by King White, on Sep 21, 2021 2:07:15 PM
The call center industry is heading into challenging times as wage inflation is eating into corporate profits and adding to the soaring inflation. Business process outsourcers and captive call centers are facing extremely tight labor conditions resulting in higher wages to win the battle for talent for facilities-based and work-from-home employees. Companies continue to try to determine that balance of the right wage rate to get the right talent. To help evaluate the situation, Site Selection Group has developed a quick wage guide to help you understand wage inflation across the U.S. utilizing our proprietary call center wage survey data.
Wage increases will likely stay elevated and outpace inflation
Rising inflation, high demand for workers, and a stagnant labor supply have created historic recruiting challenges across most industries over the last year. Lower wage occupations in call centers, retail, distribution centers and manufacturing plants have been hit the hardest.
The Bureau of Labor Statistics reported in the June jobs report that average hourly earnings over April-June rose by an annual rate of 6% which is two to three times the typical growth rate. “Inflation has increased notably and will likely remain elevated in coming months before moderating,” Federal Reserve Board Chair Jerome Powell said during a press conference on July 14. As inflation subsides and the COVID-19 pandemic ends, we will likely be left in a world where wages outpace inflation. The following graph shows inflation over the last year.
Monthly 12-month inflation rate in the United States from July 2020 to July 2021
Source: Bureau of Labor Statistics
Call center wages have increased by 15%+ since the pandemic began
Site Selection Group has been inundated with inquiries from our clients trying to determine market wages at their existing sites, new sites under consideration, and markets they are expanding their work-from-home workforce. Prior to the pandemic, everyone was concerned with the minimum wage increases in various states across the country. Now, everyone is trying to adjust wages to battle unemployment benefits, inflation and the shift to an employee-controlled labor market. The following table provides a summary of where Site Selection Group has seen wages begin to stabilize by metro area type.
| Metro Area Category | Metro Area Examples | Pre-Pandemic | Current |
| Entry Wage Rate | Entry Wage Rate | ||
| Tier 1+ | Boston, Los Angeles, New York, San Francisco, Seattle | $15.00-$18.00 | $18.00-$22.00 |
| Tier 1 | Atlanta, Charlotte, Dallas, Kansas City, Las Vegas, Phoenix, Tampa | $14.00-$16.00 | $16.00-$18.00 |
| Tier 2 | Albuquerque, Colorado Springs, Fort Meyers, Greenville, Knoxville, Ogden, Winston-Salem | $12.00-$14.00 | $14.00-$16.00 |
| Tier 3/4 | Athens, Brownsville, Clarksville, Las Cruces, Montgomery, Shreveport, Yuma | $11.00-$13.00 | $13.00-$14.00 |
Conclusions
Site Selection Group believes that call center wages have peaked for the immediate future subject to the impact of another black swan event. Some experts are predicting that tight labor market conditions will be the norm until the next recession, so you should expect ongoing wage pressures in the coming years especially in lower-wage occupations such as call centers, retail, distribution centers, and manufacturing plants. Wages for work-from-home agents have proven to be the same as call center agents working in facilities. However, you can still be strategic about where you recruit by picking the right labor markets for expansion through a proven site selection methodology.
