People with a casual knowledge of Utah's call center industry may have wondered about its health in recent months, as several companies laid off hundreds of employees.
But those symptoms of a sick industry belie statistics that indicate the call-center sector contains plenty of companies that have hired or will be hiring in huge chunks or have gradually grown during the past few years.
Call-center executives and a study by the Economic Development Corp. of Utah suggest that while the industry has had its share of sneezes and hiccups, it remains a robust economic behemoth that is getting stronger in the state.
"When you see some of the big (employment) swings, I believe it's a unique situation," said Dominic Dato, founder and chief executive officer of Teleperformance USA, which this month announced the acquisition of Communications & Commerce, giving it a combined 2,500 workers in Utah.
"Overall, the industry is continuing to expand, continuing to hire. Unfortunately, you'll get hit or surprised on occasion, but for the most part, it's a continuous hiring process going on."
The industry study by the EDCU shows that back office/call-center employment in Utah totaled 36,500 at 81 call centers at the end of 2001. That compares with 61 centers with 34,466 workers in 2000.
"What's ironic is that if you take the industry as a whole, it's very strong," said Victor E. Midgley, president of call-center consulting firm Intelliworks and president of the American Call Center Association, both based in Salt Lake.
"It continues to climb and be among the fastest-growing industries. However, if you look at individual call centers, either in-house or service call centers, you see a lot of fluctuation in both growth and decline in growth."
The impetus for many of the big changes is client accounts that are either landed or concluded.
"It's an industry that moves in quantum proportions. You don't see growth or declines that are gradual. But we're no different from other locations. Unfortunately, it's a common experience in the industry."
Common of late have been experiences such as Providian Financial Corp. announcing in late July it would lay off 800 workers as it closes its Salt Lake call center by year-end, and Teleperformance making the CommComm buy, followed the next day by Cincinnati-based Convergys Corp. announcing it would hire up to 600 workers over the next month to make Utah's largest call-center company even larger.
The changes indeed can be dramatic. And sometimes sudden.
That was the case with CommComm a year ago, when it had to let go of about 900 Utah workers and close its Murray facility as the result of a dispute with VoiceStream Wireless that remains in litigation. Some other CommComm clients helped take up the slack, but eventually 1,000 jobs were cut due to that one lost contract.
"Prior to those cuts, all we had was growth," said Alan Truitt, former CEO of CommComm and now president of Teleperformance USA's custom solutions division. He contends VoiceStream failed to honor provisions for a ramp-down if it were to pull out from CommComm.
"For whatever reasons, you always hear about the layoffs but don't hear about the ramp-ups."
"This is an industry where you see a company lose a big account and then another call center looks to hire 600 people, then you see people who worked at the first company go to work for another. It's what I call the 'call-center carousel,' " Midgley said.
Call-center companies can gain stability by spreading work in centers throughout the country, or they can go the route of Convergys, which has thousands of employees who work on behalf of several clients.
"We very much like having a diverse portfolio," said Kathy Carter, vice president of operations for Convergys in Utah and a 24-year veteran of the industry. "We have a lot of types of clients and a wide range of services we offer. Some clients may be going down in volume, but others are doing well.
"We've seen very few layoffs or changes. We have 45,000 employees overall. Some companies are so large that when you see layoffs or hiring of so many, in some cases that might still be a pretty small percentage of the overall work force."
Midgley, however, said the American Call Center Association was formed last year to lend a bit of stability to the industry. One way would be to help employees maintain benefits as they move from one company to another.
He's also hoping to see some standardization seep into the industry by encouraging "best practices."
"In my consulting practice, I see so much inconsistency in how call centers manage their operations. There are a few boiler-room operations that tend to capture the media attention, but there is a side that is very professional that strives to do things appropriately," he said.
The EDCU report shows that call-center worker pay has a broad range. Those involved in marketing in Utah make an average of $7.50 per hour, while those in financial service average $16.40. Data-entry operators average $8.93; customer-service reps, $9.48; and those handling reservations, $8.40.
Federal government stats show that Utah's customer-service reps have a mean annual income of $28,320, only slightly less than California's $29,540 but ahead of Arizona's $22,150, and Nevada and Oregon, both at $24,370.
Customer-service reps at Teleperformance USA seem philosophical about the big employment swings in their industry.
"It can be kind of scary when you know that if a company were to lose a big project, hundreds of people would be out of work — just like that," said Rick Haag. "But you do your best and hope the project grows with you."
"I've watched the work force long enough to know that even outside of call centers, the technology we have nowadays makes all industries very volatile," said Diane Curran.
Stephen Sturgell and his wife, Merlyn, have seen the call center volatility up-close. Both worked for TelTrust, which laid off 1,200 workers in January 2001. "We had no warning whatsoever," said Sturgell, who works with his wife at Teleperformance USA.
"It's a nice change, a breeze of relief now, to know that we went from working for one company directly to another without any kind of interruption. The industry itself is very volatile — always has been."
Calming the shakiness in Utah are the fundamentals that have made the state an attractive place for call centers in the first place. They include a strong employee work ethic, a large group of people between the ages of 18 and 25, access to a major airport (for client visits), a favorable regulatory environment, strong telecommunications infrastructure and a pool of people with a "generic" voice sought by clients and many with second-language skills.
Those and other reasons give folks throughout the industry in Utah confidence that, despite the occasional, well-publicized coughs, its overall prognosis is good.
"We're an alternative to sales or marketing efforts or initiatives (clients have in-house)," Dato said. "Even in tough times, our industry will do well because the cost per acquired customer can actually be much less than they would experience with a direct sales force."
"There will always be a need for customer service, technical support, for people to answer phone calls," Sturgell said, noting especially that callers more and more prefer to hear a human voice instead of an automated system.
"The call-center business is a growing, international market," Curran said. "If businesses can run more efficiently, the bottom line is dollars, and if a call center can save them dollars, absolutely, there's a big market there.
"Clients will come and go and projects will come and go. But there are all types of clients out there."
E-mail: bwallace@desnews.com