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Wednesday, January 18, 2006

On All The Call Center Hoopla

You'll never read in this weblog any disparagement of employers who are bringing jobs to Southside and Southwest Virginia. At this point in time, with thousands of manufacturing jobs having left the area, never to return, we'll take whatever we can get.

But I read an article in Business Week magazine the other day that reminded me of something Mark Warner said in his farewell State of the Commonwealth (and hello New Hampshire primary) speech last week. In it he had high praise for himself for having accomplished this:
In Southside and Southwest Virginia, we've worked to create or retain more than 32,000 jobs. Even in Danville -- where the sale of the Dan River textile mill has been in the news -- we were able to announce yesterday that TelVista would expand, creating 250 new jobs. (link)

I resisted the urge to make a snide comment like "Gosh, where are we going to find enough workers to handle those 32,000 new jobs?" when I noticed the tricky little word, "retain." Warner "retained" the Wal-Mart in Pounding Mill and the Citgo station in Bland I guess is what he's bragging about.


Congressman Rick Boucher is renowned for being able to beat a path to the newsroom (and you don't want to be in his path) whenever he has a jobs announcement to make as well. The latest:
Company to open $1M customer call center
By Kathy Still, Bristol Herald Courier

Duffield – An Ohio-based company is opening a $1 million customer call center here this fall that will eventually employ 200.

Call Evolution Co. will immediately hire 75 for the center at the Duffield Industrial Park’s Pioneer Center. Over the next 30 months, a total of 200 employees will be hired, according to local officials.

Last month, Results Network opened a similar call center in Lee County. The center now has 35 employees with plans for a total of 250 jobs. (link)
Warner's announcement regarding TelVista and Boucher's news release regarding Call Evolution have one thing in common. Both companies are in the call center business.

Boucher in particular has been adept at luring companies with call centers to the area (politics and the potential for him to regain his chairmanship of the House subcommittee that oversees such concerns has a good bit to do with it), including EchoStar in Christiansburg and AT&T Wireless over in Lebanon. When he and Warner boast of the creation of thousands of jobs in the area, they are for the most part talking about call center jobs.

The fact that most of these jobs are part-time and pay only $8.00 to $9.00 per hour (the disappearing manufacturing jobs were paying twice that) is not the point I want to make, although it is worth keeping in mind when politicians blather on about how great conditions are here in Southwest Virginia or especially over in Southside.

The Business Week article reminds us that just as quickly as the manufacturing jobs are disappearing around here, the call center jobs will as well. But not because of competitive pressures from India (see Travelocity Closing Clintwood Call Center), although that's a huge issue as well. Advancements in technology will be bringing about the end of the traditional call center as we know it:

Call Centers In The Rec Room

"Homeshoring" takes off as moms and others provide an alternative to offshoring

More and more, companies are moving customer service jobs out of high-overhead call centers and into what is possibly the lowest-overhead place in the U.S.: workers' homes. The savings are about more than just real estate, toilet paper, and coffee supplies. JetBlue Airways (JBLU ) is perhaps the most famous practitioner; all of its 1,400 reservation agents work from home. But they are employees. Most of the new homeshoring jobs are independent contractor positions offered by outsourcing companies. The agents are on the hook for their own health care, computer equipment, training -- even background checks.

Outsourced homeshoring jobs grew 20% last year, to 112,000 jobs, estimates tech-market researcher IDC, and will hit 330,000 by 2010. "Offshoring's underestimated sibling, homeshoring, is about to hit a growth spurt," says IDC analyst Stephen Loynd. Office Depot (ODP ), McKesson (MCK ), and J. Crew all use home agents. Homeshoring is less likely to risk the accent fatigue, cultural disconnection, and customer rage that offshoring can inspire. That's not to mention the mounting security fears (once your private data -- credit-card and Social Security numbers, medical and brokerage records -- go overseas, they're beyond the reach of U.S. law). (link may require subscription)

So. Are we appreciative of the call center jobs that Rick Boucher has brought to Southwest Virginia? You bet.

But let this be a word of warning. When we let our elected officials tout their successes in bringing this type of employment to the area, we are letting them off the hook. These jobs are here temporarily. They're soon going to either relocate to Bangalore or they're going to pop up in someone's bedroom in Parsippany. And our economic slide into ruin will accelerate.

Congressman Boucher and Governor Kaine need to be thinking in different terms and start creating conditions such that existing employers here can compete in the global marketplace and, in doing so, maintain good-paying existing jobs. They need to reduce and eliminate the myriad taxes that are foisted on our corporations and lessen all the burdensome and costly state and federal regulations that prevent our manufacturers from competing head-to-head with those working out of Singapore.

The costs of doing business must be drastically reduced. Both men have the power to affect positive change. It's time they earned their keep.