by King White, on Jul 2, 2015 2:19:00 PM
Few industries have an agreed-upon metric that measures the 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 analyzed more than 100 markets of varying populations in their recent whitepaper that identified metropolitan areas with the greatest call center saturation rate increase from 2013 to 2015 to help companies identify markets that might be at risk of future saturation.
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.
Metro areas with the greatest increase in saturation rates
To identify labor markets with a recent increase in competition, Site Selection Group has identified the top 40 metro areas with the greatest saturation increases from 2013 to 2015 in four population tiers by population tier in their recent whitepaper which can be downloaded here. The following list identifies a partial list of metro areas identified in the report:
Metro Areas with Greatest Saturation Increase
| Metro Area | Population | Total Labor Force |
2013 Saturation Rate |
2015 Saturation Rate |
% Increase |
|---|---|---|---|---|---|
| Greensboro, NC | 748,849 | 381,715 | 3.20% | 5.37% | 2.17% |
| Cedar Rapids, IA | 263,845 | 145,106 | 3.18% | 4.12% | 0.94% |
| Greeley, CO | 277,349 | 142,654 | 1.31% | 2.19% | 0.87% |
| Provo, UT | 581,417 | 280,290 | 2.31% | 3.17% | 0.86% |
| Jacksonville, FL | 1,417,070 | 727,960 | 2.70% | 3.44% | 0.74% |
| Waco, TX | 263,660 | 123,497 | 1.76% | 2.48% | 0.72% |
| Charlotte, NC-SC | 2,380,045 | 1,246,193 | 3.40% | 4.11% | 0.71% |
| Colorado Springs, CO | 695,155 | 370,013 | 2.73% | 3.35% | 0.62% |
| Coeur d'Alene, ID | 146,904 | 72,853 | 2.83% | 3.44% | 0.61% |
| Clarksville, TN-KY | 275,142 | 134,202 | 1.14% | 1.67% | 0.54% |
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.
