The President’s Pen is a weekly blog written by Jonathan Smith, New Vision’s President and CEO about local economic development projects and initiatives. It also covers economic trends, workforce issues, business climate policies, and manufacturing news.
Our office has made contact with half a dozen national site selectors over the past couple months. These corporate real estate professionals help companies choose locations for new business facilities. According to trade magazines that track corporate investments, site selectors are involved with at least 30 percent of all company expansion projects in the United States. Given the profession's impact and influence, it's smart to stay in touch with these folks. We will talk with at least 20 site selectors this year as part of our efforts to market the region as a business location.
Recently we have been able to chat with several site location consultants about back office (call center) trends. The industry is doing well and it seems to be in an expansion mode again. According to King White with the Site Selection Group in Dallas, his firm had a strong year in 2010. White feels that the call center industry is pretty consistent , there are always companies in an expansion or relocation mode.
Jim Trobaugh with CB Richard Ellis's Labor Analytics Group also focuses on back office projects. Trobaugh said that the recession pushed call centers to lower costs and gain efficiencies, his office helped several companies consolidate their facilities to areas with the strongest labor supply.
Jeff Pappas with Arledge Partners concurred that the call center industry is perking up. Some of his clients are bringing offshore call centers back to the United States. He is also helping international companies look at back office company acquisition options and new facilities across the United States.
King, Jim and Jeff's firm have all brought clients to our Yakima so it pays dividends to stay on their radar screen. Understanding back office industry trends and their specific siting requirements is darn important if our community wants to recruit (and retain) call centers.
According to these gentlemen, the most important variable for call centers is labor. Their clients must be able to find qualified workers often for operations with 300-500+ employees. Secondarily back office companies are typically looking for a cost effective building where they can get established within three to six months. King White told us that there is currently 1.4 million square feet of vacant call center space available in 100 different cities. Prices for these turnkey facilities are ranging from $10-12 per square foot (not inclusive of maintenance, taxes and utilities) so it's a very competitive market for call centers today.
Yakima has several back office facilities, most notably Costco and Whirlpool. We have a great labor force for these operations and a few candidate buildings that could accommodate an expanding call center operation. What we lack is a truly turnkey facility and we know this is important. Costco and Whirlpool both snapped up existing call center facilities and these projects would not be here if we had not had a ready to go place for them to land.
Call centers come in a lot of shapes and sizes and we have learned (sometimes the hard way) to be discerning. We are fortunate that Costco and Whirpool offer good wages and benefits to their employees. We definitely want more call center operations. Patience and good screening of prospective call center operations can help our Valley attract businesses that are more stable and offer bigger impacts.