Bottom-Line Call Center Management
Chapter 3: Location, Location, Location
This chapter examines a common issue faced in business: What is the best location for a particular facility that will help maximize profitability? Since call centers require a large input of labor, critical factors in site location are the size and type of labor available. The right mix of labor helps managers hire successfully, thus meeting the objectives of the center. The location of a call center will by default determine the number and type of employees it can hire and retain. Conversely, the number and type of employees sought to fill the center should strongly influence the location of the call center.
Where to Locate a Call Center
There is an art and science to locating business activities. Site selection is a major industry because where a business is placed can help influence its success or failure, no matter how well the business is managed (see Site Selection, below).
Call center managers do not have to worry about a storefront to attract walk-in customers to sell a service or product. Thus, there is a fundamentally different set of location requirements for a Wal-Mart than for a call center. Most call centers are back offices, and thus, the products/services are sold/acquired over the phone or by e-mail. The only reason to have a large and highly visible class-A office building would be for public relations, advertising, and/or company policy. However, even though call centers will not attract walk-in customers, the location of a call center is still extremely important and will help determine the success or failure of the center.
According to author Brendan Read (2000, p. 203) and site selection consultants, there are many factors to consider when locating a call center. These factors fall into three major categories: labor, legislation, and community.
- Wage structures
- Local fringe benefits
- Language skills
- Labor force participation
- Telemarketing laws
- Taxation policies and rates
- Unemployment insurance and workers' compensation rates and rules
- Right-to-work laws
- Incentives, such as training grants and tax credits
- Time zones
- Telecom and electrical infrastructure
- Transportation (roads, mass transit, and inter-city air and rail access)
- Cost of living, including housing
- Public safety
- Property and site availability
- Local business attitudes (e.g., whether the community is probusiness)
Though Read is correct that these factors, and many others, help one location to succeed over another in site selection of call centers, what is not clear is how to weigh each of these factors against one another. In other words, is the climate of a community as important as the educational level of the labor pool? Clearly, legislation and community are important elements in call center site selection. However, are they the most important? This researcher's interviews with executives in companies with multiple call centers as well as interviews with call center directors have delineated a top three list of variables that strongly influence call center location decisions. These include:
- Labor costs/labor pool
- Tax incentives
- Labor skills
Without an available and affordable labor pool that has the necessary skills, the call center will not be able to function, no matter the community or legislative environment. Therefore, Read suggests that many factors help influence call center site selection decisions, and each center has unique requirements; however, three major site selection factors consistently rise to the top, suggesting that not all site selection variables are weighted equally.
What is a labor shed? A labor shed is usually represented in the form of a map that delimits a given distance or time from a point that people are willing to commute to and from. For example, imagine a red dot on a map representing a call center. Now imagine driving 5 minutes in one direction from the call center. Stop. Mark a white dot on the map. Go back to the red centroid call center dot. Drive 5 minutes in the opposite direction. Stop. Mark a white dot on the map. Repeat this exercise along major and minor roads leading from the center. Now connect the white dots together in a circle-like figure. This is a crude labor shed map representing a 5-minute commute to/from the call center. This process can be repeated for 10, 20, or 30 minutes, and so on. Eventually, the labor shed will become elongated along interstates and major thoroughfares and less elongated on small roads in neighborhoods. This labor shed, if used correctly, can help a manager effectively recruit and retain employees and market his/her center toward a specific demographic profile as well.