Outsourced to Ohio: Call centers create thousands of jobs statewide

Call center companies now rank among Ohio’s largest job creators alongside distribution warehouses, automakers and banks, according to records provided by Ohio Development Services Agency.

Credit card company Barclays Services LLC is eyeing Greater Cincinnati — in particular a location in Hamilton — to open a call center, according to plans revealed last month by economic development agencies. The potential for 1,500 new jobs at Barclays quickly rose to near the top of the list of the largest job-creating business projects announced in Ohio over the last decade, according to the state development department.

The British-based bank’s credit card business is behind only online retailer Amazon.com Inc., which first announced plans in May to open cloud storage and fulfillment centers in Central Ohio, creating about 2,000 jobs; and JPMorgan Chase & Co., which promised in past years to create about 1,500 jobs in the Columbus area in exchange for tax breaks even though the bank has actually created more.

“You don’t have to have all your back-office on Lexington Avenue in Manhattan,” Johnna Reeder, president and chief executive officer of REDI Cincinnati, told attendees at the Greater Hamilton Chamber of Commerce’s Business Expo luncheon in June. REDI leads the region’s business attraction efforts. “A $40,000 to $70,000 a year job in our region is a great job and that’s lawyers and accountants and call center operators.”

Also in the top 10 for Ohio’s biggest job deals is VXI Global Solutions, which reached a tax credit agreement in exchange for pledging to create about 1,000 jobs for a Youngstown-area call center; and online retailer zulily Inc., which announced separately plans to open distribution centers in Franklin County with more than 1,000 jobs as well as a 900-job call center in Gahanna, also in Franklin County, according to state records.

Call centers create hundreds of jobs at a time, but they’re criticized for paying below-average wages. All Ohio occupations paid an average hourly wage of $21.11 in 2014. Customer service representatives in Ohio earned a mean hourly wage of $15.95, according to the U.S. Bureau of Labor Statistics.

However, industry supporters say call center jobs pay above minimum wage and provide a career opportunity with flexible hours and without requiring staffers to obtain a costly master’s degree.

“They’re bringing lots of jobs … no other industry brings in really those types of numbers,” said Christine Haerich, senior vice president of Indianapolis, Ind.-based Professional Association for Customer Engagement, a trade group representing more than 400 member companies.

Ohio ranks as one of the top 10 states for call center employment in the country with 77,842 workers in 2014, according to jobs4america, a business coalition formed in 2012 to advocate for more call center jobs to return to the United States from overseas. They worked at 281 call centers in Ohio, according to the nonprofit group whose founding members include Hilton Worldwide, American Support and StarTek Inc., which just opened last month a call center in downtown Hamilton.

Texas has the most call center employees, according to jobs4america.

While jobs4america counts the number of employees working at call centers, the Bureau of Labor Statistics tracks customer service representatives working in any type of industry or setting. Based on government statistics, the number of people working as customer service representatives in Ohio is still shy of pre-recession levels. Although, it’s rising.

As of May 2014, the occupation employed 82,200 Ohioans, compared to 77,630 in 2013, and 87,590 in 2005, according to the federal government.

jobs4america exceeded its original goal to see 100,000 new contact center jobs added in the U.S. by 2014, Jack Wilkie, the group’s president, said.

“We found that it was very difficult for a lot of brands to reverse field after they had gone offshore and admit they made some mistakes. The market spoke. The brand was hurting, the service was poor … They were losing opportunities to sell after the call,” Wilkie said.

Rising labor costs overseas and brand image have driven more call centers to relocate from destinations abroad such as India, Philippines or Vietnam, said Haerich, of Professional Association for Customer Engagement. These companies are also encouraged to open in the U.S. with tax credits and financial incentives. When companies choose locations in the middle of the country, they’re taking advantage of cheaper property and labor as well as places that need the jobs, Haerich said.

Ohio is ranked 17th lowest cost of living in the U.S. based on an index of grocery, housing, utility, transportation, health and other costs developed by the Missouri Economic Research and Information Center, part of the state government’s economic development department. Mississippi had the lowest, and Hawaii the highest, costs of living.

“When you’re talking about where is the best place for customer service centers or contact centers it’s usually the Midwest and the reason for that is because there’s a neutral dialect,” Haerich said.

Colorado-based StarTek, which provides business process outsourcing services, opened in July a Hamilton call center in a formerly vacant space. StarTek is expected to create nearly 700 jobs once it ramps up to full operations, which at the time of the February announcement made it the city’s largest single announcement for new job creation in at least a decade, according to Hamilton’s economic development department.

“A lot of it just depends on budgetary restrictions, unfortunately. It is a little cheaper to do business in the Philippines versus North America,” Scott Farmer, StarTek’s local site manager, said during an April interview at a job fair.

“At the same time, I believe that company leaders are really investing in understanding voice of customer and to really meet the customer satisfaction needs, there’s just some opportunity I believe that by going offshore is not an option. Your base of customers just will not allow that to happen,” Farmer said.

“When you’ve got to go through an experience where the consumer’s really got to make a decision whether to leave or stay with you, sometimes, those conversations need to happen here,” he said.

Barclays could be the second call center to announce a Hamilton opening this year if plans move forward, topping StarTek’s job projections.

Synchrony Financial, formerly known as GE Capital’s Retail Finance unit, operates its largest call center and office site in an office park in Kettering, in the Dayton area. Synchrony claims to be the largest provider of private label credit cards in the U.S. And Kettering serves as the headquarters of Synchrony’s Payment Solutions business.

Approximately 1,700 Kettering employees work in a variety of roles such has marketing, sales, information technology, fraud and operations, according to the company.

“We’ve always had a good experience in the state of Ohio in terms of attracting talent,” Margaret Keane, president and chief executive officer of Synchrony, said in an April interview to celebrate the opening of a new career center. “It’s an area from a country perspective, jobs are needed and it has been a good area for us.”

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