X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

More and more people are working from home, and not just those that have started their own businesses. Many major corporations are also having their employees work from home as well. CB Richard Ellis recently came out with a report on this trend called “Exploring the Virtual Workplace With Home Agents.” It found that there are about 200,000 people working from home in a call-center job capacity, and that figure is expected to shoot up to 330,000 next year. So how will this increase in workers away from the office impact the commercial real estate industry? GlobeSt.com spoke with Kara Burns and Rob Marsh, both of CBRE’s Labor Analytics Group, to find out.

GlobeSt.com: Is part of what you’re doing helping companies decide if they need more home-agent workers and how to implement that strategy?

Burns: Not quite exactly. We do this labor-market analysis and will help the site selection in a lot of cases. We look at companies that often times have large, labor-intensive operations. We deal with a lot of call centers, as well as large back-office operations, and deal with a large gamut of different types of organizations and facilities. A lot of our clients do operate some sort of call center, and they’ve asked us a lot about these home agents. It’s a hot topic. What we are trying to do is help people think about the home-agent platform, how that integrates into what we have now, and as they’re evaluating their current portfolio help them figure out what labor markets are best suited for this type of operation. We’re helping them on the labor side to see how viable the markets are where they’re in and how they would work for home agents>

GlobeSt.com: How does the increase in number of home-agent workers impact the call center real estate sector?

Marsh: We’re providing guidance to a lot of companies about where they can source the labor. From our perspective, we’re kind of leading with labor and prior to a huge telecom engaging with a community to lease 150,000 square feet to house 750 people, it’s our job to tell them that those 750 people exist. What’s happened, when you look at the call center industry and back office, and we’ve tracked it for 14 year, is that major corporations looking to optimize their operations have exited major markets. Where I’m sitting in Phoenix was a hotbed for years for call centers. When that hotbed reached the saturation point, all of those major employers started to experience high turnover, wage inflation and their performance would drop because people knew they could go from one location to another easily. So they exited major markets and we to tertiary markets. The Dallas, Denver, Phoenix and Charlotte markets lost that employment to places. Now, in Twin Falls, ID, Dell is sitting there. In Mussel Shoals, AL, Walgreen’s is sitting there. The way that CBRE and our colleagues out there are tracking space, I’m not sure you’re going to see a big blip as a result of this trend.

In our report there is a projection that perhaps 330,000 people could be working from home by 2010. If you take the standard in the industry of 125 feet per person, or eight people per 1,000 square feet for back-office utilization, that’s going to be about 41 million square feet. But if you look at the stock that we’re tracking, it’s just over 1% of the inventory spread all over the country. And that’s not even accounting for all of these jobs that have already migrated out of the current stock of space and the current measured vacancy because they’ve migrated to markets that aren’t tracked as closely. You’ve got huge employers moving to smaller markets and that might be the one transaction that might happen in that community.

GlobeSt.com: But if is going to increase so much in one year, what will the picture look like by 2020?

Burns: Although we’re seeing a lot of growth right now, it’s kind of a perfect storm of conditions. Currently there’s an economic downturn and capital markets are very tight. If companies do want to grow this function, they don’t often have a lot of options. They can’t go out and build brick and mortar centers, so they’re forced to grow these home-agent programs in order to grow their operations.

The technology that allows these agents to work from home has really been around for a long time. Now with voice over IP, and the quality of that being so much better, there is a renewed interest in the home agent, since the quality won’t suffer. Some of the reasons we’re seeing the spike right now is the economic downturn and the technology that has been reintroduced to the market. Will that growth continue? I don’t think we’ll see such dynamic growth. Most of the companies that we’ve spoken to are dealing with home agents on a very small level. Home agents maybe represent 10% or less of their total call center workforce. It’s a small number, and while they’re starting to grow those functions, they still need to have to brick and mortar centers as well. They need a base. Most of the clients we deal with have some sort of hub where they’re operating in a physical space. Will the space be as much as they needed 10 years ago? Probably not. But as far as looking at the growth we’re seeing today, the risk to the real estate industry as a whole doesn’t accurately represent what we’ll see five years from now?

GlobeSt.com: So we don’t have to worry about call centers disappearing?

Burns: Certainly not. Over half of the people we spoke to require agents to work within a bricks and mortar center before they’re allowed to work from home. That might be a six-month or one-year period. There is always the need to have those seats within a bricks and mortar call center. That’s not going to change any time soon. They value the on-site training and that they can coach those employees along until they feel comfortable letting them work independently. There’s no fear that the call center industry is going away.

GlobeSt.com: Are there any industries that are more likely to experience this shift than others?

Burns: Jet Blue is a great example. The travel industry and hospitality, because what their agents are required to do is a routine task, taking reservations for hotels, cars and airline flights. We see hospitality really getting into the home agent trend and finding it very successful. The other companies are retail, in ordering and service. Again, functions that are fairly routine translate better to the home, rather than some of the more complex tasks. Where we’re seeing people hesitate is more along the lines of financial services, anything where there is account information or where the calls coming in aren’t necessarily routine, where they need more supervisory support. We’re seeing less of those employers moving over>

GlobeSt.com: Is there a perception that having employees work from home will reduce overall costs?

Burns: It depends a lot on the company. As companies are testing, most of the time they’re keeping those facilities and having a hub and spoke-type model. It may not be as apparent today simply because they’re still maintaining the space they’ve had all along, it’s incurring the fees of a new site. We asked companies about that: How are your financial goals? Do you feel like you’ve met them? Overall, almost half said their home agent programs were successful and they had met the financial goals that they had set. But I did talk to a number of companies where a lot of unexpected costs came up with the home agent model. The IT costs were through the roof because of the support that the home agents needed and their downtime was as lot longer than if someone was in house. They were losing productivity having to really work hard on their IT staff to get these people up and running again. But certainly in the long run there is the opportunity to save on real estate costs once everything is established.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.