A Call For Jobs

July 7, 2008
| By Pete Daly |
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WYOMING — When companies like Priceline.com consider West Michigan for setting up major call centers, it isn't only for the government incentives or the price of the real estate. A prime consideration is the demographics of the labor force.

"Site selection for call centers is a vastly different product and process than site selection for manufacturing or distribution or retail," said Laura Grimes, president and CEO of Harrington Consulting Group in Rochester.

Harrington Consulting introduced its client, Priceline.com, to West Michigan. Grimes was not able to comment on Priceline.com specifically, pending its decision regarding a possible Wyoming site for a new call center versus a competing location in Georgia. But she said that 70 to 80 percent of a call center budget is in labor, unlike a major manufacturing operation.

"That means finding the right fit with a community that has the right skill level and talent," said Grimes, of the available labor force.

She said Michigan is getting more attention now for potential locations for call centers, due to the combination of the unemployment rate and higher-than-average education levels in some areas of the state.

In June, the Michigan Economic Growth Authority board, in collaboration with the city of Wyoming and The Right Place Inc., announced it had approved a state tax credit valued at $3.9 million over seven years to encourage online travel company Priceline.com Inc. to open a new call center here, according to a statement released by The Right Place.

As an inducement to Priceline.com, the city of Wyoming is also proposing a seven-year tax abatement worth $1.1 million. If Priceline.com accepts the offer, the new call center project is expected to generate $7.7 million in new capital investment and create 610 new jobs, including 424 directly by the company, according to The Right Place.

In addition, the MEDC has offered up to $200,000 in job training assistance through the Economic Development Job Training program.

Priceline.com is considering the former Siemens Dematic facility at 4147 and 4247 Eastern Ave. SE, which is owned now by Franklin Partners of Chicago and has been vacant since July 2006.

The Right Place has been working with Priceline.com on the company’s site searches, MEGA approval process and tax abatement applications.

Sue Jackson, senior business development manager at The Right Place, said the greater Grand Rapids area has suddenly come on the radar for companies searching for new call center locations.

The first reason she cited for that interest is the local demographics. “We have a large number of people in the 23- to 33-year-old range," Jackson said.

There is also a diversity of languages spoken here, starting with Spanish but also including Mandarin Chinese, Japanese and some Arabic

"The other thing we have is more than 70,000 college students in our greater Grand Rapids area," said Jackson. College students are ideal candidates for call center employment because they have some higher education and communication skills and are often available for night and weekend shifts.

Jackson said there have been about a half-dozen inquiries this year from companies looking for call center sites. She said she is not aware of any last year, due to the uncertainty then about what was going to replace the Single Business Tax.

Call center employees answer calls and e-mails to assist customers or company agents. A wide variety of businesses maintain large call centers, such as banks, insurance companies, retailers and travel agencies, to name a few. Amway has a call center, as do office furniture manufacturers. Call centers are measured by "seats," with the major call centers ranging from 200 to 500 seats, said Jackson.

"I think there are some major corporations that have decided to bring their call centers back from offshore, because customers are asking for that," said Jackson.

Locating sites for new call centers is one of the major functions of the Harrington Consulting Group, said Grimes, but the firm also consults on call center operations. She founded the company in the early 1990s after having worked in management at one of the largest call centers in the United States.

Most of the call center sites she has scouted have been in the sunbelt states. If Priceline.com settles on Wyoming, it will be the first major call center site she has landed in Michigan.

She said companies were reluctant to set up call centers in Michigan in the past, when many people could easily find high-paying manufacturing jobs with just a high school diploma. For that reason, West Michigan seems to have a slightly higher education level than the general population in the Big Three areas in southeast Michigan — which is good for West Michigan.

Another call center challenge in northern states are storms that close schools in the winter, which means many young working mothers have to miss work to stay home with the kids.

But there are some silver linings in the black cloud of the U.S. economy now.

"The bad news about the weak dollar has been good news for the industry,” said Grimes, making call center operations more cost effective in North America.

"Ten years ago, you were seeing organizations put call centers in Dublin, in Amsterdam, in Dubai, in Bangalore. Now we are seeing some of it starting to come back," she said.

Huntington Bank, which operates in several states surrounding Michigan, fields about 20 million e-mails and 5 million phone calls from customers each year, according to Jim Dunlap, president of the West Michigan region. Huntington has two call centers: one in Columbus, Ohio, and the other in Holland. Last year, it chose the Holland operation for expansion because of the quality of the available work force there, he said.

Steve Angell, the Huntington vice president in charge of operations at both call centers, said when the Holland call center opened in 2003, it had about 100 employees. Now it employs about 240, with a starting wage of slightly more than $10 an hour, plus incentives, bonuses and benefits.

Angell said the "great work ethic" of West Michigan residents is one plus for call centers here. He said another plus is "a very natural friendliness that comes through on the phone."

Call centers tend to be in open buildings that can accommodate a lot of wiring for phones and computers. Vacant "big box" stores are often a favored location, according to Jackson, while class A office space usually isn't because of its relatively higher cost per square foot.

Parking for large numbers of employees is also a prime consideration, which would seem to preclude call centers in many major downtown locations — but one of the largest in Grand Rapids is the Blue Cross/Blue Shield of Michigan call center in the former Steketee's Department Store building on Monroe Center.

According to a spokesperson for BCBSM, its original call center here was on 44th Street and employed about 20. Then it moved to a location on Kraft, which employed about 100. In 2004, BCBSM renovated the Steketee's building for a call center where 147 people work. Calls come from its customers but also from agents, physicians' offices and hospitals.

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