‘The Guide’ to Finding the Best Call Center Locations for Your Company

Finding a good call center location may sound easy at first until you make the mistake of placing your call center in the wrong location. It might take a month or a few years to realize the impact of your site selection decision. The problems you might incur include things such as excessive employee attrition, wage inflation, facility issues, and unacceptable customer satisfaction levels. To avoid these problems, it is critical to evaluate call center locations using best practices established by call center site selection experts. These experts, such as Site Selection Group, know the best data sources, processes, and critical steps to optimizing call center site selection decisions. The following guide provides a summary of the key steps to finding the best call center sites in onshore, nearshore, and offshore geographies.

Step 1: Identify the call center site selection team.

Putting together the right site selection team is critical. The team will typically include representatives from the executive team, business unit, real estate department, tax department, human resources, IT department, and outside site selection consultants. These team members need to be actively involved from the beginning and be prepared for ongoing project meetings, on-site due diligence, and final board approval.

Step 2: Define your requirement.

The site selection team will identify the key dates, employee skill requirements, language needs, projected headcount, desired labor rates, economic investment, accessibility to customers/management, real estate needs, and infrastructure requirements. You want to make sure the project is clearly defined so you don’t try to put a 1,000-employee call center into a small town. Define your needs to help find that perfect match in the subsequent steps.

Step 3: Utilize a filtering process to identify the long list of cities.

One of the biggest challenges in the process is the filtering of cities to get you a manageable amount of cities for full analysis. To properly filter cities, bulk data will have to be gathered to build a filtering model. Your data will need to include population, core demographics (age, household income, educational attainment, etc.), unemployment rate, cost of living, call center competition, call center saturation rate, wage rates, union rates, tax rates, time zone, real estate availability and other similar variables to narrow the list to five to 10 locations. This is where you need to match your project specifications to the right metro areas. Keep in mind that there are 933 metro areas in the United States and sifting through all of those is a major feat in itself.

Step 4: Conduct an exhaustive desktop analysis to identify the finalist cities.

To identify the finalist communities, the site selection team will need to perform a rigorous workforce, competition, business climate, economic incentive, and real estate market analysis of the five to 10 candidate cities. This research will include the gathering of detailed demographic data as well as the primary research that will be analyzed in various site selection models that will need to be developed. The following provides a sample of the information that needs to be uncovered:

• Demographic data that is the current year
• College and universities with enrollment data by degree type
• Historic unemployment over the last five years
• Size and wages of call center competitors
• Total workers employed in the local call center industry
• Military presence
• Recent expansions
• Recent closures
• Wage rates
• Fiber optic providers
• Airport service
• Tax rates (unemployment, corporate income, personal income, etc.)
• Real estate availability and costs
• Economic incentive availability
• Economic incentive comps
• Employer interviews
• Economic development interviews

Through the analysis of this research, the site selection team will identify a short list of communities using some type of weighted model that scores each location based on quantitative and qualitative factors such as labor market scalability, employee demographics, labor quality, call center saturation, supplemental labor sources, cost of living and wages, business environment, accessibility, operating costs, real estate availability and the economic incentive environment. This research will result in the identification of two to three finalist communities.

Step 5: Make site visits to finalist locations.

There is no better way to determine what city is the right fit for you than going out and conducting on-the-ground due diligence so you can see it for yourself. So once the short-listed cities have been agreed upon, the team will conduct tours to gain a thorough understanding of what a particular community has to offer. The visit will typically take one to two days per community in the U.S. and up to a week in nearshore and offshore locations. During the tours, the project team will meet with community leaders, regional economic development officials, workforce training representatives, staffing agencies, local call center employers, fiber providers, university officials, and real estate options. The anecdotal evidence uncovered during the tours will be crucial to the success of the site selection process and enable the team to truly understand the qualitative differences of each finalist community. The ultimate goal of the tours is to eliminate any problem markets, develop a list of additional due diligence items and identify the finalist buildings.

Step 6: Complete additional due diligence.

The odds are that you came away from the tours with more questions than answers. There are typically three areas in which you need to conduct extensive due diligence. First, the labor market needs to be tested by running test ads to help judge applicant flow. You may even want to send a follow-up human resources team to conduct live interviews of applicants. Second, you will need to contact the fiber providers to find out how long and how much it will take to get redundancy and capacity to each building. Lastly, you need to carefully conduct due diligence on the shortlisted real estate options. Some of the key call center real estate items to uncover will include parking ratio (Seven or more parking spaces per 1,000 square feet), HVAC capacity, electrical capacity, building hours of operation, ownership stability and history, permitting time/process, zoning and build-out cost estimations. You will likely need to bring in additional outside resources to help such as architects, general contractors, construction managers, and furniture vendors.

Step 6: Initiate negotiations.

Once the community tours are complete and due diligence is underway, the project team will initiate the simultaneous negotiation of economic incentives and real estate terms. It is critical to carefully control the negotiation process to maximum leverage and make sure commitments for real estate don’t conflict with a company’s ability to secure the economic incentives.

The economic incentives negotiations will typically be managed by someone from the tax department or the site selection consultant who will initiate formal discussions with local and state leaders to confirm the availability of economic incentives such as tax credits, tax abatements, cash grants, training subsidies, and other related incentives. It is critical to understand the financial benefit of operating in each site by forecasting the net benefit of incentives and evaluating clawbacks and compliance implications for the various jurisdictions.

Real estate terms will be negotiated at the same time as economic incentives by the real estate director or site selection consultant. If hiring a local commercial real estate broker, make sure to enlist a firm that only represents tenants, not owners, to ensure there are no conflicts of interest. You will also want to make sure they understand call centers. The negotiations will revolve around finalizing the deal terms such as the amount of space, rental rate or purchase price, concessions, improvements, parking, generator rights, non-compete rights, renewals, expansion, and contraction rights. 

Step 7: Complete build-out of the call center facility.

The final step of the project involves the build-out of the call center. This includes the bidding and management of critical items such as design, construction, infrastructure, furniture, fiber, and equipment. The construction team will develop detailed project budgets and schedules for the project and then follow the project through until move-in. Selecting the vendors such as architects, engineers and general contractors with call center experience can prove critical to delivering the project on time and within budget. 

Conclusions

Some of the biggest mistakes companies make involve letting real estate drive their decisions. Considering that $1 per hour in labor savings will pay for your entire facility, it is critical to conduct a balanced site selection process with a team of experts to make sure you make the right location decision. Don’t get swayed by a vacated call center building or news of a recent layoff. Hopefully, this guide to finding the best call center sites will help you in the future.