Top 10 Metro Areas with the Highest Call Center Saturation Rate

by King White, on Apr 16, 2014 3:40:00 PM

Companies need to carefully evaluate labor competition when looking to open their next call center. Labor markets are recovering and reshoring initiatives are driving significant growth in the U.S. call center industry. A key variable that has become a standard tool to measure labor market competitionis the call center saturation rate. The saturation rate measures the percentage of the labor force (not total population) that is employed in call center operations within a metropolitan area or similarly defined labor pool. To help understand call center saturation, Site Selection Group identified some of the most saturated markets in the U.S.

History of the call center saturation rate
The call center saturation rate emerged in the mid-1990s when the call center industry went through significant growth. Call centers became one of the hottest industries and led to establishment of some of the largest call centers in the country of which many are still operational today. These centers typically clustered into larger metro areas and housed more than 1,000 employees each because the technology infrastructure costs were so high.  

“It was all about scalability when call centers were set up during the ’90s. Companies needed at least 500 employees in their call centers to offset the million-dollar investment in their phone switch,” explained Sam Pruitt, Principal at Site Selection Group.

Due to this growth and scale of these centers, call centers began to see employee attrition rates escalate and wage rates increase as workers would switch jobs for as little as 50 cents per hour over their current wage. The supply and demand for call center workers had become imbalanced in many labor markets leading to the creation of the call center saturation rate that measured labor market competitiveness. Today, call center saturation rates are a standard tool used by leading site selectors and economic development organizations.

When is a market saturated?     
When evaluating call center saturation, it is critical to understand when a market has become saturated. The rule of thumb is that when the saturation rate exceeds 3 percent, the market is considered saturated. A healthy saturation rate is between 1 and 2 percent. However, it is critical to look at the number of jobs remaining before reaching the next saturation threshold.  

For example, a community with labor force of 250,000 with 5,000 workers employed in call centers has a saturation rate of 2 percent. This means that when 2,500 more call center jobs are created that the saturation rate will reach the critical rate of 3 percent. Therefore, you can have five new call centers of 500 employees each enter the market before reaching the higher risk rate of 3 percent.

The above example is very 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 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.  

Most saturated markets     
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

Metro Area State Saturation Rate
Tampa FL 6.80%
Salt Lake City UT 5.57%
San Antonio TX 5.40%
Phoenix AZ 4.42%
Chicago IL-IN-WI 4.10%
Charlotte NC-SC 4.06%
Denver CO 3.93%
Atlanta GA 3.48%
Tucson AZ 3.39%
Buffalo NY 3.38%

Top 10 Most Saturated Call Center Metro Areas

with Population between 500,000 to 999,999

Metro Area State Saturation Rate
Des Moines IA 5.29%
El Paso TX 4.05%
Colorado Springs CO 3.92%
Scranton PA 3.87%
Greensboro NC 3.51%
Lakeland FL 3.46%
Boise ID 3.43%
Tulsa OK 3.37%
Omaha NE-IA 3.33%
Albuquerque NM 3.01%

Top 10 Most Saturated Call Center Metro Areas
with Population between 250,000 to 499,999

Metro Area State Saturation Rate
Utica-Rome NY 4.95%
Duluth MN-WI 4.03%
Hagerstown MD-WV 3.52%
Trenton-Ewing NJ 3.31%
Lafayette LA 3.29%
Myrtle Beach SC 3.26%
Cedar Rapids IA 3.18%
Springfield MO 3.02%
Lubbock TX 3.00%
Charleston WV 2.71%


Call center saturation rates continue to be a standard way of evaluating the sustainability of labor markets in the U.S.; however, it is critical to closely review who your direct competition is in a labor market. Many metro areas that appear saturated may actually be highly underemployed call center markets, which gives employers willing to pay higher wages a real opportunity to quickly attract a highly skilled workforce. The next challenge is understanding how to forecast future workforce conditions for your call center — a topic to be evaluated in next month’s blog by Site Selection Group.


Download our Call Center Saturation Whitepaper


Topics:Call Center



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