http://columbusdispatch.com/live/content/business/stories/2009/07/26/Call_Centers_Go_Wild.ART_ART_07-26-09_D1_O9EI8AV.html?sid=101
Back-office operations at data, call centers employ more than 26,000 in central Ohio
Sunday, July 26, 2009 3:28 AM
By Steve Wartenberg
THE COLUMBUS DISPATCH
Charlie Zimkus | Dispatch
Cubicle land
Central Ohio has become a prime location for the following operations:
Data centers
They are the brains of a company, featuring banks of computers located in secure buildings able to withstand all sorts of natural disasters. Such centers usually cost a lot to build and house plenty of technology but have a low number of employees.
Back-office
These operations are often housed in large buildings that are less expensive to build than data centers and contain row after row of cubicle-ensconced employees. Jobs include data processing and credit-card and check-transaction operations.
Call centers
They also are large operations filled with employees. Jobs include customer-service and sales representatives, order fulfillment and bill collection.
As the company's name suggests, Nationwide could have located its new data center anywhere in the country.
Kansas City, Denver and Dallas were in the running for the $96 million project. In the end, it came down to a decision between Atlanta and central Ohio's New Albany.
But New Albany won out, and its proximity to the insurance giant's Columbus headquarters was not the reason it was selected last fall as the site.
"We looked at many factors, and (the New Albany Business Park) was the best," said Ron Brown, director of Nationwide Corporate Real Estate's Mission Critical Group.
This was a win for all of central Ohio, which has become in recent years an attractive location for the kind of jobs you never see.
They are the kind of jobs that keep big companies running, whether it's a data center where big banks of computers hum, or call centers that communicate with customers, or processing centers that manage transactions and accounts.
Central Ohio's strength in such employment recently was illustrated by JPMorgan Chase's decision to add 1,150 jobs to its Easton and Polaris operations.
Numerous other companies with a national presence also have similar local operations: Alliance Data Systems has several call centers and 1,900 employees; State Farm has a similar number at two centers; the Discover Financial Services operation in New Albany has about 1,700 employees; and Medco has 650 customer-service representatives at its Dublin offices.
"The convergence of a highly concentrated, young and educated work force, along with relatively low labor and facility costs makes the Columbus region a great location for call centers and other back-office operations," said Matt McCollister, vice president of economic development for the Columbus Chamber.
There are 71 back-office operations in the area with just over 26,000 employees, according to CB Richard Ellis, a real-estate services and consulting firm that helps companies select locations for such operations. That figure does not include data centers.
With the help of tax incentives and the lobbying efforts of government officials and the Columbus Chamber, more centers and jobs could be on the way. However, the recession could put these plans on hold and cut into the existing work force.
Teleperformance recently announced that it was eliminating 218 jobs at its Columbus call center, and Discover cut 55 positions in New Albany this month. One expert said this area might be close to the saturation point for data and call centers.
"About 3.6 percent of the labor force (in central Ohio) is working in this area," said Mark Seeley, a managing director of the Labor Analytics Group of CB Richard Ellis.
"That's on the high end, and traditionally we look for markets below 3 percent."
Others believe there is still room to grow.
"We're not concerned about that; there are still a lot of qualified people in the area," said Kim Greaves of Chase.
He is in charge of hiring the 1,150 new employees.
"We've had job fairs and there's no problem; we think there are plenty of qualified people here," Greaves said.
More power, more people
Data centers cost more to build and have fewer employees, while back-office operations and call centers cost less to develop and have a much larger number of workers.
"We are very competitive in both areas," said McCollister, whose job is to sell central Ohio to companies planning such operations.
Data centers need high-quality, low-cost electricity and fiber-optics capabilities to run their computers.
"It's very expensive to move power lines, so you have to go where they are," McCollister said, adding Ohio's manufacturing history has led to a strong electrical grid.
Available and qualified employees are to back-room operations what electricity is to data centers.
Again, central Ohio is a major player, McCollister said, and "we come up on all the short lists of places."
Alliance Data provides back-room operations for many retail operations, including Limited Brands.
"We've not been challenged at all to find the skill sets and qualifications and experience we need," said Brandy Duchesne, director of human resources, retail services, for the Dallas-based company.
Positions range from part-time jobs for high-school and college students to full-time jobs for college graduates.
"We have found the population in the marketplace very supportive of our growth," said Mark Proulx, senior vice president, pharmacy and customer-service operations for Medco, a pharmacy benefit manager and mail-order pharmacy operation.
The New Jersey-based company has a customer-service call center in Dublin with about 250 employees who work full time and about 400 who work from home. It also has a Downtown pharmacy with 800 employees.
Proulx is confident that the company will continue to hire more central Ohio workers, and the work-at-home option makes it easier to hire customer-service representatives.
"What this enables us to do is expand the radius in which we can hire," he said, adding that currently most of the Dublin employees live within 20 miles.
Big-time development
The 2,000-acre New Albany Business Park has been a success story.
"Since 1998, we've had over 5 million square feet of development, over 8,500 employees and $52 million in income tax revenue," said Jennifer Chrysler, New Albany's director of development.
The business park includes a 600-acre Research and Information District designed with data centers in mind. It includes redundant power and fiber-optics technology.
Motorists Insurance Group recently announced that it was building a $14 million, tornado-proof data center in the district, and PharmaForce plans to build a 70,000-square-foot research and development facility.
The Nationwide data center is scheduled to open in 2012 and will employ 40 people. Construction will cost $15 million to $30 million and employ 100 to 200 workers, said Nationwide spokeswoman Liz Christopher.
"There's room for another 5 million square feet of development," Chrysler said of the business park.
Nationwide's Brown said New Albany had everything on his checklist.
"They had an advantage in operating cost and the quality of the community, a robust fiber-optics network and utility network," he said. "It was the right fit."
Moving forward
Continued growth will be a challenge for central Ohio, Seeley said.
Saturation is an issue -- and it can lead to companies poaching well-trained employees from one another and higher wages.
"And labor costs make up 70 percent to 80 percent of the overall cost for a call center," he said. "That's why it's all about labor costs."
The average starting salary in this area for a call-center employee is about $11.50, which is in line with other prime locations, Seeley said.
"But contrast it to Athens, Ohio, a smaller market where there are no call centers to speak of now," he said. "In this type of community you could theoretically save $1 to $1.50 an hour. And when you multiply that by 400 jobs, eight hours a day, that really adds up."
But central Ohio is less expensive than New York or Chicago, Seeley said, and "for companies looking for a specific skill set, for insurance skills and financial skills, Columbus can be very appealing."
swartenberg@ dispatch.com
Office spark
Despite a down economy, central Ohio has been adding hundreds of low-visibility jobs in recent months.
2009
• June: JPMorgan Chase says it will add 1,150 customer-service and data-processing jobs to its existing Easton and Polaris facilities.
• May: Motorists Insurance Group says it will build a $14 million, tornado-proof data center in the New Albany Business Park.
• May: Safelite AutoGlass decides to add 300 jobs to its Columbus call center.
• March: Verizon Wireless plans to add 125 customer-service jobs to its Dublin call center.
2008
• October: Nationwide announces plans for a $96 million data center in the New Albany Business Park.
• June: State Auto Insurance says it will build a high-tech data center in Delaware County.
Source: Dispatch research
