Lower Operational Costs & Staff Turnover

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Introduction

Wollongong is a coastal city located in the Illawarra region of NSW, some ~80kms south of Sydney CBD and within a one-hour drive from Sydney International Airport. The location is compelling for companies looking to set up knowledge services who require;

  • A stable and skilled workforce.
  • Lower business operating costs than Sydney.
  • Higher quality of life.
  • Reliable business infrastructure.
  • Advantageous connectivity.

Performance

Key insights from the survey of Wollongong based organisations who participated in the research for this report include:

  1. A diverse range of knowledge services organisations operate within the Wollongong local government area with varied business sizes from larger ones such as Stellar, Department of Human Services and Australian Health Management to smaller ones such as AST Technologies, Microsolve and Conference National.
  2. Of the organisations surveyed, 79% of organisations expect an increase in FTE over the next 12 months. Of those forecasting an increase, the average is by 9.4 FTE (11% growth) per organisation.
  3. Average length of time in business within the area is 22.1 years. The high tenure within the area indicates a commitment to the location for a long term sustainable operation.
  4. A significant increase in Software Development, IT Support Functions, Sales and Marketing Functions, Application and Form Processing and Training and Development is forecast for existing organisations.
  5. The top areas of performance where Wollongong is excelling for current Knowledge Service centres who participated in this survey include:
    1. Reliable telecommunications & data links
    2. Quality of life
    3. Attractive labour rates/wage levels
    4. Lower staff attrition/turnover rates
    5. Proximity to key staff/management
  6. Knowledge service centres in Wollongong rate their overall satisfaction with their existing location highly at an average of 8.2/10.
  7. Knowledge service centres in Wollongong strongly recommend the location to other organisations with an overall Net Promoter Score of 47.
  8. Staff turnover in Wollongong is 8%, which is significantly lower than the turnover rate of contact centres across Australia (19%).

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Reasons for Choosing Wollongong

Great work life balance, cost of living and its strategic location are some of the reasons given for locating in Wollongong:

“Wollongong is a city on the up. Quality businesses are choosing to move here, lifting local employment opportunities and flowing benefits into the community. We now have so much more going on in local entertainment, dining and culture. It doesn’t feel like we’re missing out on what Sydney has anymore.”

— Peoplecare Health Insurance

“Wollongong has good transport links, including being close to an international airport, allowing NEC staff to easily visit our interstate and international clients. The Wollongong region provided a strong work-life balance opportunity for NEC staff. We knew we could recruit experienced IT executives who had been commuting to Sydney as well as new graduates from the University of Wollongong.”

— NEC Australia

Staff Turnover Indicative Cost Comparison – 150 seats

Based on our indicative calculations, the cost to replace frontline staff at a turnover rate of 19% for Australia, a 150-seat centre would have a total of $316,514 in costs to maintain operations. With a lower salary level and significantly lower staff turnover, the cost for the same size operation in Wollongong would be $96,923, a potential saving of $219,591 per annum.

This is a 69% savings for business in Wollongong compared to businesses in other parts of Australia.