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Culture, Politics Carry Weight in Location Decisions

It is not just the cheapest phone calls or the most generous tax breaks/government grants that should steer you to your international site. There are about a dozen factors to weigh that will help you decide the $100,000 question — Where do I locate my call center?

First, a question: Is a single multinational (pan-European/pan-Asian/ pan-Pacific) call center the right solution? There is a middle ground between having a single call center per continent and one in every country; and the solution is regional call centers. If you have sufficient critical mass of market in any given country/language, it may be worth having a series of language-based regional centers. This will help you avoid what is undeniably a problem for many: finding suitably qualified agents with language ability. In fact, a series of regions are forming an alliance — similar to the airlines' “Star Alliance” — to help companies that are looking at this sort of regional solution.

If, however, you have already decided to set up a pan-continental solution, here are 11 factors to consider.

Telecommunications. Do not be fooled by the hyperbole of claims “our telenet is the world's most modern,” a claim made by many countries. The network in almost any country that is generally considered for a multinational solution is good enough for modern call center requirements. As to the price of phone calls, they are a commodity, freely negotiable. There are prices, there are listed discounts and there are negotiable (unlisted) discounts. The real problem here is giving a fair picture of expected traffic to carriers so they can present an estimate of costs. (Do not be fooled by the various international tables of “cheapest telephony” — these are based on a hypothetical “basket” of calls, which is irrelevant unless your call pattern corresponds with the basket.) Do not chase yourself silly finding cheap calls — the real savings are to be found with costs of people, grants and tax breaks.

People. Whether you need fluent, native language ability or good “learned” language is a matter of your customers' and your taste. The main consideration is whether your agents meet the expectations of the caller. Language ability is, of course, an important factor in any multinational operation. Cost, too, is important — but see that you are comparing like with like. How many working hours are there per week? What must you pay in addition to salary, and is this included in the figures you compare? The cost of social insurance, pensions, lunch, travel, — these are just some of the factors to be considered in addition to salary. In some countries an employer has to pay 13 or 14 months salary. The list is long — just be sure you are comparing apples with apples. And check the date/rate of currency conversion when comparing tables.

A couple more problem areas with people:

* “Multilingual call center agent” is still not a category found in many countries' employment statistics. One country might be quoting a bilingual salesperson to compare with another's trilingual secretary to compare with yet another's multilingual sales support.

* Check for rates of and reasons for absenteeism.

* Check for the degree of unionization.

* Some areas, attractive because of cheap staff, have now acquired such a large call center industry that the churn of people, with the consequent costs of recruiting and training, are off-setting the cheapness of the people.

Legislation. There are three main areas to watch for:

* Employment legislation. (Hours they can work; ergonomic requirements of the workplace; right to time off work).

* Data protection. (Europe is acquiring some fairly uniform laws in this area, although Germany and Denmark are still tough.)

* Consumer protection. (Though one of the problems is — are consumers protected by the laws of their own country or those where the call center is? There is no watertight solution).

See related article on this page.

Property Prices. Most of the international tables compare capital cities. Only in rare cases is it necessary to place a call center in a capital — so make your own comparison of other metropolitan, or greenfield, areas. See that you are comparing similar rates of currency conversion.

Tax Breaks/Grants. This is an area where there is a lot of money to be found. Without going into detail, the four areas that can generally provide economic support are:

* Subsidy toward employment cost.

* Subsidy toward capital investment.

* Subsidy toward training.

* Tax reductions.

Generally speaking, the best breaks cannot be acquired via consultants — you will have to discuss your needs with development agencies yourself. A word of advice: Do not let the level of economic support be the only guiding factor in your decision.

Inward Investment Agencies. Every region has its own. Remember, they are paid to sell to you. By doing some homework, using a checklist such as this article, you will be able to get very valuable help from them and uncover the areas where their arguments are a little thin. Some will point you in the right direction to find answers to your questions — others will find the answers themselves, and even help with finding office space, staff, or negotiating cheaper phone rates.

Communications. The call center must be easy for the staff to reach, of course. But it should also be easy for you, or your fellow-managers, to reach. Is there an international airport close by? How do you travel from there? Is there a good hotel?

Telcos. Some understand and appreciate the value of call centers, others don't. Ensure that you can count on qualified help from an enthusiastic and knowledgeable carrier.

Political Stability. A factor often considered is the stability of the community to which one plans to move. It is important to know that taxes and grants, for example, will not change dramatically if there is a shift of government.

Cultural Compatibility. Does the culture of your proposed location concur with your company culture?

Will I Like It There? This subjective question is important, because if the answer is no, you may find that others think the same way. It will be hard to recruit, and nobody from the “head office” will make the effort to visit them, with the result that they will live a life of their own.

Philip Cohen, is an international call center consultant based in Sweden and chairman of FEDMA Teleservices Council in Brussels. His e-mail is [email protected]

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