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Technology Highlights
March 2002

Call Center Site Selection

By James Beatty, NCS International

Selecting a new site for your contact center can potentially be one of the most expensive, gruesome, agonizing, painstaking processes you will ever pursue. This article will outline how to make the process one that is cost conscious, pain free, well planned and easy to implement.

Labor, as you know, is 65 percent to 70 percent of your operating costs. Therefore, I urge you to properly identify the number of agents, supervisors and managers needed at start up and for 6, 12, 24 and 36 months. Factor in attrition rates so you can quantify employment levels and forecasts at each of the benchmark dates. The respective skill, educational and experience levels required of the agents to successfully deliver the type and quality of service at your new location must also be quantified. Additionally, training needs and requirements should be well articulated and documented as pre-employment screening and training programs will be a key incentive factor in the selection of the community or, as I like to refer to them, your location partner.

Your location search parameters must be established. Do you need to be in a specific time zone, particular part on the United States, North America or the world? As such, let me share some locational trends that have evolved for call centers in the last few years as identified by consulting firms specializing in call center site selection

The Small Town Strategy is one in which you focus your search on communities, areas or regions that have a population of less than 50,000. You can establish a higher or lower number as you see fit, but the key point here is that it will allow you to focus on reviewing areas that would generally go unnoticed and, therefore, undiscovered. This strategy has been utilized by centers that wanted to avert the sometimes-fierce competition that occurred in urban markets with unemployment rates of 4 percent or lower. This strategy has also allowed call centers to mitigate escalating wage pressures that have occurred in the larger markets.

The Hub and Spoke Strategy is one that companies may choose to use in place of establishing a 'Mega Center.' Let's assume you need to set up a 500-seat center, which would equate to 500 to 1,000 agents. Instead of housing the entire operation under one roof, you establish one center of 250 seats or 250 to 500 agents and 2 or 3 operations each with 100 to 150 seats equating to 100 to 200 agents. Each of the smaller operations would be strategically placed within 40 to 50 miles of the larger operation. This allows you to take advantage of multiple labor markets and could possibly lead to job progression opportunities due to potential variations in wage and salary levels. This would also allow you to compare efficiencies at each center and adopt best practices. Key personnel could be rotated among these operations to develop lead agent, supervisory and management talent.

The Urban Inner City Strategy is one in which you locate in inner city areas that have traditionally been overlooked in many economic development and site searches. These areas generally have an abundance of labor and talent, very little competition from other employers and significant opportunity for support from the local municipality, county and the state in the form of grants, loans and other incentives. According to HUD, many of these areas are undergoing a renaissance in America in the form of new investment in retail, housing and infrastructure improvement and, as such, are tremendous opportunities for the companies willing to make the commitment. Sprint has successfully deployed this strategy in Kansas City, MO at one of its customer service facilities, which ultimately received national awards for excellence.

The Global Strategy is for companies that want to explore opportunities in Canada, Europe, Ireland, Japan, Australia, India and other international locations. This allows companies with customers worldwide to adopt the 'follow the sun' strategy in providing around-the-clock customer service. These countries have adopted very aggressive programs for customer service operations to attract inward investment from U.S. firms. These countries know and understand your global needs and have even established offices in the U.S. to pursue opportunities.
What are some of the most popular areas for call center growth? The leading states and provinces for growth in calendar year 2000 were:

Texas 12,293
Florida 10,575
Oklahoma 5,567
Illinois 4,575
Louisiana  4,500
Virginia 4,400
California 4,200
Pennsylvania 3,600
Ontario 3,125
West Virginia 2,750

Some of the leading U.S. metro areas for calendar year 2000 were:

Baton Rouge, LA  4,500
Oklahoma City, OK  3,717
Dallas/Fort Worth, TX  3,600
McAllen, TX  3,315
Tampa/St. Petersburg, FL  3,300
Chicago, IL  2,150
West Palm Beach, FL  2,091
St. Louis, MO  1,745
Charlotte, NC  1,700
Las Vegas, NV  1,625
Source: Deloitte and Touche

There are a number of resources available to you in your search. Every country, state, province, city and community has an economic development office to assist you. Most utility companies have very active and well-informed economic development staffs as well. Call centers are key targets for these entities due to the large numbers of jobs that can be generated. What is large? Well, in some communities 50 to 100 jobs can make a huge impact in the local economy.

These organizations will assist you in identifying labor availability, buildings and even telecommunications infrastructure. Best of all, these resources cost you nothing and the people you will encounter in the process are very knowledgeable. In addition, the Web site, www.callcentersites.net can provide you with information on every call center location in the United States. Other call center locations worldwide are added to the site daily.

Should you have any questions related to your site search, please fell free contact me at [email protected] and I will address these questions or comments in future columns.

James Beatty is president of NCS International, Inc., which specializes in corporate site selection, community analysis and marketing.

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