Why Companies Reshore Call Centers to the United States
by King White, on Oct 13, 2023 8:00:00 AM
The U.S. call center market was significantly disrupted over the last few years as companies with onshore call center operations faced significant challenges due to work-from-home migration, difficult labor conditions, labor cost inflation and evolving technology. As a result, many companies were forced to move call volume to nearshore and offshore regions to combat these challenges.
As labor conditions in the U.S. begin to stabilize, it is very likely we may see a resurgence of call centers reshoring back to the U.S. similar to what happened in previous cycles. To help understand this potential trend, Site Selection Group has identified 13 reasons why a company might consider reshoring its call center operations.
Top reasons why a company should consider reshoring
Companies choose to locate their call centers in the U.S. for a variety of reasons, driven by factors that contribute to operational efficiency, customer satisfaction and business success. Here are some of the key reasons why companies opt to establish and reshore their call centers in the U.S.:
1. Skilled workforce
The U.S. has a competitive advantage if you are seeking high-quality agents, but it often comes at a higher cost. Clearly, the U.S. has a well-educated and skilled workforce with the ability to provide the highest quality customer service, technical support, sales and other specialized back office functions. Companies that establish call centers in the U.S. can tap into this talent pool, ensuring that their call center agents possess the necessary skills to handle complex inquiries effectively.
2. Language proficiency
The availability of quality English-speaking workers at many of the nearshore and offshore locations has become very challenging and will only continue to get worse due to the rapid growth in the regions over the last few years. If you want the highest quality English-speaking workers with an American accent, then the U.S. is the ideal location even if the price is a premium. Having customer service representatives who are fluent in English helps facilitate effective communication and problem resolution, resulting in better customer experiences and higher sales conversion.
3. Cultural compatibility
Unlike most nearshore and offshore geographies, call centers in the U.S. are culturally aligned with the local customer base, allowing agents to understand cultural nuances, idioms and references more easily. This cultural compatibility can lead to improved interactions and stronger customer relationships.
4. Time zone advantage
The U.S. spans multiple time zones, making it possible for call centers to provide customer support during the local business hours of different regions. This minimizes the frustration customers often face when dealing with offshore call centers located in vastly different time zones where employers typically pay premium wages to work nontraditional hours.
5. Customer experience focus
Companies prioritize customer satisfaction and experience as a competitive advantage. By locating call centers in the U.S., companies can provide a high level of personalized and empathetic service that resonates with American customers and can dramatically help a company’s overall reputation and image in the marketplace.
The infrastructure in larger U.S. metro areas (100,000+ population) is considered very good when compared to most nearshore and offshore locations. From fiber to electricity, the U.S. is generally very reliable and cost-effective. For example, South Africa lost two of its most critical submarine cables which caused most of their internet service to go down for several days in August 2023.
7. Data security and privacy
Data security and privacy regulations are rigorously enforced in the U.S. Companies that handle sensitive customer information can benefit from the country’s robust legal framework and strict compliance requirements. Navigating the various laws and regulations in some nearshore and offshore regions can be much more complicated and risky.
8. Quality control and training
It is also easier to control quality when your people are closer to you. Most companies are implementing a full return to the office or a hub-and-spoke site selection strategy in the U.S. Proximity allows for more effective training, supervision and quality control of call center agents. Companies can conduct regular training sessions, monitor performance closely and make real-time adjustments to enhance service quality.
9. Real estate and build-out costs
The cost to set up a call center in nearshore and offshore locations is very capital-intensive due to the significant build-out cost and lack of available facilities. In the U.S., there are currently over 1,000 vacated call center facilities spread throughout the country and most landlords will fund a significant portion of the build-out cost. In addition, it is easier and less expensive to buy and ship high-quality furniture and IT equipment within the U.S.
10. State and local economic incentives
The availability of state and local economic incentives such as tax abatements, cash grants, training grants, real estate grants and tax credits vary greatly across the U.S. These economic incentives can help companies offset the up-front capital investment and the on-going cost to operate. Most onshore and offshore countries only provide a tax holiday to avoid paying taxes on revenues and taxes on imported computers and equipment.
11. Government and industry-related regulatory requirements
Operating call centers in the U.S. ensures compliance with federal, state and local regulations, reducing the risk of legal issues and reputational damage due to noncompliance.
12. Socio-economic impact
By establishing call centers in the U.S., companies contribute to job creation and economic growth in local communities. This can lead to positive public relations and community engagement, enhancing the company’s corporate social responsibility profile.
13. Operational efficiencies
Operating call centers in the U.S. allows companies to be more responsive to changing customer needs and market dynamics. Adjustments to staffing, service offerings and operational procedures can be implemented more easily.
In summary, the decision to locate call centers in the U.S. is driven by a combination of factors that center around enhancing customer service quality, aligning with the local culture, complying with regulations, and contributing to the overall success and reputation of your company. By prioritizing these factors, companies can create a positive customer experience that fosters customer loyalty and supports their long-term growth objectives.