Spokane Journal of Business

Call-center industry rises here

An estimated 4,500-plus people now work in such operations in Spokane, Kootenai counties

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What? Another call center coming to town?

You can almost hear the collective groan coming from people who picture the creation of more low-paying, no-benefit jobs here and the prospect of their home phone ringing more frequently at dinnertime.

Such perceptions, though, dont accurately reflect a business sector that has sprung uplargely over the last five yearsto employ an estimated 4,500 people or more in Spokane and Kootenai counties, with hundreds of additional jobs planned, economic-development and industry representatives say.

To most people, it connotes telemarketing, says Mark Turner, president and CEO of the Spokane Area Economic Development Council. However, he says, The vast majority of them flat out are not involved in telemarketing, and most of them pay industry-standard wages or better and offer good benefits.

Though there may be an impression that Spokane is attracting an inordinate number of call centers, perhaps due to the prevailing low wages here, it really just is experiencing local evidence of a national and global trend toward such centralized operations. In the U.S., Turner and others say, that trend has been spurred partly by deregulation of the telecommunications industry and by the growth of the Internet.

One of the latest examples of the trends effects on Spokane came last summer when ICT Group Inc., a Pennsylvania-based, customer-relations management company, announced plans to open a customer-contact center in the Spokane Valley that it expects to grow to more than 600 employees over the next few years.

Other examples abound.

Software Spectrum Inc., which employed about 585 employees here as of mid-December, says it hopes to increase that number to about 900 this year. (See story, Page A1.)

Dakotah Direct II LLC, the big Spokane-based telemarketing company, says it plans to add about 1,000 employeesaround 80 percent of them hereover the next month or two. It currently employs about 1,250 in Spokane and Kootenai counties.

Pitney Bowes Inc.s customer-service call center here has grown from about 275 employees a year ago to about 355 recently, and the company hopes to add another 100 or so workers here within the next two years. Spokane continues to be a great success story for Pitney Bowes, says Todd Friends, the centers director.

Guardian Life Insurance Co., which employs about 220 of its Spokane-area 672 employees in a member-services division call center, says it expects to boost that work force by an unspecified number due to an increase in its dental insurance business.

Safeco, the Seattle-based insurance and financial services company, which employed about 240 people at its contact center here as of mid-December, said it expected to increase that number to about 300 by the end of last year.

Bank of America employs 523 people at its bank-card services center here, and has no specific plans to expand that work force, a Seattle-based bank spokeswoman says. Still, she says theres potential for some additional employee growth, because the bank moved a commercial card center operationbut no employeeshere from Phoenix last year and melded it with the Spokane merchant card services operation.

Coldwater Creek Inc. employs about 400 people at a Coeur dAlene call center, up from about 325 a year ago, and expects that average off-peak-season work force to grow to around 425 by next yearfor an increase of about 25 employeesafter expanding temporarily over the busy holiday period.

Company spokesman David Gunter says some of Coldwater Creeks strongest call-center growth potential is in Internet-related positions.

Its difficult to get accurate counts on the total number of people employed in call centers here, statewide, or nationally because such centers are scattered throughout a range of industries, are referred to by other names such as contact centers, help desks, and customer-service centers, and vary greatly in size and function. Often, they operate quietly as departments within larger companies.

What they have in common is a reliance on telephones and, increasingly, the Internet for marketing products and services, providing post-sales support, handling financial transactions, or answering technical questions. Some specialize mostly in outbound calls or contacts; others handle mostly inbound communications, or a mix of the two.

Callcenternews.com, one of a number of Web sites serving that business sector, says call centers emerged about 30 years ago, when the travel and hospitality industries began to centralize their reservation centers as the first large-scale, high-volume telephone switches became available. Banks began using them, and the industry expanded further in the 1970s with the rise of the catalog-shopping and outbound-telemarketing movements. In recent years, many businesses have turned to them as a way to centralize processing and support functions and to take advantage of improved telecommunications technologies.

Linna McAuliffe, an industry observer here, estimates that call centers now employ 3,500 people or more in Spokane County and around 1,000 in Kootenai County. She says she expects those numbers to continue to grow at a healthy pace for the foreseeable future. She says recent studies estimate there now are 7 million call-center workers employed in the U.S. and project that number to double within the next two to three years.

McAuliffe manages a customer-relationship management (CRM) training program here that trains low-income job seekers for call-center jobs and is supported by a local consortium of call-center companies.

The 3-year-old certificate program, which McAuliffe claims has drawn state and national attention, is offered through Community Colleges of Spokane and is funded with welfare-to-work federal grant money. It currently is structured as an intensive 250-hour, five-and-a-half-week program. It has graduated 418 students since being founded, and has achieved a nearly 90 percent placement rate over that period.

We have built a curriculum based on industry needs. They want a program that takes weeks, not quarters, McAuliffe says. When the industry changes, we change. We are here to support the industry. The industry is our customer; the students arent our customer. The student is our product.

The program formerly was called call-center management, rather than customer-relationship management, but its name was changed to reflect the latter, more specific call-center niche that the program is seeking to serve, McAuliffe says. Most of the call centers here that the program works with specialize in that type of service, she adds. CRM companies typically offer a living wage, full benefits, good working conditions, and a career ladder for people who want to advance in management, she says. She estimates that starting pay at such companies here probably averages $8 to $10 an hour.

McAuliffe says that when the training program got under way, 12 call centers were operating in the Spokane-Coeur dAlene area that she was aware of, and now there are 34.

This industry, I think, really helps our economy. Its a very clean industry, and the people are treated well. Being able to affect change and being involved in the growth of an industry here its fun to watch this grow, and its probably one of Spokanes best-kept secrets, she says.

In addition to the program that McAuliffe heads, Community Colleges of Spokane offers a call-center program at Spokane Falls Community College that includes a one-quarter call-center specialist certificate; a two-quarter call-center team leader certificate; and a two-year call-center manager degree.

To be sure, Spokane isnt the only city in the region thats experiencing strong call-center growth. Marples Business Newsletter, a respected Seattle-based publication, said recently that call centers have been sprouting in Idaho like wildflowers after a spring rain. It cited a report in the Idaho Statesman, Boises daily newspaper, that the Boise area alone now is home to more than 20 call centers employing more than 7,000. Idaho Department of Labor figures estimated call-center employment statewide at about 10,600 as of the middle of last year, Marples said.

The Seattle newsletter said a Capital One Services executive told the Boise Chamber of Commerces annual outlook forum that call centers this year will have the fastest growth rate60 percentof any U.S. economic sector, and that by 2003, at least 75 percent of first customer contacts with businesses will be made via the telephone or Internet.

Callcenternews.com says the hottest areas of the U.S. for call centers recently appear to have been the South and Southwest regions. The centers are attracted by plentiful low-cost labor, available real estate for centers, good telecommunications infrastructure, and tax and job-creation incentives offered by state and local governments.

EDCs Turner says call centersor back-office operations, as he calls themhave sprouted up and flourished here without the benefit of government incentives or a strong economic-development focus.

Were not specifically targeting them, he says, but adds, Were gaining a reputation for being able to accommodate those functions, and were seeing more of those opportunities.

Call centers have been attracted to this area, he contends, partly because of the large pool of underemployed people here and because the Spokane area possesses a much more well-developed, high-volume telecommunications infrastructure than many larger urban areas.

Turner laments the unfortunate negative connotations that have come to be associated with the term call center and asserts that such centers now are providing a way for many low-income people here to rise out of poverty.

One of the biggest things theyre concerned about is image, he says of the industry. I worry that we maintain a hospitable attitude toward them. We need to, and they deserve it. If theres one thing we should be feeling good about its that these jobs hit that (poverty concern) dead on. Its not part-time retail.

Kim Crompton
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