Call Centers: Setting Your Sites
BY RICHARD M. GATTO, THE ALTER GROUP
The U.S. economy is in its ascendancy right now. According to the White House Council
of Economic Advisors, the nation is enjoying its strongest performance in 30 years,
posting a real rate of growth of more than four percent over the last three years,
concurrent with a drop in inflation and a rise in worker productivity. With the economy
percolating, the unemployment rate has hit its lowest level in more than 20 years, raising
the specter of the supply of skilled labor being tapped dry. This grim reality has raised
profound concern within corporate America, and perhaps nowhere more so than in the
labor-intensive call center industry. With personnel constituting as much as 80 percent of
the total cost of operating a call center, it is not surprising that it has become the
preeminent motivating factor in the site selection process for a call center. It is,
however, a simplification to think that gleaning information from the U.S. Bureau of Labor
Statistics, which is compiled only every fours years, is enough to secure an optimal site.
What is required is a more strategic approach with keen attention given to central
planning so that the corporation can properly orient the call center to serve its
long-term goals. Depending on the internal real estate capability of the corporation, it
may be advisable to engage a third-party site selection consulting firm.
Whether building an outsourced teleservices provider facility or a corporate help
desk, the lead times for call centers have been dramatically constricted to as little as
10 months from the moment of approval. The natural corollary of this is that the real
estate point person will likely adopt a short-term solution to the requirement in order to
save time. This may be retrofitting an industrial or big-box retail building or situating
the building in a community that may not be entirely conducive to the call centers
The initial step in selecting a site is to organize the initiative internally so there
is a clear division of responsibility and chain of command with representatives from
relevant departments, including operations, human resources, information technology,
sales, real estate and finance. The critical question that must be posited is the way in
which the call center will serve the overall objectives of the company.
Call centers today have advanced from simple clearing houses for transactions and
information to critical centers for managing customer relationships and increasing
profits. Computer-telephony integration (CTI) software has allowed call center agents to
be linked to back-office processes so they have access to structured database information,
including customer histories, profiles, complaints and pending transactions. In turn,
agents can input information from customers that relates not to a single transaction, but
enables the fostering of a long-term relationship. Clearly, call centers hover close to
the nerve center of a companys operations. Questions that should be discussed
internally include the relative merits of leasing versus ownership, the virtues of
multiple call centers versus centralized operations for the purposes of uninterrupted
service, and what functions should be outsourced.
At this point, the company should consider the locational key criteria for evaluating a
potential community and ultimately a site.
Labor, as the truism goes, is king. A company needs to determine its staffing and
skill-sets requirements well in advance. Based on this, it is possible to target labor
markets through information from the Bureau of Labor Statistics, such as median household
income, turnover rates and average incomes within major industries, and percentage of
population within the desired age range of 16 to 64 years old. These may include rural
areas, areas that have experienced recent layoffs, college towns and senior-citizen
communities. A sector that often remains unexplored by prospective employers is the
underemployed population. The U.S. Census Bureau dedicates its STF3 file to breaking down
underemployed labor by occupational categories. It would behoove a call center operator to
determine which categories they can recruit from and to calculate the number of people
within the optimal age group. The number of underemployed workers should generally be 15
times greater than the staff requirement of the call center to accommodate high turnover
The extraordinary attrition rates (often 100 percent) within the call center industry
merit consideration. It is incumbent on call center operators to structure their wage and
benefits packages to mitigate this.
Companies need to figure out such esoteric human resource issues as the period from
starting salary to maximum compensation, shift premiums for nocturnal workers, medical
insurance, holidays and benefits for part-time workers.
The company should also adopt a policy of flexibility, including institution of a
casual dress code, flex time, unpaid time off for slow periods and alternative work weeks.
The employee should also be given the option of declining benefits in favor of added pay.
Some of the other important criteria are:
- Telecom infrastructure is important, including a dual fiber optic feed with digital
switching and a fiber ring diversity system. For more sophisticated operations, local
POPs, or points-of-presence, with long-distance carriers, are highly advantageous, as are
ISDN lines, which allow concurrent voice and data transmission over the same line.
- Power is a vital consideration. Each call center features a critical data center or
com room that cannot go down. This necessitates a UPS system that also serves
every PC. Dual power feeds on the site are absolutely vital. Some call centers also have
emergency back-up generators which can service most of the facility for an extended
black-out period. Variable operating costs, such as electric power, office leases, heating
and air-conditioning and amortization, dictate call center location.
- Telecommunications taxes, which include sales/use tax on incoming toll-free or outgoing
WATS calls, are also an important factor to consider. The findings show cities like New
York, Los Angeles and San Francisco are highly prohibitive, while cities like Dallas,
Clearwater, Florida and Virginia Beach, Virginia are more affordable. Not surprisingly,
all three cities are in the top 10 for call center activity.
- Consider available economic incentives. As communities jockey for position around major
call center users, they have developed increasingly elaborate incentive packages,
particularly tax incentives. Others offer training programs through local institutions for
call center agents. Considering the average cost of training an agent may be as much as
$20,000, this can be a compelling benefit.
- In determining what the occupancy date for the new call center is, an important
consideration is the speed of the approval process within the prospective location. As a
rule of thumb, a state approval process should take no longer than 45 days and the local
should take roughly 30 days. Companies should request that the permitting be done at one
venue so they do not have to deal with the frustration of numerous and often adversarial
agencies. Online permitting is still in its infancy, but promises to be a powerful way of
accelerating the process.
It is worth mentioning two locational criteria that have largely fallen by the wayside:
The central time zone in regions such as the Midwest and Northern Plains used to be
deemed an advantage, because it offered a wider window for calling clients across the
country. This has, however, been superseded by a larger concern which is the wish to
mitigate the effect of natural disasters and inclement weather by building multiple call
centers around the country. In the event that a call center loses power or its phone
service, a company can switch operations to a satellite center in a different region of
the country. This has opened up the call center market to states like Arizona, North
Carolina and Colorado.
Nonregional accents, the conventional wisdom used to say, are much sought after by call
centers because of the clear enunciation and the way they connote professionalism. This
notion, however, has essentially been put to rest with the emergence of the South with its
mellifluous speech patterns as a hotbed for call center activity.
Once this locational criteria has been analyzed and a company has determined issues
such as the size of the center, the number of agents and the occupancy date, the company
should shortlist 6 to 10 viable locations. These should then be assessed according to
labor market, operating conditions and business costs by soliciting detailed information
from the local economic development agencies.
Once this is done, it is time to scout the locations personally, interviewing local
personnel agencies, telecommunications and other utility carriers, touring prospective
sites, analyzing labor within the commuter zones of the site, investigating residential
and office development patterns, and finally soliciting incentive packages from the
economic development representatives.
One of the temptations for a call center user constrained by deadlines is to lease an
existing building with a big floor area and a parking ratio adequate to house the agents.
Because of the high densities of people in call centers, a typical parking ratio is seven
spaces per 1,000 square feet. The ideal is 10 to 12 per 1,000 square feet, which makes
big-box retailers a strong candidate for conversion. Some developers are now taking it a
step further by retrofitting retail shopping malls into multitenant call centers.
The drawback with retail is that it lacks design elements like windows and often cannot
easily accommodate the infrastructure and cable requirements, which must often be hung
from the ceilings. Even the existing HVAC system has to be replaced since most retail
facilities use a continuous-volume system while call centers require a variable-air volume
A company that has endeavored to build a new facility should finally choose two sites,
a first choice and a backup, whereupon final real estate and incentives negotiations can
begin. A knowledgeable developer should accelerate this process by serving as an
intermediary for the call center user in the cost differential analysis, site acquisition,
zoning, financing, and finally, design and construction process.
It should be pointed out that choosing the site is by no means the last critical
decision. The design of a call center is crucial to aid in the recruitment and retention
of the workforce. Because of the sedentary, often repetitive nature of the job, developers
must integrate design features to mitigate the stress and discomfort of the job. This
includes introducing natural light, using warm, soothing earth tones for the walls,
designing ergonomic work spaces and monitoring air quality.
Companies are also outfitting their call centers with a bevy of amenities to provide
respite, including fitness centers, cafeterias, break rooms, libraries and day-care
Clearly, call centers have emerged from a dingy back-room office to a business unit at
the epicenter of a companys operations for the simple reason that responding to
ones customers is every business core competence. Site selection is at the
very heart of ensuring the efficacy of this function and needs to be a programmatic and
thorough process so that in choosing a location, a company always makes the right call.
Richard M. Gatto is executive vice president of The Alter Group. In this capacity,
he is responsible for directing all business development, leasing and build-to-suit
activities and corporate services, including The Alter Groups proprietary call
center development program, CallCore.