Call centers won't disappear overnight, but the industry's days of expansion appear over, Datamonitor said. About 50,600 U.S. call centers now employ 2.9 million people. Datamonitor expects those totals to dwindle to 47,500 call centers with 2.7 million employees by 2008.
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Once thriving, call centers now are shrinking, a trend that could threaten thousands of jobs.
Because of lower wages overseas, technological advances and new do-not-call regulations, call center jobs are leaving the United States, according to a study released yesterday by Datamonitor, a London-based research firm.
Call centers long have been touted as an opportunity for unskilled workers, and taxpayers in such place as Palm Beach and St. Lucie counties in Florida have rewarded call centers with job incentive grants to add employees.
Call centers won't disappear overnight, but the industry's days of expansion appear over, Datamonitor said. About 50,600 U.S. call centers now employ 2.9 million people. Datamonitor expects those totals to dwindle to 47,500 call centers with 2.7 million employees by 2008.
Lower-Wage Countries
Many of the jobs will move to lower-wage countries such as Canada, India, the Philippines and Mexico. While the typical American call center worker makes $10 an hour, the average wage for the same job in India is $1.20 an hour, Datamonitor analyst Mark Best said.
Large companies such as Microsoft (Nasdaq: MSFT) and Dell (Nasdaq: DELL) already route customer service calls to India.
So does West Palm Beach-based mortgage company Ocwen Financial, which pays Indian workers to answer calls from borrowers. Ocwen once had more than 1,000 workers here, but it now employs more people in Bangalore, India, than it does in West Palm Beach.
Still, the news isn't all gloomy. Home-shopping channel QVC, which employs 1,000 people at its call center in Port St. Lucie, Florida, has no plans to downsize.
The company will add hundreds of temporary workers for the holiday shopping season and has rejected the idea of shipping jobs overseas, General Manager Diana Rupert said.
Control Issue
"We've certainly looked at it as a business strategy and feel it wouldn't be the right decision for us right now," Rupert said.
QVC thinks it can keep tighter control of its customer service with its employees in the United States, she said. Catalog company Levenger of Delray Beach, Florida, cites a similar rationale for keeping its 40-worker call center there.
St. Lucie County, in particular, has been a beneficiary of the call center boom. Cincinnati, Ohio-based Convergys (NYSE: CVG) , for instance, employs 900 people in Fort Pierce, Florida, where its call center filled an empty department store at the struggling Orange Blossom Mall. And Aegis Communications of Texas employs 800 in Port St. Lucie.
St. Lucie County's call centers are expanding, not shrinking, said Don Root, executive director of the Economic Development Council of St. Lucie County.
Various Cutbacks
In Palm Beach County, however, many call center jobs have disappeared.
Credit card company Applied Card Systems has shrunk its Boca Raton call center from 2,000 employees to 500, although spokesman Barry Epstein said the company is hiring now. ANC Rental's call center in Boca Raton has contracted from 700 workers to 200.
And credit card company MBNA last year closed its Boca Raton call center, which employed 950 people. Office Depot (NYSE: ODP) is an exception; the retailer plans to expand its 500-worker call center in Boca to 650.
"Any jobs we're losing are a concern," said Gary Hines, vice president of the Palm Beach County Business Development Board. "You've got people trained in one specific set of skills, and we've got to do our best to retrain these people."
