's reputation within the context of other
competing employers in the community) that will determine how successful they will be in
recruiting and retaining a quality workforce for their call centers.
Assessing Information
In the same vein, companies are looking for communities that offer a total package.
Unfortunately, many areas carry a mixed message. In an effort to create more jobs,
economic developers often do not pay enough attention to existing tight labor market
conditions and fail to design a workforce development strategy to overcome this
shortcoming. Another community may have no available building at the moment (but lots of
pastures), yet no plans to fund, design or erect a spec building. Most communities provide
information overload, which may arrive in an overnight mail box and weigh up to 20 pounds.
Often, there seems to be no solid rationale for having targeted the call center industry.
In a frenzy to recruit new companies, too many areas have forgotten to develop and
implement a strong retention strategy. Even state-of-the-art telecommunications cannot
make a "good" location. It's now a given, much like water and sewers.
If your company is seeking to make a sound decision for a call center location, be sure
to scrutinize the information you receive from communities in regard to the following
areas:
- Labor supply, quality and cost,
- Infrastructure, especially telecommunications,
- "Ready-to-go" sites,
- Available buildings,
- Fast-track permitting,
- Training availability - not only basic skills, but call-center-specific.
Small Town Considerations
Small towns and rural areas may be the last frontier for companies to find untapped labor
reserves and less heated competition. Be aware, however, that some obstacles in going this
route would include:
- Less extensive air access,
- A lack of sophisticated telecommunications infrastructure - particularly in regards to a
greater distance to points of presence, or POPs - switches to long-distance carriers,
- A lack of available buildings or older structures needing costly upgrades,
- The difficulty of national recruiting for executive, managerial, professional and
technical talent,
- Labor market sustainability - you don't want to end up hiring the whole town.
One way to ensure you do not have to face these problems, should you choose to locate
in a small town or rural area, is to ask the community development folks if they can
provide you with information such as:
- A quantification of their labor and quality of life resources in both 30- and 60-minute
commute zones,
- Accurate wage and salary surveys (including underemployed positions such as retail store
sales clerks),
- A survey of local businesses that reports on effective starting salaries, salary ranges
and progressions within the range, incentive compensation, benefits (including
part-timers), hiring experiences (selectivity ratios), turnover, ratings on basic skills,
applicant flow, PC literacy, work ethic and the ability to staff "off-hour"
shifts,
- A survey of high school and college graduates who have left the area along with an
employment opportunities database to tap when the need arises,
- Information on state labor legislation and telephone call regulations (e.g., dual
monitoring, call hour restrictions and long-distance taxation policies),
You may also want to ask the community if they will perform some of the following tasks
for you:
- Establish a formal spousal employment assistance program to offset one of the major
difficulties of recruiting management talent,
- Enact a shell building program (with at least seven parking spaces per 1,000 RSF) or, at
the very least, some pre-permitted "ready-to-go" sites,
- Ensure that sufficient telecommunications are in place. Local carrier characteristics
that must be present are digital switching, fiber optics, ISDN, SONET ring diversity and
dual feed from two central offices. For long-distance service, dual feed to a hardwire
(versus microwave) and POP of at least one major carrier (this is critical, and the closer
the POP, the better). All buildings should have dual power feed, preferably from two
substations.
- Create CSR/TSR training programs - at the high school, as part of adult education and at
the community college.
- Create a local incentives pool to apply on a case-by-case basis (to include free
pre-employment training for part-timers if the state won't provide).
The Urban Allure
The big attraction to urban areas for call centers is an underemployed pool that can excel
in this industry, especially outbound telesales. The pool consists of artists, designers,
actors, actresses, writers, musicians, waiters, waitresses, bartenders, retail sales
clerks and bank tellers. They are usually friendly and not afraid of rejection.
Other pluses are mass transit connections, which make staffing off-hours shifts easier,
office space availability (even on a sublet basis), electric power reliability and
availability of experienced agents and supervisors.
Some obstacles include built-in turnover (based on the nature of the labor pool),
higher costs (payroll, occupancy, construction and taxes) and the image/perception in
upper executive ranks who say, "Who moves TO the center city?" But, with a
"smart" building in an enterprise zone, those same executives might think twice.
[Go to Site Selection Checklist:
Labor-Market Factors]
[Go to Site Selection Checklist: Non Labor-Market Factors]
[Download Adobe Acrobat copies of U.S. and
EU demographics. (95Kb)]
Katie S. Burdorf is a managing director of The Wadley-Donovan Group (WDG),
headquartered in Morristown, New Jersey. Wadley-Donovan is a management consulting firm
which specializes in corporate location and economic development consulting and
information services. It has recently become part of EPS Solutions, the first national
provider of horizontally integrated outsourcing services. For more information, visit www.wadley-donovan.com.
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