Friday, May 20, 2016

Is it time to reconsider call centers?

By Matt Tarleton, Principal, Vice President

It was announced this week that Convergys – a provider of various information management, billing, and business support services – will bring 450 new call center jobs to Columbus, Georgia. These call center announcements are often met with measured enthusiasm, tepid applause, and occasional indifference among community leaders. Call centers have gotten a bad rap and in some cases, deservedly so. But not all call center projects are the same. While many are derided in economic development circles for low wages and frequent turnover, these are generalizations and at times they are not only inaccurate but also misguided perceptions of a project’s potential value to a community.

Customer service representatives are the most common occupation in the telephone call center sector nationwide (more than 46 percent of all jobs); these are the workers we picture when we think of a call center. According to Economic Modeling Specialists, Intl. (EMSI), the median hourly wage paid to a customer service representative employed in a call center in the United States in 2015 was $15.27. This exceeds the median wage paid to a variety of other occupations that employ millions and require some on-the-job-training but no further formal education beyond high school: medical assistants, nursing assistants, pharmacy technicians, freight movers, shipping and order clerks, receptionists, and nearly every occupation in the retail and food service sectors, including management and supervisory positions, to just name a few.

Team assemblers – the most common occupation within the “Advanced Manufacturing” sector that so many communities and region are targeting – earn a median wage of $13.95, roughly $1.30/hour below the median wage of a call center customer service representative. Has that stopped us from pursuing advanced manufacturing?

So where does the disdain for call centers come from? In 2015, just 18.4 percent of all occupational employment in the telephone call center sector earned more than the national median for all occupations ($21.13). So that’s why we don’t target call centers, right?

Well, just 14.9 percent of all occupational employment in the transportation and warehousing sector earn more than the national median. That hasn’t stopped nearly every community with an interstate interchange from targeting distribution operations.

Overall, more than 41 percent of our nation’s jobs pay a lower median wage than that which is earned by customer service representatives.

As the data illustrate, call center projects can provide employment opportunities with wages that are comparable to or exceed the wages of key occupations in business sectors that economic developers frequently target, from manufacturing to distribution. And they can provide a full-time employment opportunity with salary and benefits that is a desirable alternative to many individuals lacking formal education beyond high school and working in other customer service arrangements in sectors such as retail, food service, or hospitality.

But call center projects can also help advance other community and economic development objectives. The Convergys announcement in Columbus is a great example of one such ancillary benefit: the reuse of an existing, vacant facility. Convergys was fortunate to find a building that has recently been vacated by a similar operation. In many other communities, call center projects can represent greyfield redevelopment opportunities. Aging or obsolescent “big box” retail spaces are often highly flexible with abundant parking, key requirements of many call center projects.

Many negative associations have prevailed when it comes to call center projects, and the sector has certainly deserved some of the criticism that it has received. But call center projects can be a valuable addition to a community under certain circumstances. We’ve spent years dispelling myths about American manufacturing; perhaps we need to take a closer look at call centers and some of the myths that persist.