by King White, on Jun 26, 2017 4:39:27 PM
The reshoring of U.S. call center operations continues to put pressure on labor markets across the United States. Many of these call centers that were once choosing offshore and nearshore locations like the Philippines, India, Costa Rica, Dominican Republic, or El Salvador are now choosing the U.S. as the preferred geography during the site selection process. This trend, compounded with a desire to be in more scalable, larger metro areas, has caused the call center worker population to cluster in certain metro areas.
To monitor these trends, Site Selection Group maintains a database of where call centers are located as well as their daily expansion and contraction activities. To share some of this call center site selection market intelligence, I have pulled a list together of the top 25 metro areas with the highest amount of call center workers. In addition, I have identified a few things to look out for during your next search for the optimal call center locations to expand.
Wage inflation risks are higher in dense call center labor markets
With labor conditions tightening, wage inflation is a major concern of most call centers in the U.S. Call center wage inflation in the U.S. has been relatively flat since the Great Recession as compared to offshore and nearshore labor markets that were having 5-10% annual wage inflation over the same period of time. Today, call centers are faced with a lot more risk of higher wage inflation which I would estimate to be 3-5% annually over the next few years. This will likely result in a $1-2 per hour wage increase for most call center positions, especially in the more densely populated call center locations identified below.
New minimum wage laws are going dramatically shift call center growth trends
The new minimum wage laws that are taking effect are going to cause not only call center wages to increase but also a potential exodus of call center operations from these locations as well as these states being eliminated early in the site selection process. Site Selection Group recently released a whitepaper entitled The Impact of Minimum Wage Increases on Corporate Location Decisions. Historically, popular call center destinations included Phoenix where the minimum wage is going to increase to $12 per hour. This is going to create some significant challenges on employers who are forced to compete with fast food restaurants paying the same wage as a call center.
Top 25 metro areas with the greatest number of call center workers
The battle to attract experienced call center workers continues to be important for both outsourcers and captive in-house call centers in the U.S. The desire for quality over cost savings is a uniquely new phenomenon in the call center site selection industry that clearly has its risk. To help identify some of these geographies, we have scoured our proprietary database and identified the below 25 metro areas with the highest number of traceable call center employees. It is important to note that I removed some of the mega metro areas such as New York City, Los Angeles, Chicago, and other metro areas where reliable call center employment data does not exist. The end result is the following list of metro areas that have successfully attracted numerous call center operations over the last 20+ years
Top 25 Metro Areas with Greatest Number of Call Center Workers
| Rank | Metro Area | State | Estimated Total Call Center Employees |
|---|---|---|---|
| 1 | Atlanta | GA | 121,480 |
| 2 | Dallas | TX | 115,837 |
| 3 | Phoenix | AZ | 109,764 |
| 4 | Tampa | FL | 69,189 |
| 5 | Houston | TX | 67,848 |
| 6 | St. Louis | MO-IL | 54,345 |
| 7 | San Antonio | TX | 53,638 |
| 8 | Charlotte | NC-SC | 52,231 |
| 9 | Orlando | FL | 41,447 |
| 10 | Denver | CO | 35,188 |
| 11 | Pittsburgh | PA | 33,009 |
| 12 | Cincinnati | OH-KY-IN | 32,917 |
| 13 | Nashville | TN | 32,071 |
| 14 | Salt Lake City | UT | 30,193 |
| 15 | Virginia Beach | VA-NC | 29,499 |
| 16 | Columbus | OH | 27,766 |
| 17 | Detroit | MI | 26,607 |
| 18 | Jacksonville | FL | 25,290 |
| 19 | Austin | TX | 24,929 |
| 20 | Las Vegas | NV | 23,778 |
| 21 | Buffalo | NY | 22,461 |
| 22 | Tucson | AZ | 22,163 |
| 23 | Indianapolis | IN | 20,591 |
| 24 | Kansas City | KS-MO | 20,573 |
| 25 | Louisville | KY | 17,813 |
Source: Site Selection Group, Local Economic Development Organizations
Conclusions
The call center site selection process continues to be more of an art than science. Data like the list above is only one of many factors you need to consider when looking for that optimal call center location. Hopefully, this list provides you some great insight into some of the historically most popular locations in the U.S. Please let me know if you have any questions or need some help with your next call center site search. I can be reached at kwhite@siteselectiongroup.com.
