Few industries have an agreed upon a metric that measures overall competitiveness of a labor market. The call center industry is unique because a standard “saturation” rate is applied to measure a market’s overall competition. The impact of call center saturation conditions can greatly impact the performance and profitability of a call center due to employee attrition, wage increases and labor quality decline. To better understand call center saturation, Site Selection Group recently released a report identifying 40 of the most saturated metro areas in the U.S. to help companies identify markets that might be at risk of saturation which can be downloaded below.

Call Center - Metro Areas with Greatest Saturation Blog April 2019-1

How do you calculate call center saturation?

The call center saturation rate is defined as the percentage of the labor force employed in a call center or related back office operation such as shared service centers, transaction processing and other densely occupied entry-level operations. It is calculated by tallying the total call center employment of a market, and then dividing by the labor force. Saturation rates typically increase as a result of net new jobs created due to the opening of new call centers or internal growth of call centers already in the labor market. Conversely, the saturation rate will decrease as employers close down call center sites or lay off employees.

When is a labor market saturated with call centers?

Typically, labor markets will have between 1% and 3% of a labor market employed in call centers. A labor market with less than 2% saturation is considered a desirable labor market to expand due to the market being less competitive. However, when a labor market reaches a 3% or greater saturation rate, these labor markets are labeled as “saturated,” which often leads to higher employee attrition, wage escalation and labor availability concerns as call center employers begin to compete for talent. 

A labor market’s size impacts the longevity of the labor supply

The size of a labor market will greatly impact the optimal number of employees for a site. Once a saturation level is established, it is possible to estimate the number of jobs remaining in that market before the critical saturation point is reached. This is a good method for forecasting the scalability and longevity of the labor supply. For example, a community with a labor force of 250,000 — with 5,000 workers employed in call centers — has a saturation rate of 2%. This means that when 2,500 more call center jobs are created, the saturation rate will reach the critical rate of 3%. Therefore, you can theoretically have five new call centers, each with 500 employees, enter the market before reaching the higher risk rate of 3%.

The above example is critical, especially when looking at smaller communities with a labor force of less than 50,000 where you can quickly tap out a labor market by one new center entering the market. Due to the higher risk, call centers have been migrating back to larger markets in the last few years, which is a reverse of the trend seen in the late ’90s when call centers were going to very small labor markets to take advantage of lower labor costs. 

To help see where some of the most saturated labor markets in the U.S. are located, Site Selection Group has identified the top 10 most saturated labor markets in three categories. The categories are based on the population size of the metro area. Here are the rankings:

Top 10 Most Saturated Call Center Metro Areas with Population over 1 Million

Rank Metro Area Population Labor Force Total Call Center Employment Call Center Saturation Rate
1 San Antonio-New Braunfels, TX 2,422,370 1,226,570 61,172 4.99%
2 Buffalo-Cheektowaga, NY 1,139,060 575,120 27,564 4.79%
3 Columbus, OH 2,053,656 1,107,596 52,957 4.78%
4 Tucson, AZ 1,030,768 490,962 22,999 4.68%
5 Tampa-St. Petersburg-Clearwater, FL 3,051,699 1,518,666 69,460 4.57%
6 Phoenix-Mesa-Chandler, AZ 4,739,795 2,408,055 107,146 4.45%
7 Salt Lake City, UT 1,213,760 708,062 28,693 4.05%
8 Rochester, NY 1,094,382 550,853 21,992 3.99%
9 Charlotte-Concord-Gastonia, NC-SC 2,572,061 1,349,628 50,258 3.72%
10 Jacksonville, FL 1,505,256 847,388 30,240 3.57%

Top 10 Most Saturated Call Center Metro Areas with Population 500,000 to 999,999

Rank Metro Area Population Labor Force Total Call Center Employment Call Center Saturation Rate
1 Columbia, SC 832,545 416,294 24,543 5.90%
2 El Paso, TX 869,327 376,998 16,984 4.51%
3 Provo-Orem, UT 630,221 298,109 11,972 4.02%
4 Scranton-Wilkes-Barre, PA 560,033 290,904 10,896 3.75%
5 Albuquerque, NM 921,512 419,531 15,546 3.71%
6 Greensboro-High Point, NC 764,751 410,079 13,735 3.35%
7 Tulsa, OK 999,448 488,210 16,218 3.32%
8 Omaha-Council Bluffs, NE-IA 936,034 525,135 16,199 3.08%
9 Des Moines-West Des Moines, IA 691,478 384,027 11,787 3.07%
10 Lakeland-Winter Haven, FL 663,992 309,524 9,118 2.95%

Top 10 Most Saturated Call Center Metro Areas with Population 250,000 to 499,000

Rank Metro Area Population Labor Force Total Call Center Employment Call Center Saturation Rate
1 Sioux Falls, SD 264,552 158,877 12,376 7.79%
2 Cedar Rapids, IA 268,806 148,788 8,005 5.38%
3 Hagerstown-Martinsburg, MD-WV 285,962 128,427 6,390 4.98%
4 Utica-Rome, NY 295,318 138,248 6,582 4.76%
5 Springfield, MO 465,100 242,657 8,187 3.37%
6 Waco, TX 269,442 131,158 4,003 3.05%
7 Lincoln, NE 333,681 200,677 5,597 2.79%
8 Duluth, MN-WI 291,244 152,080 4,178 2.75%
9 Lynchburg, VA 262,137 125,399 3,232 2.58%
10 Brownsville-Harlingen, TX 430,449 175,965 4,290 2.44%

Top 10 Most Saturated Call Center Metro Areas with Population 100,000 to 249,000

Rank Metro Area Population Labor Force Total Call Center Employment Call Center Saturation Rate
1 Macon-Bibb County, GA 232,041 116,414 8,307 7.14%
2 Lewiston-Auburn, ME 108,120 60,391 3,740 6.19%
3 London, KY 149,470 62,915 3,765 5.98%
4 Johnson City, TN 203,221 100,259 5,972 5.96%
5 Muncie, IN 116,202 54,378 2,764 5.08%
6 Bloomington, IL 174,624 88,576 4,315 4.87%
7 Iowa City, IA 173,182 104,508 4,640 4.44%
8 Eau Claire, WI 169,107 91,339 3,815 4.18%
9 Florence, SC 207,786 96,690 4,012 4.15%
10 Fargo, ND-MN 246,434 145,519 5,938 4.08%

How will this impact site selection decisions?

Call center saturation remains a powerful metric in determining overall competition of a market. It is a good indicator of potential risk as it pertains to labor scalability, labor market longevity, employee attrition and wage inflation. Although the saturation rate alone provides valuable insight into the overall competitiveness of a labor market, it is critical to evaluate all location factors such as demographics, labor costs, business climate, labor laws, accessibility, economic incentives and real estate to make an informed site selection decision. 

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