Fewer Seats in the Contact Center

The National Association of Call Center's (NACC) "State of the Call Center Industry Report: 4th Quarter 2008 Data" finds that for the first time since the organization began collecting employment data in 2004, more contact center jobs were lost (approximately 5,000) than gained (2,500).

"This is evidence that the recession is truly multi-sectoral, not just high-tech, not just housing," says David Butler, executive director of the NACC and author of the report. "The contact center can be influenced by national economic trends. It's not a recession-proof industry, as some people had thought."

When asked to speculate if we would have seen the same downturn back when the economy lagged in the early 21st century, Butler believes that we would not have. "The industry was still in its growth phase at that time," he recalls. "It's in teenagerhood right now. There may have been a slowdown, but I doubt an overall decline like we saw here."

To add to the doom and gloom, in the fourth quarter, 25 call centers opened while 15 closed, another first for the NACC quarterly reports. Amidst the negativity, Butler points out that there were a few bright spots. The medical services industry vertical -- and states including South Dakota, Tennessee, and Massachusetts -- realized a net positive growth in call center jobs.

Butler notes the medical services industry expanding as the major reason for the growth. "As Baby Boomers are getting older, they still control a disproportionate amount of capital and resources in our economy and makes up the largest voting block," Butler says. "Because of that, a great deal of services are being targeted at this generation."

This is a blessing and curse, but that's where the call center jobs come in, Butler says. "Inflation in medical services is outrageously high, 20 percent to 40 percent per year, and is unsustainable," he says. "Contact centers are one solution in helping to keep medical costs down by moving some positions to them to handle the large number of calls and inquiries."

Another sector that surprised him was financial services, with a net loss of only 25 call center jobs. Butler says he expected the numbers to be much worse due to the wild restructuring and massive layoffs the industry has seen in the past year. "Some of the major banking problems going on right now aren't widespread ... it is a few banks that are the biggest [culprits]," Butler says. "Those get the media attention, but the call center jobs are also in bank branches and local ones, which were not affected. Also, this sector is restructuring and has federal government requirements to communicate with customers ... because of that, agents are needed."

It doesn't look promising now, but Butler believes that by the end of this year we'll start to see more jobs gained than lost again, citing two reasons:

  • call center jobs created from federal stimulus money will most likely not go overseas, due to the potential negative publicity; and
  • the Wal-Mart Effect, as Butler notes that as companies expand product lines or growing market share they'll need more call center agents to handle the product launch, or if jobs need to be cut, most front-office operations will be moved to the call center.

"This industry generally grows during most times, and this is an exception," Butler says. "I suspect we'll see it quickly return."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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