Where are the Best Locations for a Call Center?

Companies are always asking me where the best place is for a new call center. My answer is, consistently, it depends. There are so many factors that go into the call center site selection process that are purely driven by the specific needs of a company and its customers. From time zone requirements to disaster recovery risks, the list of call center site selection criteria goes on and on. However, there are definitely locations that more frequently make it through the filtering process of identifying the best location for you.

Follow the herd site selection strategies have been a mistake for many companies

I can’t tell you how many times people have asked me about Phoenix as a location for their call center. People hear that Phoenix has been great for another company so they automatically assume it will be good for them. This is the classic herd mentality which is a common misconception in the call center industry. As labor markets became more competitive, call center site selection strategies evolved to where companies would often go against the herd in order to tap into less competitive labor markets. Bottom-line, Phoenix may be a great location for some companies and a disastrous mistake for others.

Popular call center cities have become challenging for lower-end call centers 

Larger cities like Atlanta, Dallas, Phoenix and Tampa were some of the first popular locations that call centers began expanding into in the ’90s. These cities have become great examples of very mature call center labor markets that are great for higher-end, high-paying back office operations but often prove to be challenging lower wage paying call centers. The evolution of these labor markets is only natural as the workers gain the skills then the city attracts higher-end back office operations and shared service centers.

Less recognizable cities have also attracted some great call center projects  

On the flip side, there are a lot of less recognizable labor markets that have had a lot of success attracting call centers. Cities like Greeley, Colorado; McAllen, Texas; Wichita, Kansas; and Augusta, Georgia; are some great examples of cities that have done a great job of winning call center and back office projects for companies like Comcast, State Farm Insurance, United Healthcare and T-Mobile into their communities. These cities provide companies benefits such as lower labor costs, less call center labor competition, bilingual employees, low cost of living, and economic incentives. There are also some trade-offs such as ability to ramp up quickly, scalability to expand, and labor market longevity. 

Key location criteria to consider when trying to find the best call center locations

There are some key site selection factors to consider when evaluating call center labor markets.  These cover a wide range of categories including labor availability, labor cost, business climate, economic incentives and real state.

Labor availability

• Population
• Labor force
• Labor force participation rate
• Historic and future growth projections
• Historic unemployment
• Targeted age groups
• Targeted income levels
• Location, size and wages of call center employers
• Call center saturation rate
• Number of jobs remaining before reaching certain saturation levels
• College and universities
• Local employment drivers (i.e. other dominant industries)
• Military presence
• Recent expansions
• Recent closures

Labor costs

• Call center wage rates
• Retail wage rates
• Wage inflation rates
• Cost of living
• Median income
• Current and future minimum wages

Business climate

• Corporate tax rates
• Individual tax rates
• Union presence
• Political problems
• Community infrastructure
• Financial condition of local government

Quality of life

• Accessibility by road and airports
• Cost of living
• Educational system
• Public transportation infrastructure
• Housing quality and costs
• Sports teams
• Retail amenities

Real estate

• Availability of real estate
• Vacancy rates
• Rental rates
• Parking
• Public transit access
• Construction costs
• Utility costs (electric, water, gas)
• Operating costs (taxes, insurance and maintenance)

Economic incentives

• Tax credits
• Tax abatements
• Sale tax abatements
• Training grants
• Cash grants
• Real estate grants and subsidies
• Priority permitting and fee waivers
• Enterprise zones

Conclusions

Finding the optimal location for a call center operation can be challenging. The days of throwing a dart at the wall to find a call center site doesn’t work anymore due to the complexities of evaluating all aspects of labor availability, labor costs, business climate, economic incentives and real estate. As a result, it is critical to develop an integrated call center site selection strategy to carefully evaluate and identify the optimal onshore, nearshore and offshore call center locations.