Call centers praised and criticized

By Staff and wire reports

More than 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.