A Sponsored Article by Global Site Selectors. The Site Selection process evaluates many variables while conducting a locational quotient for their clients.
This is the second in a series of four articles that provides information about the specificity of the Site Selection Process. The articles will include an overview of the Site Selection industry; workforce-related issues during a site selection process; understanding the real estate transaction during the expansion or relocation process; and finally, understanding the role of State and local incentives in finalizing the Site Selection search.
The Site Selection process evaluates many variables while conducting a locational quotient for their clients. In the past, the top priority was location, location, location. However, in today’s world and especially in the BPO/Contact Call Center industry it is Labor, Labor and more Labor.
What About the Unemployment Rate?
Communities with 2%-4% unemployment will not even hit the “bullseye” for a new contact call center operation. Some of these communities have existing “plug and play” and “ready to operate” facilities; however, the community does not have an acceptable labor pool to supply an adequate workforce for the center to operate. This causes a higher risk and creates an immense dilemma to the C-Suite decision makers reviewing a new location for an expansion or relocation. The leading concern to the client is labor availability!!!
Many communities throughout the world believe that having a low unemployment rate is best for their communities. However, in the BPO/Contact Call Center industry, it is all about labor availability. In this specific industry sector labor is the highest overhead expense to the whole site selection process and finding the availability and adequate labor force is key to finding the right location to optimize the centers’ overall cost.
Communities with 5%-20% unemployment have a better opportunity to get a solid “win” in locating a BPO/Contact Call Center than one with lower unemployment rates. Of course, having an available building in a community with higher unemployment rates accelerates the process even more, but it’s all about labor availability.
Site Selectors look at these high unemployment areas first during their initial site evaluation. It also gives call center operators better options to locate within an area that has the greatest availability of employees in a global economy that continues to have decreasing unemployment rates.
Opportunities to Review for a New Location
So the question would be, Where is the labor?
After conducting numerous site selection evaluations, typically, the high unemployment areas can be found On-Shore in the Caribbean Islands and also in rural regions and inter-urban cities throughout North America
As an example, Barbados has an 11% unemployment rate and a workforce willing to work in the BPO Contact Call Center sector. Of the 11% unemployed, 9% have a higher education attainment and the citizens feel that the BPO Contact Call Center Industry is an exceptional career path in the country. Barbados also has adequate transportation for the employees. The country offers bus service to its’ citizens throughout the island, which allows opportunities for employees to get to work efficiently and on time.
Another example in North America and a place to evaluate would be in rural Arizona. Yuma has approximately 24.1% unemployment. Evaluating this area as a place to conduct business and find a quantity of labor to work within the industry is worthwhile for the continuation of growth for a company looking for a large labor pool that is Ready to Work. With high attrition rates in the industry, having a large pool of employees from which to choose allows a company to find the best employees and reduces higher attrition rates within the organizations’ operational functions.
Other areas in North America include the Native American Tribal Territories. Typically, the unemployment rate can be as high as 20%. With this type of labor pool availability, companies can look at these areas as a great area to draw employees to work in the industry. The Choctaw Nation in Southeastern Oklahoma has 7.2% in McCurtain County, Oklahoma. Access to labor in the area provides an adequate labor pool for potential sightings of a new BPO/Contact Call Center operation.
Inner-city hubs, such as the central business district of Detroit, where the unemployment rates are as high as 11.1%, have provided excellent opportunities to retain employees in the BPO/Contact Call Center sector. Detroit also offers inner-city transportation routes for the unemployed to get to the operation.
Wages and Unemployment
Wage rates are another variable for the site selection process. Typically, when regions and cities have high unemployment rates, a corporation can get a valuable and lower wage rate in the area.
Tempe, Ariz., was a key example of a great place to locate a Contact Call Center in the past. The community is home to Arizona State University, which has a student population of approximately 40,000. Access to the college student workforce has been, in the past, an exceptional labor pool and the wages were competitive in the industry sector. However, with the saturation of these centers locating to Tempe, many lower wage centers are being pushed out of the market. Wage rates have increased from the typical $10-$12 an hour to close to $20 per hour, as companies such as PayPal have located centers in the city and are employing up to 2,000 employees in one center.
With higher wage costs and saturation of these centers in Tempe, it has forbidden lower-paying BPO/Contact Call Centers to compete within the marketplace. These companies are now looking at low-cost areas globally that have an adequate labor pool, where the wages will be significantly lower.
Forward Trends
As the shortage of labor availability and wage rates increasing across the world, BPO Contact Call Center operators and owners will need to be aware of these changing employment trends. The C-Suite decision maker should review these specific communities with higher unemployment rates and lower wages. These new emerging markets will see new economic opportunities and so will the BPO Contact Call Center industry.
If you would like further information on the Site Selection process, please review our website at www.globalsiteselectors.com .