The COVID-19 pandemic is causing havoc in labor markets across the U.S. Whether you are implementing a work-at-home or a bricks-and-mortar strategy, call center saturation will continue to be the industry metric that measures overall competitiveness of a labor market for call center workers. 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. Please note, this report is based on pre-COVID-19 data and subject to change.

CC SaturationCLICK HERE TO DOWNLOAD

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 Phoenix, AZ 4,760,705 2,480,019 133,608 5.39%
2 Buffalo, NY 1,154,648 585,315 30,099 5.14%
3 San Antonio, TX 2,442,617 1,255,048 62,842 5.01%
4 Charlotte, NC 2,627,968 1,404,597 68,733 4.89%
5 Tampa, FL 3,095,211 1,566,479 72,715 4.64%
6 Tucson, AZ 1,038,039 500,402 23,057 4.61%
7 Salt Lake City, UT 1,235,457 740,087 33,066 4.47%
8 Rochester, NY 1,099,638 555,072 22,284 4.01%
9 Columbus, OH 2,073,702 1,129,705 42,514 3.76%
10 Jacksonville, FL 1,533,064 882,945 31,706 3.59%

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 El Paso, TX 873,499 383,309 19,422 5.07%
2 Provo-Orem, UT 646,268 314,891 12,182 3.87%
3 Greensboro, NC 771,065 415,798 16,035 3.86%
4 Scranton, PA 567,677 296,247 10,896 3.68%
5 Albuquerque, NM 930,697 428,214 15,022 3.51%
6 Columbia, SC 843,140 423,977 14,093 3.32%
7 Omaha, NE 944,117 535,837 17,376 3.24%
8 Dayton, OH 808,286 397,849 12,680 3.19%
9 Lakeland, FL 686,549 325,865 10,170 3.12%
10 Boise City, ID 739,063 392,090 11,075 2.82%

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 268,941 163,602 10,997 6.72%
2 Cedar Rapids, IA 271,780 151,134 8,765 5.80%
3 Hagerstown, MD 289,011 130,958 6,390 4.88%
4 Utica, NY 298,679 139,110 6,582 4.73%
5 Fargo, ND 251,037 149,721 5,264 3.52%
6 Charleston, WV 269,787 115,837 3,915 3.38%
7 Waco, TX 270,804 132,341 4,023 3.04%
8 Trenton, NJ 373,142 222,443 6,472 2.91%
9 Columbus, GA 323,648 153,080 4,437 2.90%
10 Duluth, MN 292,527 152,706 4,178 2.74%

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 232,954 116,525 8,307 7.13%
2 London, KY 150,955 63,109 4,265 6.76%
3 Muncie, IN 116,533 54,677 2,974 5.44%
4 Johnson City, TN 205,165 101,122 5,313 5.25%
5 Lewiston, ME 110,017 61,308 3,140 5.12%
6 Bloomington, IL 174,904 88,956 4,315 4.85%
7 Iowa City, IA 175,792 106,217 4,740 4.46%
8 Eau Claire, WI 170,502 93,252 3,815 4.09%
9 Florence, SC 210,945 98,747 4,012 4.06%
10 Saginaw, MI 196,925 89,895 3,412 3.80%

How will this impact site selection decisions?

The long-term impact of the COVID-19 pandemic on call center labor markets is unknown. Call center saturation will remain a powerful metric in determining overall competition of a market whether it is for work-at-home or brick-and-mortar call center agents. It remains an excellent 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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