October 1998

Don't Overlook The Benefits Of Rural Areas For Site Selection

By CATHERINE S. EVERS, MAINE & COMPANY

There is one driving force today in selecting a location for call centers - labor. Labor availability, cost, and quality determine an area's suitability for a call center operation. The obvious reason for this is the low unemployment rates across the U.S. which have made finding adequate labor supply the number-one challenge for all industries, especially call centers.

While the industry once only considered communities with work forces of over 100,000 for a large call center, more companies have been forced to look at smaller, second-tier cities and rural areas. These rural areas often have lower work force numbers but high unemployment rates. Call centers are finding they also have many advantages.

Take for example, MBNA America, which in five years has established 5 call centers throughout Maine and employs nearly 3,000 people statewide. MBNA's largest facility in Maine is in Belfast, a small coastal community with a civilian work force of just over 16,000. Based on demographics alone, Belfast would not pass the sniff test for even a medium-sized operation, let alone the 1,300 people that MBNA employs there.

MBNA is successful in Belfast and other rural Maine towns because people in these areas tend to drive greater distances for a good job. Drawing a thirty-mile ring around Belfast expands its workforce to over 135,000.

Rural areas also enjoy the reputation of having a strong work ethic, which means higher productivity, stronger dedication and lower turnover. This is especially true in areas that have recently experienced the loss of a traditional manufacturing industry. In Maine, the downsizing and loss of paper, textile, and shoe manufacturing companies has created large pockets of available labor. Some areas have unemployment rates of 7 to 10 percent or higher.

Though manufacturing wages are typically higher than the usual call center, people in these towns often have deep family roots in the community and become loyal to their employer in order to stay in the community.Rural areas also tend to have a higher quality of life. Low crime rates, low housing costs and no traffic hassles translate into employees who are more content and, therefore, more productive.

Though a rural area may have the labor availability, training is often necessary - especially in towns where manufacturing has always been the way of life. Call center companies should seek locations in states that offer strong training programs. Maine's program is considered one of the best in the country because it is free, completely customized to the employers needs, and is conducted prior to employment. This allows companies to pick the best graduates out of the program without obligation to hire every trainee.

Call center companies should seek aggressive communities that are willing to assist in recruitment efforts to fulfill the labor needs of the call center. Proactive communities will often conduct trial recruitment ads to prove to the call center client that the needed labor supply is there.

This was done in Oxford, Maine, which helped that community win a 450-person ICT Group call center. ICT Group says its new Maine call centers are already outproducing its more experienced centers across the country. Because of the high productivity of its Maine workforce, the company opened a second call center in Pittsfield. Both ICT Group sites are in rural areas with high unemployment rates.

Once a call center's labor needs are satisfied, the company must find space for the operation. In this industry, rapid ramp-up is often critical. Third-party call centers that win large contracts need to be able to provide service immediately. Every day that calls are not being taken, revenue is lost. Therefore, communities must have existing facilities or build-to-suit options ready to go so that the call center can be up and running in three to six months.Large empty retail space, like that left behind by a grocery or department store, is easily retrofitted for call center use.

Finally, most call centers do not require advanced, high bandwidth telecommunications systems but they do need competitive rates, reliability and redundancy. Rates are determined by the facility's proximity to long distance carriers' points of presence (POPs). The closer an operation is to a POP, the more advantageous it is for the call center.

Reliability and redundancy can be increased by technology that reroutes calls when the primary route is down. For example, with such large customers as L.L. Bean and MBNA America demanding reliability in Maine, Bell Atlantic has aggressively installed SONET rings statewide. These rings automatically detect problems and reroute calls without interruption in service.

Tight labor supplies across the country continue to force call center companies to establish their operations in rural areas that tend to have pockets of available labor at affordable wage rates. They are also enjoying the added benefits that come with selecting a rural location.

Catherine S. Evers, is marketing director at Maine & Company. Maine & Company is a privately funded nonprofit corporation that assists expanding or relocating companies that are interested in Maine as a location confidentially and at no cost.