Customers require, and demand, excellent service, support, and sales assistance. But when disasters threaten and strike, they may not be able to receive them by contact centers in a timely manner, or not at all. Hence the need for a sound business continuity strategy.
While work-from-home (WFH) has long been a key element of business continuity – one that also appears to have become permanent to varying degrees as a result of the COVID-19 pandemic – not a few companies prefer to have at least some of their agents work at brick-and-mortar facilities.
So what are the best ways for centers to minimize the risks and impacts from disasters in their site and facilities strategies? To find out we turned to two leading site selection experts, John H. Boyd, Founder and Principal, The Boyd Company and King White, CEO, Site Selection Group.
Q. Are you seeing changes in the priority given to avoiding/minimizing disaster risks for contact center site selection decisions?
John H. Boyd:
Absolutely. Continuity of operations is a growing site selection consideration for all our contact center clients.
The COVID-19 pandemic, government-imposed lockdowns, unusual weather occurrences, supply chain bottlenecks, and the Great Resignation have all served to heighten the concern over disaster risks – both natural and man-made.
We are also seeing a growing concern about climate change in coastal areas – especially in high-growth South Florida where there have been several highly publicized infrastructure failures like coastal and street flooding and water main failures in recent years.
Hurricanes like Hurricane Harvey just a few years ago disrupted not only contact center operations but virtually shut down many cities like Houston, Galveston, and other Gulf Coast markets for days.
Also, our site selection due diligence includes heightened concerns about wildfires and subsequent electrical grid issues in California: a state that is having many business climate, labor law, and tax challenges for the contact center industry.
These challenges are focusing a great deal of site selection attention to Western U.S. locales that share the same Pacific Time Zone.
An especially popular option is Northern Nevada – particularly for San Francisco Bay Area companies wishing to relocate to the state for its positive business climate, which features both the lack of a personal and corporate income tax and more favorable labor laws, including right-to-work legislation.
Look for cities in the greater Reno area like Minden and Gardnerville to be popular landing spots for contact centers leaving the Bay Area.
Eastern Washington State with low cost and green-friendly hydro power is another market poised to benefit from the Bay Area exodus. This includes small market Washington cities like Othello, Quincy, Moses Lake, and Ritzville.
Business continuity has grown into much more than “natural disaster” events since COVID. The biggest trend now is geographic diversification due to COVID and labor market conditions.
Companies are really trying to balance their exposure to any single geography that might get impacted by COVID and shut down.
Companies were too concentrated into the Philippines which caused the rapid growth in the LACA (Latin America-Caribbean region). It is very similar for labor.
Companies are diversifying their geographic footprint through WFH. It has really changed the dynamics of business continuity strategies.
Q. Have the following developments significantly impacted managing contact center disaster risks?
1. WFH coming of age
John H. Boyd:
This is a time of unprecedented workforce mobility. In fact, WFH, at least on a hybrid basis, has emerged as a major HR recruiting and retention tool, especially with today’s historically low unemployment rates and the impact of the Great Resignation.
Data requests coming into our firm show a strong interest in lower-tax states that are viewed as more desirable for transferred workers wishing to lighten their tax burdens as one means to deal with inflation. States without a personal income tax like Nevada, Texas, Tennessee, and Florida show well on this front.
We are also seeing an uptick in interest in no-income tax South Dakota – particularly from companies looking for a Central Time Zone, mid-continent contact center location, and from companies relocating from the proximate and more costly Minneapolis metro area. South Dakota cities like Sioux Falls and university towns like Brookings and Vermillion are poised to benefit from these trends.
WFH is really how companies are dealing with disaster risks. If companies can source workers virtually then it works.
However, many of them are implementing a hub-and-spoke strategy to where the agents live within 60 miles of the site: which is still exposed to major weather and blackout issues.
2. The rise of cloud computing/contact center as a service (CCaaS)
John H. Boyd:
Today, CCaaS is a booming sector of the contact center industry. Our BizCosts.com unit has CCaaS market offerings reaching $32.6 billion in 2025, up from only to $17.2 billion in 2020.
CCaaS is being adopted by both well-established contact center clients like JP Morgan Chase, Visa International, Progressive Insurance, and TD Bank, as well as by a number of smaller, start-up clients.
Cost savings, scalability, and cloud access to sophisticated functionalities such as artificial intelligence (AI) make CCaaS an especially attractive avenue for start-up and up-and-coming contact center operations.
When companies were forced to WFH, it forced companies to upgrade their technology to cloud based platforms. Cloud upgrades enabled WFH which created redundancy by not being reliant on only operating within the facility.
Hosting facilities would be in data centers. Co-located data centers are fully redundant, which enables less dependence on on-premise data centers that are not hardened like a true data center. That also enables WFH.
Q. Can you rank-order list the events centers are most concerned about? Have these changed since before the COVID-19 pandemic, and if so, why?
John H. Boyd:
1. Extreme weather is all more significant as site selection determinants than ever before.
Examples include hurricanes that have impacted Gulf Coast and South Atlantic states in recent years, severe snowstorms like we have seen in the Upper Midwest, upstate New York, and New England, and crippling ice storms snarling commuting in Atlanta. Also, unprecedented wildfires that have wreaked havoc in both Northern and Southern California.
2. Pandemic-related shutdowns by state and local jurisdictions are also being studied and factored into continuity of operations algorithms by many of our clients.
The contrast between a more open regulatory posture in states like Florida, Tennessee, and South Dakota versus a more closed, restrictive approach in others like New York, California, and Illinois and by most Canadian provinces, is another element of the site selection equation born out of the pandemic.
3. The housing crisis, including the lack of affordable housing for contact center workers, has emerged as another man-made risk and site selection factor for many of our clients.
Housing affordability is especially being watched in overheated residential real estate markets like Miami, Fort Lauderdale, and Palm Beach County in South Florida as well as in major contact center hubs like Phoenix, Las Vegas, and Nashville.
4. Crime and lawlessness – now documented at record levels – in major U.S. cities like New York, Los Angeles, Philadelphia, Chicago, and St. Louis are another man-made risk.
These risks are often under the radar screen and not talked about publicly by fleeing companies. But nonetheless they are an increasingly pivotal factor in a company’s decision whether to expand locally or relocate to a location where its workforce feels more safe and secure.
5. The recent U.S. Supreme Court decision to overturn Roe v. Wade and women’s right to an abortion is an emerging factor now playing out in the contact center location equation.
In the battle for labor in the post-pandemic Great Resignation period, look for contact centers to play all their recruiting cards, including more remote work options, offices equipped with all the comforts of home, and even public stances on contentious political issues like abortion.
Contact centers with their heavy reliance on women and with their typically higher rates of turnover, will find themselves very much in the crosshairs with the emergence of abortion access as a site selection determinant.
“…women’s right to an abortion is an emerging factor now playing out in the contact center location equation.”
—John H. Boyd
At this early point, the major fallout that we are seeing is coming from states like New Jersey and Illinois with their proactive governors – Phil Murphy in New Jersey and J. B. Pritzker in Illinois – aggressively reaching out to companies and incorporating abortion rights into their promotion narratives.
These blue states are seeking to attract new companies from red states in the Sunbelt, especially Texas, which have been on a run attracting new corporate investment and jobs from other blue states like California and New York, and also Illinois, since 2020.
1. COVID-19. Forced closures due to the pandemic.
2. Blackouts. The mass power outages in Texas during the freeze was eye-opening.
3. Weather. Extreme weather has become much more prevalent. There seems to be much more extreme weather conditions including tornadoes, etc.
4. Hurricanes/Typhoons. U.S. hurricanes and typhoons in the Philippines are concerning to clients.
Q. What steps should companies take in selecting and fitting out their contact center buildings to limit the impact of disasters?
John H. Boyd:
We are seeing more and more retrofitting of existing contact center space to include more cubicles. There also is a trend away from open space that has dominated office architecture for most of the past 20 years or so.
Also, our clients are actively undertaking modifications to their contact center heating, ventilation, and air conditioning (HVAC) systems to help reduce the spread of the coronavirus by purifying air, improving ventilation, and managing airflows.
With recent power outages and rolling blackouts occurring in places like California and Texas, backup power systems are getting more and more attention, as are a number of cloud-based backup contact center solutions allowing users to run applications from virtual servers.
Contact centers should look at enhanced HVAC systems. Also, larger workstations with slightly higher partitions and touchless door entry. The days of 2×4 workstations are gone; we are seeing 4×5 workstations and also standup desks to be closer to the new normal.
Backup generators are the primary item to protect power that our clients require. A generator needs to be large enough to support running both the mechanical/electrical of the building and the workstations. It is typically a $100,000-$250,000 cost depending on the size of the center. Contact centers also need UPS systems.
The other item is dual fiber from separate providers and dual power from separate substations. They provide multiple and redundant channels and capacity for business continuity and demand growth and spikes.
Having more than one provider supplies backup in case their network goes does, which happened in Canada recently with Rogers Communications (Ed. Note: see sidebar).
Smaller call centers typically don’t plan for this level of redundancy, but the larger 300-plus seat call centers typically do.
The Rogers outage [Ed. Note: see box below] is a great example of why you need that. Think about the massive amounts of lost revenue generated from call centers doing sales functions such as eCommerce, reservations, sales, etc.