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The buzz on call centers
The Albuquerque Tribune

http://abqtrib.com/news/2006/oct/02/buzz-on-call-centers/

TRAVEL INSIDER: Air call centers fly into trouble overseas

By Laurie Berger
Special to the Tribune
Published September 24, 2006

Pity the poor passengers who must phone airlines to do anything these days -- change a reservation, redeem vouchers, get an upgrade or track lost bags.

It can take seemingly forever to get a live agent. If you do, the agents are a world away, in Jamaica, India, the Philippines or Lithuania. And these operators in overseas call centers, airlines acknowledge, are sometimes ill-equipped to meet the demands of harried U.S. travelers.

Catherine Rogers of Madison, Wis., was in tears recently trying to rebook a delayed flight through a United Airlines reservations agent in India. She asked about different routings and options, even a refund, but the operator offered none.

"He didn't have any authority to make decisions," Rogers said. "He just kept saying `Sorry' and putting me on hold."

Richard Gamberg of Hawaii, another unhappy flier whose call was routed to India, spent 20 minutes trying unsuccessfully to book an award seat. Once in touch with a U.S. agent, he said, the deed was done in four minutes.

"They're nice and polite but take too long and have the wrong information," said Gamberg, a 100,000-mile-a-year flier. "They never lose their cool, but they made me lose mine."

Cash-strapped airlines have followed computer firms, banks and credit-card companies to Asia, Latin America and other areas where it's less expensive to run customer-service centers.

US Airways and bankrupt United and Delta now send at least half of their U.S.-based callers overseas. (American, Continental, Northwest and Southwest still answer phones in the U.S. using on-site and home-based agents.)

The troubled carriers' best customers--upper-elite frequent fliers and international passengers--get directed to "cream-of-the-crop" U.S. agents. Pretty much everyone else is sent to the airline equivalent of Siberia, in terms of customer service. Carriers say routing calls to distant lands saves an average of 20 to 50 percent a year and keeps fares low.

One popular online forum, www.flyertalk.com, has logged thousands of posts on the topic. Many say that overseas agents don't know local geography, airline policies or carriers' routes; can't handle complex questions; and often refuse to transfer callers to a U.S.-based operator.

Jeri Bowden of McLean, Va., for one, said she spent eight lunch hours trying to redeem a paper upgrade through several India-based agents she couldn't understand.

"I kept asking for someone who spoke English without an accent," said Bowden, who registered her gripe on www.untied.com, a complaint site with no connection to the airlines. "I would have screamed, but I was at work."

Experts say the frustration is understandable. It's hard for Americans to "get past the clipped British accent" of Indian agents, said Virginia Mann, a University of California-Irvine speech scientist.

"Travelers are already under stress when they call," she said. "When they can't communicate with the person who's supposed to be helping them, they explode."

Some call center experts blame it on poor training.

A 2005 Cornell University study of Indian call centers found that employees had little or no power to make decisions. About 41 percent relied on scripts, and more than 50 percent had less than one year of experience.

"On average, U.S. call centers take less time to answer calls and answer them correctly without escalating them to a supervisor," said David Butler, executive director of the National Association of Call Centers.

Customer backlash has at least one U.S. carrier reconsidering its decision to go overseas.

US Airways, which last year saved $14 million from February to May by sending 80 percent of all of its U.S. callers overseas, has just spent $2 million to restore about 350 U.S. agents.

"We were hearing horror stories from customers and knew the service was substandard," said Scott Kirby, executive vice president of sales and marketing. "It was the perfect storm of language barriers, cultural issues and brand-new agents."

The merged US Airways-America West now outsources 60 percent of all of its customers' calls to centers in the Philippines, Mexico and El Salvador.

Delta, which has saved millions exporting almost half of its calls, dropped one of its three India centers for "poor performance." It has since replaced it with another firm there.

The airline now has five centers, two of which are in Lithuania and Jamaica.

United wouldn't divulge its number of overseas call centers. But the airline said agents are trained, monitored and empowered equally, no matter where they are.

"If a customer is not happy, they can ask for a supervisor," spokeswoman Robin Urbanski said.

But passengers beg to differ. Los Angeles frequent flier Robert Rogers said he was upgraded by an India-based United agent, then denied his front-cabin seat at the gate.

"I don't care what the person in India promised, I can't do it," he said the airport agent told him. He was sent back to a middle seat in Coach.

When we contacted the airline on Rogers' behalf, United acknowledged there was a reservation error, upgraded Rogers to upper elite status for future flights and promised his reservations would be routed to senior-level U.S. agents for the rest of the year.

Meanwhile, other fliers have taken matters into their own hands.

Some play agent roulette, redialing the 800 number until they land a U.S. operator. Others report success choosing the international, Spanish-speaking and Web support options on airlines' voice-mail menus. And still others phone on weekdays, when, they say, calls are less likely to be routed overseas.

Steve Danishek, a Seattle-based travel agent, said that passengers should check for mistakes. He now double- and triple-checks every transaction after one outsourced agent booked a family to the wrong Hawaiian island and another ticketed a passenger for the wrong day.

Danishek said the errors weren't discovered until days later, when confirmation arrived by snail mail instead of e-mail. "I had to pay $700 out of my pocket to make it right with my clients."

Although fliers don't have much protection against errors by overseas agents, San Francisco-based travel attorney Al Anolik said passengers should stand up for their rights anyway.

"Airlines can't delegate that duty and say they're not responsible," he said, encouraging dissatisfied travelers to demand compensation in the form of ticket refunds or future upgrade vouchers.

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ctc-travel@tribune.com

Call-center workers' fortunes on the rise

Pay, pensions, 401(k)s erase job's negative stereotype

Chad Graham
The Arizona Republic
Sept. 19, 2006 12:00 AM

For years, Arizona's call centers were derided for offering bare-boned wages, few benefits, head-spinning turnover and the occasional scam.

But with the Valley's 3 percent unemployment rate, a growing number of centers are offering record starting wages, robust benefits and perks in a desperate bid to find and keep qualified workers.

As a result, small and midsized operations, especially those refusing to pay more than the $10.71 per hour industry average, could be forced to drastically downsize or shut their doors.

Firms hoping to set up shop in metropolitan Phoenix and pay $8 to $9 per hour likely cannot compete for labor and may consider locating elsewhere, said James Trobaugh, senior vice president of CB Richard Ellis' Call Center Solutions Group.

Based in Phoenix, the specialized unit helps companies locate vacant customer-service centers and other back-office operations worldwide.

Pressure to raise wages

The increasing wages are significant. Labor can constitute 70 percent of an operation's total cost, making Valley call centers extremely sensitive to even the smallest changes in hourly wages.

The intense competition for workers is also driven by the fact that the Valley counts 302 call centers that employ 102,760 residents, or more than 5 percent of the total non-farm workforce, according to CB Richard Ellis data.

"Once you get 2 percent over your total workforce in call-center jobs is when you start to see upward pressure on wages and turnover," Trobaugh said.

Already, some "have gone away because of consolidations or not being able to find a workforce needed to service their clients."

Increased wages in Arizona were a factor in Qwest's announcement last week that it would lay off 360 workers in its customer-service, sales and collections areas of their central Phoenix office.

A Qwest customer-service center in Idaho Falls, Idaho, has been "heavily involved" in handling Arizona calls, a company spokesman said.

Call-center positions in the Valley differ vastly in pay and can include positions at help desks, customer support, human resources and information technology.

Telemarketers typically make outbound calls to sell products. Their median wage in 2005 was $9.62 per hour, according to federal data.

Customer-service representatives typically field inbound calls and made a median wage of $12.85 per hour last year.

Arizona, Delaware, South Dakota and Utah have the highest concentration of customer-service representatives in the nation, according to the U.S. Department of Labor. Currently, 16 call centers, ranging in size from 12,525 square feet to 150,000 square feet, about the size of a larger Target store, sit vacant in the Valley, according to CB Richard Ellis. Five years ago "there were maybe one or two vacant centers," Trobaugh said.

Companies upping the ante in terms of pay and perks include:

• AAA, which plans to expand its 185,500-square-foot facility in Glendale by about 700 call-center workers through 2009.

Wages start at $12.20 per hour and increase for weekend and night shifts and skill level.

"We literally get 300 to 400 resumes per week," said Michael Locatelli, human resources manager.

• Cox Communications, with 800 customer-service agents, offers some call-center workers the chance to work from home. It hopes to double the number of teleworkers in Phoenix and Tucson from 50 to 100 by the end of 2007.

• During the next 15 months, auto-insurance giant GEICO plans to add 600 workers to its Tucson operations center, which employs more than 500. Starting wages for customer-service representatives will be $12.64 per hour.

Representatives handling more complex claims and questions will start at $15.80 per hour, company officials said.

More than base pay

For some Arizona workers, call centers' added perks and employee-friendly environment are more powerful draws than base pay.

At the United Services Automobile Association's massive operations center in north Phoenix, a fountain of Moroccan fossilized stone and a soaring glass atrium welcomes guests into the lobby.

From sleek white cubicles, employees field calls for the company, which sells insurance, banking and financial planning to military members and their families.

During breaks, they can work out at the fitness center or relax in a shaded walkway.

Employee Erin Garrett pulls down about $39,000 per year, an annual bonus, health and 401(k) benefits, a pension, reduced day-care fees and set hours.

The single mom was once co-host of a morning radio show in San Francisco and occasional morning weather and traffic reporter and co-host of Sonoran Living for Channel 15 (KNXV) in Phoenix.

But after her daughter Hannah was born, Garrett left the hectic media world.

She now fields customer calls for USAA's policy-service unit.

Maybe more important to Garrett: USAA's child-care center is near her office building.

Headquartered in San Antonio, the company starts entry-level workers between $27,000 to $29,000 per year, or $12.98 to $13.94 per hour.

It plans to add 400 employees to its 2,600-member workforce by year's end.

Newer breed of centers

Call centers of all stripes helped stabilize the Phoenix economy during the downturn of the early 1990s.

The sector fed on the area's supply of cheap land and an inexpensive workforce paid well below the national average.

"If you look at demography of Phoenix and of Arizona at that time, these jobs were consistent with a big part of our workforce," said Ioanna Morfessis, founding president and chief executive of the Greater Phoenix Economic Council who now owns her own consulting firm, IO.INC.

"Our educational attainment was lower then. The cost of living was lower. That's not the case now."

Valley economic development officials today are more prone to welcome call centers that are units of companies also employing workers pulling down high-end salaries in such departments as human resources or information technology.

"If you're running a call center, you want a guaranteed labor force with no competition, without upward pressure and people out there potentially taking your trained employees and putting them in their own skill set," said David Butler, executive director of the National Association of Call Centers in Hattiesburg, Miss.

However, he added, "If you are a mayor or a chamber of commerce person and you have multiple companies all vying for the same labor force, which may drive up wages, then that's a great thing for your community."

Fountain Hills resident Armand Lawson, was recently laid off from Monster.com and interviewed at a AAA job fair in Glendale.

He was interested to see what kind of advancement the company offered. Of course, more pay wouldn't hurt, either.

"In the last two (call-center) positions I've noticed that base salary has increased," he said. "The price of living is going up, so we definitely are looking to make nice, decent salaries for our families."

Agents along for the ride
At a time when outsourcing is the norm, Frontier sees its call-center workers as crucial to competition
By Kelly Yamanouchi
Denver Post Staff Writer

As airlines seeking to cut costs have outsourced some of their call-center work, Denver-based Frontier Airlines thinks its in-house reservations agents are a competitive advantage.

There's a higher cost for the low-cost carrier, but Frontier has kept in-house all of its reservations agent work - with call centers in Denver and Las Cruces, N.M.

United Airlines has outsourced call centers to places as distant as India as it closed some domestic reservations centers, including the one in Denver.

Frontier believes it can offer better customer service if it's done in-house. The airline's reservations agents also have a sense of ownership, said Frontier's senior director of reservations, Anne McCollum.

"My heart just pounds when I see a Frontier flight," said Crystal Allison, a reservations agent in Denver for Frontier frequent fliers. "Happy employees are going to make happy customers."

Some customers remark on the airline's comical talking animals or ask what animal will be on the plane they'll fly.

"I think when you're in the call center working for that particular company, it's more meaningful; it's more personal," said Faanimo Satele-Sunia at Frontier's call center in Denver.

It's also easier to quickly communicate changes in policies to in-house employees to give accurate information to customers, said Frontier spokesman Joe Hodas.

"The companies that choose to outsource their call centers, in the United States or offshore to another country, do so to save money," said David Butler, executive director of the National Association of Call Centers.

Companies that keep call centers in-house "believe they can do a better job in treating the customer well and selling their brand," Butler said. "It may take 20 minutes to make a customer happy, but it's worth it."

That could help the company retain customers and gain market share.

Average pay for U.S. call-center workers is $10 to $12 an hour; at outsourced call centers, employer costs can be 10 percent to 20 percent lower, Butler said. Frontier reservations agents start at close to $9 an hour; more- senior employees make more.

Frontier recently started charging customers $5 to book a ticket over the phone or in person at the airport, like other cost-cutting carriers. It's an effort to entice customers to book their tickets online and cut costs for the company, while keeping reservations agents free for more-complicated transactions.

Airline reservations centers are part of a sector that has had a net job loss in the U.S. and globally, due largely to a shift to Internet-based self-service operations, Butler said. Hodas said Frontier would not cut back on reservations agents.

The company wants to increase the percentage of tickets booked on its website from 30 percent to 40 percent now to 50 percent by March.

Frontier temporarily outsourced call-center work to a company in Miami seven years ago to accommodate a growth spurt.

"They serve a purpose," McCollum said. However, "the commitment is not to Frontier Airlines but to the outsource company."

The airline has about 150 call- center employees in Denver. It opened its Las Cruces call center in 2000. With about 150 employees there, Frontier is one of the largest employers in the southern New Mexico town.

Another challenge in maintaining a local call center is finding good employees. McCollum has considered such options as allowing employees to work from home. She worries about not being able to watch or coach reservations agents as they work.

She talked to JetBlue, an airline that employs at-home agents, and learned that doing so requires more supervisors. Even so, McCollum said, "I think it's the way of the future."

Call Center Jobs: The U.S. Is Still Number One
Lost jobs get much more press and attention than new positions, according to the National Association of Call Centers, but the country still has the highest rate of closings.

by Phillip Britt
Tuesday, August 15, 2006
CRM Magazine

Despite all of the concern about call center jobs going offshore to India or nearshore to Canada, the United States is still the center for call center positions, according to David Butler, executive director of the National Association of Call Centers. Butler discussed the state of the call center industry at the ICCM Chicago conference Monday.

Looking at data gathered from a variety of sources, including company press releases, newsletters and reports, which still don't cover all possible call center jobs, 62 percent of call center jobs are located in the U.S. and 6 percent in the United Kingdom. Canada and India each have 5 percent of the total market. "The myth is that all of the contact center jobs are going to India, but the truth is that that is not the case," Butler said.

The reason for the misperception is that the press, local chambers of commerce, and companies themselves announce when call centers are closed, according to Butler. But the press doesn't notice so much when one opens, in part because sometimes companies don't say anything for fear of giving their competitors strategic information. "When a small center call center closes, it's big news," Butler said.

Fifty-two percent of all call centers opened between 2002 and 2006 are located in the U.S., Butler said. Another 16 percent were opened in the U.K. and 12 percent in the Philippines. Only 6 percent were opened in India.

On the other hand, the U.S. also leads the world in the percentage of call centers closed in the past five years, with three quarters of the shuttered total. The U.K. is next at 16 percent. Yet many of these are reopened in other U.S. locations to take advantage of lower prevailing wages, tax incentives, a better technology infrastructure or some combination of factors, according to Butler.

The net effect of the closures and openings in the last four years has been more than 183,000 new call center jobs, with about 25 percent of those in the U.S., according to Butler. While many see call centers as offering only minimum-wage jobs, Butler says that many of them pay agents around $10 per hour plus benefits. Companies that are growing need more call centers to provide better customer service, while companies with shrinking revenues tend to turn to call centers as low cost service channels, Butler said. "Either way a business goes is helping the call center industry."

National Association of Call Centers Launches Five New Memberships for 2006

Hattiesburg, MS – June 15, 2006 – The National Association of Call Centers (NACC) launched five new memberships for the call center industry this month. The memberships --Executive, Manager, Vendor, Economic Developer, and Consultant -- replace the single membership offered during the NACC’s inaugural year in 2005.

Based on feedback throughout 2005, the NACC developed five distinct memberships with unique deliverables for each audience. “We listened to the call center constituents throughout 2005 and put into place value-added memberships and associated benefits that the industry said they wanted,” said NACC executive director Dr. David Butler. Each membership has a different price point and a different set of deliverables targeted at a specific population. The Executive members receive strategic data and reports, and Managers receive tactical data that can be applied quickly within a call center setting. For Economic Developers, the NACC launched the Information Technology Services Certification Program to assist communities to recruit and retain call centers and shared services centers in their area.

For more information about NACC memberships, please visit the NACC Web site at www.nationalcallcenters.org.

About the National Association of Call Centers
NACC is a membership-based, non-profit organization established to provide research-based data, information and analysis to the call center industry. Additional information is available at the NACC Web site: www.nationalcallcenters.org.

Important Links
The Call Center Research Laboratory at The University of Southern Mississippi

Call Center Industry Advisory Council

Contact Professional Magazine

Download PowerPoints

June 2006 - Download State of the Industry Report presented to IQPC in Las Vegas (16 mb PowerPoint)

August 2006 - Download a PowerPoint from ICCM Chicago (10 mb PowerPoint)