Economic Issues

The Problem with a Call Center Economy

By Emily Esterson, 10-18-06

This morning, 900 workers at the AOL call center in Albuquerque, along with several hundred more in Ogden, Utah and Tuscon, learned they will lose their jobs in December.

It comes as no surprise: AOL has been struggling and has said it will restructure and reduce its workforce by 25 percent, according to this morning's Albuquerque Journal.

From an economic development viewpoint, call centers make for nice headlines. They tend to employ a great number of people ("AOL to add 900 jobs to Albuquerque Economy") and they capitalize on the fact that many of our residents are bilingual (which I think is a major advantage these days). They provide some entry level work for students and others. But unlike manufacturing jobs, call centers come and go in the breeze. They aren't great for long-term career building. It's a lot easier to set up a call center (some high-tech phones, some cubicles, a big empty supermarket or office space) than it is to set up a factory (huge space requirements, lots of expensive equipment, employee training).

There are, according to this good little roundup in the Albuquerque Tribune 12,500 people employed in call center jobs in Albuquerque and Rio Rancho. The number ebbs and flows, of course, because call center employees are the first to go when a company downsizes: Sento, for example, laid off a bunch of people recently when it lost a key contract. Yet the call centers keep coming: PR Newswire plans to open a large center here soon, and others, including Verizon, have expanded.

The good part of call centers is that they provide great customer service training. We live, increasingly, in a service economy and being able to talk a person down off the ledge who is standing there with their, say, printer, or their cell phone bill, or their laptop, is a really good skill to have. It's very nice to call the Verizon help line and get someone on the line who knows that a New Mexico phone does not require international cell phone calling plan. It used to happen to me when I was with another phone company and I always suspected that the person I talked to to change my plan was actually in Bangalore and had no working knowledge of U.S. geography. (Although for the record, Sprint also has a call center in Albuquerque).

But call centers can be difficult to sustain. Former Secretary of Economic Development John Garcia, who served during the call center recruitment hay-day of Governor Gary Johnson, predicted that call centers would become adouble-edged sword "—providing jobs but not lifting the state's wages and economic standing.

The state has done a better job lately of recruiting inbound call centers (those people waiting to hear me rant about why I can't get rid of the streaks my printer is causing), rather than outbound (read: telemarketers). Inbound centers require skills and the patience of a saint. Outbound just require an annoying sticktoitiveness and a Teflon personality. At inbound call centers, the employee turnover rate is about 30 percent, according to the Call Center Research Laboratory (who knew?) at Southern Mississippi University, while the outbound rate can be as high as 150 percent.

Call center job creation helps a certain sector of the economy, to be sure; I can't count the number of University of New Mexico students I had who worked in a cubicle farm tethered to a head-set. I remember when one of the big ones shuttered a few years ago, and four or five of my journalism students looked pretty darn glum. Is a call center enough to stake an economic future? Not likely, and it's a relief to see the state Economic Development Department diversifying its recruitment efforts, especially today, when 900 New Mexicans learned they have lost their jobs.

Like this story? Get more! Sign up for our free newsletters.