centers praised and criticized
By staff and wire reports | published Monday, Aug. 15, 2005
two dozen call centers operate in New Mexico from Taos to Las
Cruces, and have drawn both praise for creating jobs and criticism
for low wages and high turnover.
Twenty-seven centers with a combined payroll of $625 million operate in the state, according to a survey 15 months ago by the New Mexico Call Center Alliance.
Clovis officials announced last month that an Illinois-based call center, SEI, has signed a lease to rent the old ClientLogic building, which employed about 230 call-center workers when it closed in January 2002 after 14 months.
SEI is expected to employ 75 when it opens later this summer, officials have said.
In all, the state’s call centers employ about 12,000 people and pay an average of $9.42 an hour and offer benefits ranging from 15 percent to 24 percent of the salary. With the pay, the average compensation is as much as $35,000. Twenty percent of the jobs are in management, paying at least $50,000 a year.
At least seven centers located in rural towns employ about 1,200 people, said Pat Vanderpool, executive director of TechConex, a rural economic development nonprofit agency.
“In every case, the wages paid are higher than the prevailing wage in the community, and health benefits are typically provided as well,” Vanderpool said.
The combined capital investment in those rural centers is about $7 million. The annual payroll is about $24 million.
The centers bring new dollars to New Mexico, making them economic base jobs, argues Noreen Scott, executive director of Rio Rancho Economic Development Corp. The city, which began recruiting call centers taking inbound calls a decade ago, now has six centers.
“Every one of these call centers offers health benefits, and almost all have a retirement plan and tuition reimbursement plan,” Scott said.
New Mexico made a major push for call centers in the mid-1990s. Former Economic Development Secretary John Garcia said that by 2002, they’d become a double-edged sword because they brought jobs without lifting the state’s average wage. The state at the time offered incentives to bring in all types of call centers, he said.
Today, the state Economic Development Department is careful in evaluating centers and does not recruit those for outbound calls at all, said current Economic Development Secretary Rick Homans.
“It’s a mistake to lump all the call centers into one category because it’s a very viable industry and one that in some cases provides really good paying jobs and makes serious investments in training,” Homans said.
He said the state avoids firms that offer low pay and want high turnover to keep wages low.
The average turnover in the industry is 30 percent, said David Butler, director of call center research at the University of Southern Mississippi and founder of the National Association of Call Centers.
Ann John, vice president of the New Mexico Call Center Alliance, estimated the average turnover in this state is 32 percent.
Critics contend centers don’t remain long enough to be a benefit to the state after the centers receive New Mexico’s incentives such as job training reimbursement and tax credits.
They cite center closings — last year’s shutdown of an MCI center that operated in Albuquerque for 15 years; Gateway Corp.’s closure in January 2002 after five years in Rio Rancho; and Stream International’s shutdown in July 2003 after less than three years in Silver City. The MCI shutdown cost 800 jobs; Gateway’s closure cost 345 jobs; Stream International cost 770 jobs from a rural area.
Fulcrum Direct opened in Rio Rancho in 1996 and closed two years later after receiving $1 million in job-training funds from the state and an $11 million industrial revenue bond from the city. Gateway received $3.7 million in state incentives and an $8 million city industrial revenue bond.
Scott said that if a company remains in a community for five to 10 years, it more than compensates for the state’s investment.
She also said that for every call center that left Rio Rancho, another one came in.
“Even if a company leaves, those trained people are still here, continuing to grow our economic base,” Scott said.
Vanderpool said New Mexico now has a cadre of workers with computer and customer-service skills that can transfer to nearly any industry.
Existing centers continue to expand, often hiring hundreds of people at a time. Three call centers in Rio Rancho announced plans last year to hire 1,000 people.
New Mexico also is attracting more centers. Just last month, SEI Information Technologies of Illinois announced it plans to open a bilingual call center in Clovis and would hire 75 people initially. Utah-based Sento Corp. said it will open a Spanish-language call center in Albuquerque and hire 150 people this year.
Cardinal Health Inc . plans to open a call center in Sherwood that will employ 500 people in “higher paying , higher skilled” jobs , the Metro Little Rock Regional Alliance announced Tuesday .
to employ 500 in Sherwood
Arkansas Democract Gazette | posted on Wednesday, Oct. 12, 2005
The call center will handle orders and customer support for Cardinal’s 35 , 000 health-care industry clients nationwide . Cardinal is a leading manufacturer of drugs and medical supplies, with $75 billion in annual revenue and 55,000 employees worldwide.
Because call-center employees will be helping pharmacists and hospitals solve technical problems, the jobs are going to require greater skills — and will pay better — than most other call centers in central Arkansas, said Jay Chesshir, executive director of the alliance.
Chesshir said the center would have a payroll of $16 million, or an average of $32,000 per employee annually. The average call center employee earns $26,480, or $12.73 per hour, according to the U.S. Bureau of Labor Statistics. Both Chesshir’s and the national figures include a wide range of jobs within call centers, from managers earning $80,000 or more to janitors earning under $20,000.
Cardinal Health, based in Dublin, Ohio, will begin interviewing applicants next week, open the center in January and reach full capacity by March, according to an alliance release.
“Little Rock has the capacity to handle that volume” of jobs, said David Butler, executive director of the National Association of Call Centers at the University of Southern Mississippi.
Central Arkansas is experiencing a call-center boomlet with two other centers totaling 900 employees unveiled since August. On Aug. 31, the alliance announced plans for online florist FTD.com to employ 250 at a call center handling florist orders in Sherwood. Pinnacle Business Solutions Inc., owned by Arkansas Blue Cross and Blue Shield, opened a 650-employee Medicare support call center in Little Rock on Oct. 5.
Call centers are a mixed bag for many communities, which often find them easy to attract but difficult to keep in the area, Butler said.
“You have to be careful [because] call centers are more mobile than the traditional manufacturing industry,” he said.
An auto plant can cost hundreds of millions of dollars, forcing the manufacturer to build lasting ties to the community, Butler said.
For call centers, the main cost to businesses is labor. So if another state — or another country — can offer cheaper workers, those jobs can easily be moved, he said.
It was a point underscored in remarks made during Tuesday’s announcement by Steve Peale, vice president of customer service project management for Cardinal.
“We could have put this anywhere in the country,” he said, adding that Sherwood is an ideal location. Cardinal is simultaneously opening a nearly identical call center in Radcliff, Ky.
Little Rock learned about the fickle nature of call centers the hard way when Southwest Airlines closed its 9-year-old reservation center in 2004, eliminating about 700 jobs.
But central Arkansas made a safer bet with Cardinal, because health services is one of the fastest-growing call-center industries, Butler said.
The key now will be for local economic development officials to maintain ties with senior Cardinal management, so that the company will have a reason to stick around if the labor market or health-care industry changes, he said .
Cardinal’s call center and similar projects also mark a gradual shift in central Arkansas to a service-based economy.
In the past decade, manufacturing jobs in the area have declined 28 percent, from 35,800 to 25,600, while the service industry added 39,000 jobs, employing 285,000 in August.
Chesshir described the call center as an important step toward a plan adopted by the metro alliance last year aimed at developing central Arkansas ’ economy.
“This is substantially larger than any other project we have announced thus far,” Chesshir said. Other than the FTD.com call center, the alliance also helped attract a 30-employee peanut butter jar factory to Little Rock in September.
The alliance’s plan calls for aerospace manufacturing, biotech and other ambitious projects. But call centers and small-scale manufacturing are also necessary for development, said Kathy Deck, associate director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville.
“Call centers that are a little bit specialized ... that’s great,” she said. “Wherever we can play to our advantages and use the existing industry base to help recruit like or related industries, that makes a lot of sense.”
Although it was the site — a 71,000-square-foot building that once housed the Furniture Row shopping center — that sold Cardinal, tax incentives also got the company’s attention, Chesshir said.
He declined to give more details on the incentive package. Such deals often include tax breaks on equipment purchases and credits for training local workers. Kentucky gave Cardinal $8 million in incentives for the Radcliff call center.
As it continues to attract more relatively low-skilled jobs to Arkansas, the alliance and other development groups also need to focus on making the work force attractive to more diverse, higher paying companies, Deck said.
That means investing in education as well as tax incentives, she said. “The folks in economic development have what they’re given, and sometimes in Arkansas that means a work force that isn’t as trained up to national averages,” she said. “Finding industries to come in and provide opportunities both to use the existing work force and increase the skill-set of the work force is a tough job.”
More information about the Cardinal call center is available at www.cardinalhealthcareers.com , or (866) 225-8974. Cardinal Health officials will hold an open house at Pulaski Technical College on Oct. 19 from 4-8 p.m.
Up on Dell?
BusinessWeek | posted Oct. 10, 2005
Gripes about tech support are on the rise, and the PC king is scrambling to upgrade
It didn't seem as if he was asking for much. When the CD drive on Peter Ulyatt's Dell desktop computer failed this summer, he called the support crew at Dell (DELL ), where he'd bought the $1,600 machine nine months prior. Armed with an extended warranty that cost him an extra $300, the Pasadena (Calif.) retiree got on the phone and waited. After sitting on hold for 45 minutes, a technician whom Ulyatt could barely understand came on the line and diagnosed a "software problem." Ulyatt's call, transferred to the software technician, was dropped. Calling back, Ulyatt waited on hold another 45 minutes, asked for the software desk, and waited a half-hour more before hanging up. "At the moment, I'm not high on Dell's service," says Ulyatt, who plans to buy two new PCs in a year or so. "When I buy again, I will look at others beyond Dell."
Ulyatt's ordeal is not an isolated case. All tech companies have some unhappy customers, of course, but recent surveys suggest the ranks of frustrated Dell Inc. owners are growing. Complaints to the Better Business Bureau rose 23% in 2004 from the year before, and they're up another 5% this year. And Dell's customer-satisfaction rating fell 6.3%, to a score of 74, in a survey by the University of Michigan. Dell's score puts it right at the PC industry's average for the study, in which Apple Computer Inc. (AAPL ) led the way with an 81. Still, it's a big decline, especially for a company that has often topped the list. "We've never seen a drop like this," says professor Claes Fornell, who ran the survey.
Plenty of people are going public with complaints. Media critic Jeff Jarvis has recounted his frustrations on his blog. Web sites such as ihatedell.net have popped up. Helaina Burton recently spent three hours talking to a half-dozen Dell reps -- all to solve the simple problem of a faulty keyboard. "I certainly won't buy another product from Dell," she says. "I will make sure that any other prospective Dell customer I meet knows what kind of treatment they'll get."
Could such sentiment lead to trouble for the world's largest PC company? Over the past decade, Dell's dependable support, combined with competitive prices and build-to-order convenience, made it the default choice for millions of consumers. Its market share continues to rise overall, and it holds 28.8% of the U.S. consumer market, up from 28.2% a year ago, according to researcher IDC. However, a sagging reputation could slow sales, jeopardizing the company's plan to reach $80 billion in revenues by 2008. In the most recent quarter, Dell missed its sales target, one reason its stock has dropped 18%, to $34, since the start of the year.
Dell is working to reverse the service slide. John Hamlin, senior vice-president of Dell's U.S. consumer business, says the company is hiring a few thousand additional reps this year and striving to reduce call transfers. Already, he says, hold times have been cut in half from earlier this year, and internal weekly surveys of 5,000 customers show a 35% increase in customer satisfaction from a year ago.
Now the company, which revolutionized how PCs are sold with its direct model, has plans to change how PC support is provided. On Sept. 28 it announced a line of higher-priced PCs, dubbed the XPS line, that will come with improved levels of service. XPS owners who call in for help will be routed onto shorter queues to dedicated teams made up of the company's "best" phone reps, says Michael A. George, general manager of Dell's U.S. consumer businesses. "The goal is for the vast majority [of XPS owners] to wait for less than five minutes."
That's one of several ways in which Dell will encourage customers who want more support to pay extra for it. In November the company will launch a slate of new offerings, including remote assistance so technicians can take control of the customer's PC to fix problems. And early next year Dell will introduce a series of one-year memberships so customers can opt for various levels of help, at various prices. One of the options will likely include a quarterly PC tune-up, in which a techie would remotely clean up the hard drive and check security settings.
All of this adds up to a quiet attempt to reset customer expectations in the PC industry. While execs won't say so publicly, the message is clear: That new PC you bring home comes with only the most rudimentary support. More hand-holding costs extra.
Indeed, Dell is rolling back some of the perks that now come standard. BusinessWeek has learned that in mid-October, Dell plans to redefine the term "free shipping" for its low-end models. Instead of delivering them to the customer's home, Dell will mail them to the nearest post office for pickup. These customers have to pay extra for home delivery -- although it comes standard with pricier models such as the new XPS line.
It's tough medicine that fits with Dell's pragmatic approach to business. The company is the No. 1 player in the U.S. consumer PC market. But sales to U.S. consumers carry margins of 6% -- compared with 11% for corporate buyers. The new "pay-up" strategy could help make sure the consumer unit doesn't eventually become a drag on earnings.
Some industry experts think Dell's plans are simply a practical response to plummeting prices. "Consumers want to have their cake and eat it, too. They want that $300 PC but expect the same support that came with a machine that 10 years ago cost $2,500," says Stephen Dukker, who founded home PC maker emachines Inc. in 1998.
Other key PC makers are increasing the pressure on Dell. Apple, which consistently ranks high in customer surveys like Michigan's, recently decided to start using chips from Intel Corp. (INTC ), making it a more direct competitor to Dell. And Hewlett-Packard Co. (HPQ ), Dell's biggest competitor, seems intent on distinguishing itself with customer service.
Over the past year, HP has launched several initiatives to build loyalty. One lets HP employees key in information on product glitches they hear about from customers, who then are supposed to receive a call from a rep within 48 hours. Another is a diagnostic tool HP developed to help consumers figure out what kind of problem they have, even if it doesn't involve HP gear. Dell won't help customers with non-Dell problems unless they pay extra. "Given today's digital lifestyle, it's vital," says Diana L. Bell, HP's senior vice-president of total customer experience. "We have to do more than say, 'here's the product, and catch me if you can."'
A common refrain from Dell customers is that the company seems to want to hide from them rather than help them. Edward Huebner, a Detroit sales manager, called Dell to ask about upgrading the software on a Dell DJ music player. He couldn't get the assistance he wanted on the phone, so he tried Dell's online chat service. But there were delays of as long as five minutes between responses. Huebner gave up and tracked down an answer on an online message board. Afterward he posted this parting salvo: "You've lost a customer for life." A Dell spokeswoman says a five-minute wait is "outside the norm."
Huebner's experience may be a warning sign. If customers don't go for the new "pay-up" plans and service keeps sliding, Dell may have to put more money into solving the problem itself -- or risk having more consumers defect to rivals.
2004 Article Title
|Nov. 18, 2004||Outsourcing actually creates U.S. jobs, study finds|
|Nov. 11, 2004||New academic center studies call center industry|
|Nov. 3, 2004||Hello There: Overseas call center go to great lengths to help their staffs sound American|
|Oct. 11, 2004||USM to promote call center industry|
|Sept. 30, 2004||USM will host call center conference|
|Sept. 25, 2004||Available work force makes county a perfect fit for operations, companies say|
|Sept. 13, 2004||Southern Miss to host call center conference|
|Aug. 8, 2004||Careers on hold|