The COVID-19 pandemic is likely to change the call center industry forever. While it’s still too early to know the exact impact, several trends are emerging. The coronavirus pandemic initially caused global chaos as industries migrated call center agents into a work-from-home environment with developed countries having an easier time with the transition.

As a result, many lessons were learned that will change how and where companies locate their call center agents and facilities going forward.  To help understand how this may impact your call center site selection strategies, Site Selection Group has identified five major trends that continue to change daily as the effects of coronavirus pandemic unfold.

State of the call center industry pre-COVID-19

In order to understand where the industry is headed, it’s important to look at where it was prior to the pandemic hitting the world.  The following summarizes where the call center industry found itself at the end of the longest bull market in history:

  • Labor conditions extremely tight – Labor conditions in the U.S. were the tightest they have ever been with unemployment at historic lows. Call center wages had increased over 20% within the last couple of years as companies battled for talent. Call centers were exiting smaller tertiary labor markets in favor of larger cities with more labor.
  • Philippines overly mature – Once a BPO dominated country, waves of captive in-house operations came into the country over the last decade. Wages have increased along with employee attrition.
  • Latin America mature – The Latin America region was one of the hottest globally with locations like Jamaica and Colombia taking center stage in the final cycle of growth pre-COVID-19. BPO providers had planted their flags in all of the main targets which left labor markets tight and wage inflation kicking in.
  • Eastern Europe mature – Similar to Latin America, Eastern Europe had quickly matured across most of the lower-cost countries causing tightening labor conditions and wage inflation.
  • Work-from-home model grows slowly – It is important to understand that companies were slowly adapting work-from-home as an option. A decade ago, people thought it would be triple the size that it actually had become. There was slower than anticipated adoption to work-from-home call center agents for a variety of security and management reasons.
  • Automation slowly gains momentum – Automation was much more talk than reality; however, it is an exponential growth variable that will take hold in the near future but had minimal impact overall.

In summary, the entire world was running at max capacity pre-COVID-19 which had many companies trying to figure out where they should expand as their options were limited.

COVID-19 expedites evolution of the call center industry with five trends emerging

Who thought 90% of global call center workers would be forced to work from home in a matter of weeks? COVID-19 forced immediate change in an industry that was clearly stuck in its ways. The world’s “call center experiment” amid the coronavirus pandemic created the following five trends that bear watching:

1.  Hub-and-spoke may be the future

The clearest trend that has emerged is that the hub-and- spoke call center model is the clear winner. This provides a blend of a physical site for training and nesting new agents coupled with a work-from-home environment for its star agents who have the home environment needed. We are seeing a 70-80% of the agents being housed in facilities and 20-30% working for home to be the projected winning ratio for call centers in the near future. It is the best of both worlds under this model but possibly limited only to onshore geographies.

2.  Nearshore and offshore regions face major challenges

The “call center experiment” proved that work-from-home could be done at home in near- and offshore regions; however, the infrastructure and living conditions in most regions are not conducive to fully shift all employees to home. It could take decades before many of these countries like the Philippines, India, Guatemala, Honduras, Jamaica and others can consider work-from-home a long-term option. Keep in mind that call volume has no where to go when the end of the line is nearshore and offshore which could push a lot of call volume back to the U.S. and backfill much of the capacity left idle due to COVID-19.

3.  Security vulnerability is a major risk 

Who thought 90% of global call center workers would be forced to work from home in a matter of weeks? COVID19 forced immediate change in an industry that was clearly stuck in its ways.

4.  Call center site selection strategies changing

The average call center facility in the U.S. typically ranged between 250 to 500 workstations pre-COVID-19. Today, we have quickly seen the average dropping to 100 to 250 workstations as the hub-and-spoke model changes the industry. The hub provides all recruiting, training, nesting and collaboration space while the spoke can allow for hundreds of agents to work from home — providing a much larger recruiting zone around the site.

5.  The world’s “call center experiment” amid the coronavirus pandemic created the following five trends that bear watching

It is unknown if social distancing could impact the long-term design specifications of call centers. U.S. call center density averages around 100 to 130 square feet per workstation while near- and offshore facility density ranges between 50 to 80 square feet per workstation. If these ratios increase by 20%+ to accommodate for social distancing, the any idle capacity in the market could quickly be absorbed.

Conclusions

The call center industry is entering unchartered waters. Is the shift to work-from-home going to last or will we look back as it was a failed experiment? Will nearshore and offshore locations ever build the infrastructure needed to make work-from-home a long-term reality? Will automation eventually make all of this irrelevant? It is too early to truly predict the long-term impact of COVID-19; however, it is clear that the call center industry is in for at least a couple of years of turbulence.

Let us know what you think!