Reasonable labor rates, an abundance of workers and plentiful real estate in the Southwest, Southeast and Midwest have attracted the majority of U.S.-based call and contact center operators, who are reshoring some of their work, to the United States. Texas, Michigan, Ohio and Kansas are being favored by call center operators who are now choosing to build new facilities in the major cities located in the Heartland. Companies are moving jobs back to the United States, in an effort to consolidate and eliminate a lot of the redundancy in their real estate assets. Many companies that rely on offshore contact centers have also noted a dwindling labor-cost differential, as workers in these developing markets press to join the middle class. While the recession in the United States, and increased unemployment, have recently made hiring US workers and reshoring a more attractive option.
Those who have implemented reshoring efforts have typically selected more urban markets, over the mid-sized and small cities which have been favored in the past. Ultimately this has been attributed to the large labor pool in these more densely populated areas. Contact and call centers are plagued by high turnover rates, due to the nature of the job roles offered to workers. Larger populations promise a higher rate of success, with regards to filling open positions over a sustained period of time. However, labor rates and taxes tend to be higher in these urban areas and larger cities. The balance between affordable and sustainable talent is a delicate one to strike, regardless of locale.
Taxes and the cost of overtime labor are two metrics most often overlooked by employers beginning to evaluate their options for reshoring. This is primarily because these initiatives are often launched in the human resources or procurement departments, where they are purely focused on comparing a targeted set of costs. These departments do not typically consider the local costs, beyond those initial side-by-side comparisons. It’s important to invite more departments as well as stakeholders to these discussions, to ensure the appropriate perspective is represented and to align any reshoring efforts to the corporate strategy and culture.
Balancing short-term needs with long term objectives is vital to the offshoring versus reshoring decision-making process. For example, companies which are driven to achieve a specific cost savings target will look first at current wages as the most important consideration. However, once they consider their long-term growth and production cycle planning, along with the amount of overtime anticipated, the attractive, inexpensive markets become more expensive than other markets with higher base wages, such as the Midwest and Southern United States.
Reshoring has become a hot topic in the last 18 months, as more companies are recognizing the plausibility of onshore or near-shore alternatives to their current offshore strategies. In order to create a more positive customer experience for contact or call center customers, and reduce churn rates, some call center operators are training their newly hired workers to state their locations in their greetings, when answering phone calls. While consideration of the onshore cost efficiencies or risk mitigation plays a major role in call center operators’ decisions to bring jobs back to the United States, it would seem that a key driver may in fact be the feedback from the very vocal minority, who are dissatisfied with the reliance of these companies on offshore labor.