Impacts of agglomeration on call centre operations: evidence from North West England

Call centres have until fairly recently provided a significant source of employment growth in the peripheral regions of the UK. Despite the potential for locational dispersal throughout the urban hierarchy, however, call centres tend to be highly concentrated in larger urban centres and variations in wage costs between local labour markets appear to have little influence over location patterns. This paper explores the consequences of high levels of agglomeration for recruitment and retention of labour within call centres in the North West Region of England. Using survey data, various measures of labour market stress are shown to be positively correlated with urban size. The results tend to confirm that businesses are prepared to absorb the costs of concentration in order to avoid the perceived risks of labour shortages in smaller dispersed urban centres.