Even with layoffs, call centers remain top employer

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Following a recent trend, 410 call center employees are being laid off in Colorado Springs this fall; however, other customer service centers seem eager to employ them.

“If someone wants to stay working in call centers, they easily can,” said Jennifer Pierceall Herman, the industry relations manager for the Pikes Peak Workforce Center. “As soon as the most recent layoff announcement came out, we had about six companies call us wanting to offer those laid-off employees a job.”

More than 1,300 call center employees have been laid off in Colorado Springs since 2016, according to the Colorado Department of Labor and Employment.

Most recently, Conduent Commercial Solutions LLC announced in August that it would close its Springs center Oct. 12.

“We have made the difficult decision to exit our Colorado Springs, Colo., location on Garden of the Gods Road as part of our previously announced strategic transformation initiative to enable greater operational efficiencies and support long-term growth,” said Sean Collins, the senior director of communications, via email.  “We realize this affects individuals and every effort is being made to ensure that all employees are treated fairly. We will provide a separation package to eligible employees.”

In March, StarTek let go 261 employees with the closure of its Colorado Springs center. Alorica also closed a center in the Springs last December, which resulted in 288 employees being laid off.

Tammy Fields, the chief economic development officer for the Colorado Springs Chamber & EDC, said call centers have changed over the years — especially in Colorado Springs.

“In the mid- to late-1990s, telemarketing was a significant industry in the U.S., and Colorado Springs became a hot spot for some of those outbound call center operations,” she said via email. “When the ‘do not call’ legislation came into play in the early 2000s, it caused a major shift in that industry causing many companies to close their telemarketing centers, including some in Colorado Springs.”

Fields believes the customer service center business model evolved and grew in popularity during the same period.

“Colorado Springs saw significant growth within the [customer service] industry, particularly among the insurance and financial services sector,” she said. “It was during this time that companies such as
T. Rowe Price and California Casualty Insurance made decisions to open new contact centers in Colorado Springs.”

The Springs is home to 41 customer service/contact centers that employ an estimated 15,000 workers.

The centers operating in the city are mostly for inbound-call operations, which provide customer service, technical support and financial services support for national companies.

“These centers require skill sets from basic customer support functions to helping customers manage their financial portfolios and everything in between,” Fields said. “Customer service centers have been, and continue to be, significant employers in our community that provide thousands of jobs and opportunities for our citizens.”

Wage levels at customer/contact service centers vary according to skills required.

“Due to the large concentration of contact centers in the region and our low unemployment rate, employers must pay wages that are competitive in order to attract and maintain their workforce,” Fields said.

The starting average hourly wage for a customer service representative is about $13.20 in Colorado Springs.

“[Call center jobs] tend to be lower-paying jobs,” Herman said. “The average tends to be a little higher than minimum wage with supervisor positions paying a little higher.”

Colorado raising its minimum wage and the state’s low unemployment rate are among the reasons Herman believes companies might be leaving the state — with some even leaving the country.

“It’s a lot more competitive for employers to find employees right now here,” she said. “It can cause higher costs on a company if they are having to offer a higher starting hourly rate. I know that at least with StarTek’s last layoffs, it was because they were moving the jobs to out of country.”

Between 2006 and 2014, the U.S. lost more than 200,000 call center jobs, according to U.S. Bureau of Labor Statistics data.

The Communication Workers of America is pushing for passage of the U.S. Call Center Worker and Consumer Protection Act, which “would add much needed accountability and transparency to the off-shoring process.”

CWA said in an Aug. 22 press release: “The bill would require that U.S. callers be told the location of the call center to which they are speaking; offer callers the opportunity to be connected to a U.S. based center if preferred; and make U.S. companies that offshore their call center jobs from the U.S. ineligible for certain federal grants and taxpayer-funded loans.”

Brenda Roberts, the organization’s district 7 vice president, is calling for elected officials in Colorado and across the country to “get behind the bipartisan push to rein in unchecked corporate offshoring,” adding, “Taxpayer money shouldn’t be rewarding companies who are profiting on the damaging offshoring trend.”

The Colorado Springs call centers have been working with the Pikes Peak Workforce Center when announcing layoffs.

The center provided workers at Alorica and StarTek with layoff assistance, including job search workshops and filing for unemployment as well as on-site hiring fairs that were requested by the employers.

“[Call centers] have been really good about reaching out to us so we can help those laid-off employees find new jobs,” Herman said. “We already have a hiring event scheduled for Conduent on Sept. 19. We always actively reach out if we hear there’s going to be layoffs. Our main goal is to help unemployed employees find employment as soon as possible.”

Meanwhile, Fields says all of the factors that make Colorado Springs a great location for businesses — cost of living and operations costs below the national average, a highly educated workforce, and outstanding quality of life — apply to call centers too.

“We continue to see expansion and growth within the industry locally from companies like Progressive Insurance, Tek Experts and T. Rowe Price, all signs that the [customer service] industry remains strong,” she said. 

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