Call centres

Citation

(1999), "Call centres", Property Management, Vol. 17 No. 1. https://doi.org/10.1108/pm.1999.11317aab.016

Call centres

Call centres

Keywords Offices, Occupation

"Call centres are a strategic business tool which have the potential to bring about a profound change in the way companies are organised and also in the way they use, procure and fund new floor space", comments Frank Eul, Director of Corporate Real Estate Services at DTZ Debenham Thorpe.

According to a new research report, Call Centres, September 1998, just released from DTZ Debenham Thorpe, anticipated growth in the call centre sector over the next five to ten years would have a significant impact on the UK commercial property market. Current growth estimates reflect a requirement for approximately 9-11 million sq. m of commercial floor space: around 16 per cent of all existing office stock in the country, by the first two years of the next century.

The pan-European market segment is growing by 40 per cent per annum, but remains largely untapped by call centres based in the UK. There has been stiff competition from The Netherlands and the Republic of Ireland. According to DTZ estimates, only around 20 per cent of existing UK call centres handle multi-national business. Given the increasing importance of the European market and access to an English-speaking and multi-lingual labour force, the UK offers companies significant opportunity for further expansion, but access to language skills will be critical.

Other factors likely to sustain demand for call centres within the UK include:

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  the continued move towards a 24-hour society; at present only one in five banks is open 365 days a year 24 hours a day;

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  further growth in direct marketing sector.

Finding the right locationCompanies looking to set up or expand new call centre operations are faced with a complex inter-play of criteria that must be considered when selecting a suitable location. Key criteria include:

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  Staff availability: cost, turnover and productivity are critical forces as staff costs account for 60-70 per cent of the total life-time of costs of most centres.

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  Flexibility of the local labour market. This is largely dependent on legislative working practices which vary widely across Europe and enhance the UK's position at a pan-European level.

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  Property availability and costs are major determinants of a successful location. While direct property costs are relatively low compared to staff costs, property can present restrictions to companies if its inflexibility compared with other overheads is not recognised at the early planning stage.

"Because of the dramatic rate of growth in UK call centres there is already evidence of significant overhearing of the labour market in several locations. This, coupled with high rates of staff turnover, point to occupiers having significant staff problems in the near future if they are not extremely careful about their choice of location", comments Stephen Nicol, director at DTZ Pieda Consulting.

Outlook

Call centres have become an important component in the drive for competitive advantage. Based on current trends, it is anticipated that the number of call centres in the UK will continue to expand and evolve over the next five to ten years. Given their complete locational flexibility, call centres are likely to increasingly be clustered in the most cost competitive locations with sufficient labour supply to avoid local wage spirals.