Phone-based service firms drawn to Northeast Ohio

by Tom Breckenridge and Michelle Jarboe/Plain Dealer Reporters
Monday May 04, 2009, 7:31 PM

CLEVELAND — Opportunity is calling.

Companies specializing in phone-based service -- from telemarketing to technical support -- have hired thousands of Northeast Ohioans in recent years.

Experts say our region is fertile ground for such companies, which are drawn by attributes many see as a downer -- lots of skilled jobless workers and empty buildings at busy crossroads.

Call center biggies, like TeleTech Holdings Inc. and InfoCision Management Corp., have opened offices from the Youngstown area to Lorain, as have smaller, more specialized operators.

Many of these jobs, paying $10 to $14 an hour, aren't the focus of most economic development strategies.

But many provide benefits and complement long-term strategies to bring higher-skilled, higher-paying jobs to the region, economists say.

"Not everybody can work at high-tech jobs, or have MBAs or Ph.D.s," said Ziona Austrian, director of the Center for Economic Development at Cleveland State University. "These jobs fit people with different skill levels and different educational levels."

The latest calling operation to land here is Collectcorp Corp., which plans to bring 60 jobs to an Engle Road office building in Middleburg Heights this year, officials said. The company anticipates having up to 135 jobs by the end of 2010.

The Phoenix-based company specializes in loan and credit collections for dozens of large companies, ranging from American Express to Bell Canada.

Collectcorp liked the region's work force and the proximity to Cleveland Hopkins International Airport. The company could receive more than $200,000 in tax breaks from Ohio and the suburb.

"The increase of our U.S.-based client business has increased our capacity needs," company Chief Executive Nicholas Wilson said in a press release Monday.

Team NEO, the region's leading business-development group, believes companies specializing in call center services are a growing sector.

Such companies account for about 1 percent of the region's $170 billion annual economic output, said Carin Rockind, head of Team NEO's marketing and communications.

Real estate brokers say that roughly a half-dozen companies are scouting Northeast Ohio sites for call centers or customer support operations.

Some of the companies already are in Northeast Ohio, while others have just a small presence here or would be new to the market.

Most are looking at suburban locations, which provide ample parking, though a few companies have expressed interest in setting up call centers in downtown Cleveland.

David Browning, managing director of the CB Richard Ellis brokerage in Cleveland, said he's aware of four or five potential call center deals in Northeast Ohio.

Two of them are in final lease negotiations and might be announced within two months, he said.

"I'm a little surprised by it, in that we clearly are in an economic downturn where a lot of firms are shedding jobs," said Browning, who has seen a small wave of interest in call centers during the last 60 to 90 days. "To all of a sudden have a category like this, call centers -- and it's various industries that these call centers are supporting -- it's good for the market and it's good for employment."

Browning and other brokers would not identify the companies that are seeking space.

An unidentified call center operator recently toured the former Cole National Corp. headquarters in Twinsburg.

Larry Finch, the city's director of community planning and development, said the company is looking for 50,000 to 150,000 square feet. The center might employ 600 people, with room to grow.

"I understand they're considering a couple other locations, in other areas and other states," said Finch, describing conversations with the company as "preliminary."

The U.S. call center market has experienced a slowdown since late 2006, but researchers said call centers actually have added jobs during the past year.

Some companies that sent customer service overseas are rethinking outsourcing and bringing call centers home.

"Although there has been a lot of growth internationally, there's been a lot domestically, as well," said Sean Carman, senior director of research and consulting with CB Richard Ellis' labor analytics group in Phoenix.

He believes companies are putting a greater emphasis on customer service and keeping their existing customers, rather than spending money to woo new ones.

"Every company's got their own reason," he said. "I really haven't had a chance to ask people why they're growing."

Executives with CB Richard Ellis' labor analytics group said that most of the call centers they have scouted for in Ohio involved higher-end skill sets, related to pharmacy, technology, nursing or health.

Though the average starting call center wage in the Midwest was $10.14 per hour last year -- or roughly $21,100 per year -- workers in more specialized fields such as nursing can make more than $45,000 a year, said Jim Trobaugh, a senior vice president with the labor analytics group.