Quick Facts on Call Center Location Conditions by Region for 2023

The call center industry continues to be locationally disrupted due to challenging labor conditions in most geographies and the impact of work-from-home (WFH). Both of these factors have made the site selection process extremely complicated and created both opportunities and challenges in onshore, nearshore and offshore geographies as companies attempt to optimize their global footprint of in-house and outsourced call center operations. To help you navigate the market, Site Selection Group has summarized call center location trends that continue to unfold daily. 

U.S. call center market trends

• Labor conditions continue to be strained due to the unemployment rate hovering around 3.5%
• Wage inflation has stabilized in the last 12 months.
• $17 per hour has become the new entry wage for call centers.
• We are seeing some uptick in demand for U.S. call center demand recently mostly in the utility, insurance and telecommunications sectors. Some larger project announcements have been made by ContactPoint 360, Spectrum and Fidelity.
• Most companies are implementing the following location strategies:
  • Hub-and-Spoke – Partial WFH model with 25-75% of staff working within 50 miles of a centralized training facility.
  • Facilities-based – Plans to bring all or most employees back into their facilities three to five days per week.
  • Virtual WFH – Full conversion to the WFH model with virtual recruitment and training.
• WFH has enabled companies to recruit across the U.S. but hasn’t solved their recruitment challenges due to low unemployment.
• Minimal savings are achieved by shifting to WFH due to increased costs related to increased supervisor/management staffing, agent downtime for technology issues and general IT-related equipment expenses.
• More call center facilities are becoming available as leases are expiring and companies exit their facilities.
• There is no consistency in WFH versus facilities-based strategies by industry. WFH policies are driven at the company level with no clear industry trends emerging yet.
• Most companies have focused recruiting and expansion efforts in Tier 1 (1 million population) and Tier 2 (500,000-1 million population) cities where there is much more depth in the labor markets.

Latin America and Caribbean Trends

• The nearshore region of Latin America and the Caribbean (LAC) has incurred massive growth over the last few years which has created its own set of challenges.
• Labor markets are strained across most markets due to the rapid growth.
• Bilingual agent wages have inflated by 20-30% over the last couple of years.
• The Mexican peso’s rise relative to the U.S. dollar is causing major problems for business process outsourcers. The peso has appreciated against the dollar by about 15 percent since 2022 — putting significant pricing pressure on them.
• Attrition rates are reaching 6-10% per month now in most locations.
• Bilingual agent wages are $4-5 per hour in Guatemala, the Dominican Republic, Colombia, Jamaica, Honduras, Nicaragua and Mexico.
• Bilingual agent wages are $5-7 per hour in mature countries such as Costa Rica and Panama.
• Employee benefits are 40-50% of the wage costs.

Offshore trends

• The Philippines has been slowly picking up steam as the remaining covid restrictions are gone and their economic incentive programs have reorganized. Large site announcements have been made by Foundever, Asurion, Concentrix, Optum and OfficePartners360.
• The Philippines' wage rates are hovering around $3-4 per hour plus 50% benefits.
• India has emerged as a high-growth region again with large announcements by VXI Global Solutions, and Teleperformance.
• South Africa continues to be the rising star and is one of the hottest locations where wages are $2-3 per hour. Arvato, Wipro, ACCT and Sigma have all made recent large project announcements.
• Egypt is another country seeing a lot of growth. Wages are very low, and there are multiple language skills available. Alorica and Capgemini have recently made some large announcements.
• Countries like Ethiopia and Kenya are some emerging markets getting some traction as well.

Conclusions

The global call center market continues to evolve. Key factors that will impact the location trends will be return-to-office mandates, currency changes (i.e. Mexico), nearshore labor shortages, potential U.S. recession, cybersecurity risks and a variety of other macro forces that are challenging for anyone to predict or control. Hopefully, this brief update provides some valuable insight into what Site Selection Group is seeing to help you determine where you will expand your footprint.