by King White, on Jun 23, 2016 2:11:53 PM
Measuring the call center saturation rate of a labor market has become standard practice when conducting site selection due diligence for call centers. You simply calculate the percentage of call center workers employed within the commutable labor force of the targeted call center facility to get the call center saturation rate.
As simple as it seems, it is an excellent way to gain a quick understanding of 
the competitiveness of a labor market and the impact on your labor costs, employee attrition and performance levels.
To help understand how call center saturation can influence your decision, Site Selection Group has identified 50 of the most saturated labor markets in the United States and developed some recommended best practices on how to use the data during the call center site selection process.
5 reasons why call center saturation needs to be carefully evaluated
Labor is the most critical component of a call center and is typically 80% of your operating budget. When you compare the financial implications to real estate, technology and telecommunications costs, there is no comparison. As a result, it is critical to locate call centers in the optimal location that fits the profile of your employee needs. Site Selection Group has identified the following five reasons why call center saturation needs to be carefully evaluated in the site selection process.
- Understand your competitors – It is critical to identify who you are competing against for labor to determine where you fit in the labor market. Do you want to be the low-end employer who loses the best agents to competitors or the employer of choice that takes the best agents? By identifying all of the call centers in a labor market, conducting wage surveys and interviewing local human resource professionals, you will quickly be able to see how you stack up against your competitors and if the market is too saturated for you.
- Determine labor market scalability – By estimating how many jobs are remaining in the market before reaching the dreaded 3% saturation rate, you will be able to estimate how large of a call center you can set up before reaching higher risk saturation rates.
- Estimate labor market longevity – Similar to labor market scalability, you can also estimate how long it will take before a market becomes saturated. If there are only 500 jobs remaining in the market before reaching 3% then you are able to do some quick math to estimate if one new 500-employee call center enters the market after you then the market will quickly become saturated. Conversely, if there are 5,000 jobs remaining in the market before reaching saturation, then you may have years left on the labor market before 10 new 500-employee call centers open in the labor market.
- Evaluate employee attrition risks – The call center saturation rate is often an indicator of attrition rates also. When markets become saturated, you will see attrition rates often exceed 100% per year especially in the lower-end call centers. Once your attrition rates hit this level then you are effectively going to reduce performance levels as you are in a defensive position of simply trying to keep the seats full and you may eventually churn through all of the qualified labor in a market.
- Prepare for wage inflation – As labor markets become more competitive, one of the only ways to compete with rising wages in a market and increase applicant flow is to raise the wages paid at your call center. These wage increases will go beyond the standard 2% to 3% national inflation and may often increase by 5% or 10% in a single year.
The 50 most saturated call center labor markets in the United States
Site Selection Group has identified the top 10 most saturated call center labor markets in five 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 | Population | Labor Force | Call Center Employees |
Call Center Saturation Rate |
|---|---|---|---|---|
| Phoenix, AZ | 4,606,379 | 2,219,974 | 108,564 | 4.89% |
| Salt Lake City, UT | 1,174,763 | 617,782 | 29,493 | 4.77% |
| San Antonio, TX | 2,394,156 | 1,192,382 | 51,966 | 4.36% |
| Charlotte, NC-SC | 2,436,209 | 1,284,399 | 52,382 | 4.08% |
| Atlanta, GA | 5,736,343 | 2,997,406 | 120,980 | 4.04% |
| Tucson, AZ | 1,013,316 | 483,745 | 19,130 | 3.95% |
| St. Louis, MO-IL | 2,812,942 | 1,488,927 | 53,951 | 3.62% |
| Jacksonville, FL | 1,450,789 | 743,395 | 25,030 | 3.37% |
| Dallas-Fort Worth, TX | 7,125,239 | 3,763,998 | 119,780 | 3.18% |
| Orlando, FL | 2,389,635 | 1,244,997 | 38,177 | 3.07% |
Top 10 most saturated call center metro areas
with population between 500,000 to 999,999
| Metro Area | Population | Labor Force | Call Center Employees |
Call Center Saturation Rate |
|---|---|---|---|---|
| Des Moines, IA | 627,569 | 352,302 | 14,898 | 4.23% |
| El Paso, TX | 855,316 | 389,058 | 15,409 | 3.96% |
| Colorado Springs, CO | 703,046 | 372,993 | 12,435 | 3.33% |
| Omaha, NE-IA | 918,168 | 501,130 | 16,603 | 3.31% |
| Provo, UT | 586,798 | 269,851 | 8,885 | 3.29% |
| Spokane, WA | 550,255 | 263,007 | 8,388 | 3.19% |
| Albuquerque, NM | 908,252 | 444,384 | 12,063 | 2.71% |
| Boise City, ID | 683,525 | 338,967 | 9,157 | 2.70% |
| Knoxville, TN | 865,193 | 416,605 | 11,143 | 2.67% |
| Harrisburg, PA | 565,234 | 303,186 | 6,950 | 2.29% |
Top 10 most saturated call center metro areas
with population between 250,000 to 499,999
| Metro Area | Population | Labor Force | Call Center Employees |
Call Center Saturation Rate |
|---|---|---|---|---|
| Sioux Falls, SD | 255,862 | 146,348 | 12,123 | 8.28% |
| Cedar Rapids, IA | 265,782 | 146,538 | 5,977 | 4.08% |
| Springfield, MO | 457,894 | 229,639 | 6,850 | 2.98% |
| Lincoln, NE | 325,292 | 184,960 | 5,275 | 2.85% |
| Huntington, WV-KY-OH | 362,374 | 155,202 | 4,165 | 2.68% |
| Greeley, CO | 286,209 | 147,499 | 3,721 | 2.52% |
| Roanoke, VA | 315,329 | 160,187 | 3,978 | 2.48% |
| Lynchburg, VA | 260,328 | 129,320 | 3,181 | 2.46% |
| Waco, TX | 264,642 | 127,500 | 3,061 | 2.40% |
| Gainesville, FL | 276,767 | 134,518 | 3,075 | 2.29% |
Top 10 most saturated call center metro areas
with population between 100,000 to 249,999
| Metro Area | Population | Labor Force | Call Center Employees |
Call Center Saturation Rate |
|---|---|---|---|---|
| Macon, GA | 229,221 | 102,187 | 8,303 | 8.12% |
| London, KY | 127,631 | 50,564 | 3,463 | 6.85% |
| Johnson City, TN | 201,626 | 97,041 | 6,076 | 6.26% |
| Florence, SC | 207,728 | 97,217 | 4,012 | 4.13% |
| Sherman-Denison, TX | 125,028 | 59,790 | 2,358 | 3.94% |
| San Angelo, TX | 119,830 | 60,421 | 2,233 | 3.70% |
| Coeur d'Alene, ID | 150,949 | 72,535 | 2,505 | 3.45% |
| Idaho Falls, ID | 139,959 | 64,523 | 1,820 | 2.82% |
| Sierra Vista-Douglas, AZ | 124,707 | 50,250 | 1,365 | 2.72% |
| Waterloo-Cedar Falls, IA | 170,883 | 92,167 | 2,500 | 2.71% |
Top 10 most saturated call center metro areas
with population between 50,000 to 99,999
| Metro Area | Population | Labor Force | Call Center Employees |
Call Center Saturation Rate |
|---|---|---|---|---|
| Stevens Point, WI | 70,528 | 38,727 | 2,188 | 5.65% |
| Cumberland, MD-WV | 99,522 | 43,986 | 1,874 | 4.26% |
| Elmira, NY | 86,984 | 40,374 | 1,595 | 3.95% |
| LaGrange, GA | 70,257 | 34,196 | 1,290 | 3.77% |
| Wisconsin Rapids, WI | 73,125 | 38,966 | 1,318 | 3.38% |
| North Wilkesboro, NC | 69,106 | 29,864 | 1,000 | 3.35% |
| Pocatello, ID | 83,306 | 40,451 | 1,260 | 3.11% |
| Palestine, TX | 58,019 | 21,027 | 650 | 3.09% |
| New Castle, PA | 87,978 | 41,848 | 1,100 | 2.63% |
| Muskogee, OK | 69,562 | 30,079 | 750 | 2.49% |
Conclusions
Call center saturation rates continue to be a standard way of evaluating the sustainability of labor markets; 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 give employers willing to pay higher wages a real opportunity to quickly attract a highly skilled workforce.
