Community and Company Cooperation to Serve Millions of New Customers

By the Kitsap Regional Economic Development Council
1-877-465-4872 or www.kitsapedc.org
Kitsap County, Washington

 The Company
A wireless communications company (“Company A” for confidentiality), with $5.7 billion in sales and 17,000 employees in 2000, searching for a new call center site to serve millions of new customers: 6.7 million in 2000, up 2.2 million from 1999.

The Company’s Needs
High-quality customer service is pivotal to Company A’s competitive strategy. It needed 500 customer-oriented, dependable and affordable new employees, and a 60,000 square foot building. It also needed to begin serving new customers as soon as possible.

The Community
Kitsap County, Washington, is a community of 230,000 residents a half hour ferry ride west of downtown Seattle, nestled between Puget Sound and the Olympic Mountains. The Kitsap Regional Economic Development Council (“KREDC”) is a focal point of the community’s efforts to attract and retain primary employers. Comprising the KREDC Board at the time were many of the community’s key decision makers, including: one of three county commissioners; the president of the community college; and CEOs of a commercial real estate firm, a major business park, a large manufacturer, a civil engineering firm, and large construction company. This was a proactive Board who wanted to, and could, make things happen fast for the right employer.

Development Strategy
The KREDC had strategically designated large teleservices companies as a preferred type of new employer. The new jobs would be primary, have an economic multiplier effect, and be the next career ladder rung for many entry-level workers. Work schedules would be flexible for part-timers, such as mothers with school age children and military spouses and retirees (There is a large military presence in Kitsap.) Teleservices fit with another community strategy: developing a modern telecommunications infrastructure to support quality growth.

KREDC Board members and staff hosted the exploratory and negotiating meetings with Company A. The community listened carefully to what Company A needed, and probed to make sure they heard the needs clearly. “In responding to their needs, we went far beyond the ‘brochure-type’ answers,” said the then-chairman of the KREDC. At the behest of the KREDC, the State job service, the community college, high schools, and even large employers (potentially competing for the same labor) verified the quality of the labor force and wage rates. Local realtors presented potential call center sites. Telecommunications executives described their infrastructure and rates. WorkSource of Kitsap County (a local consortium of the State’s job service, vocational rehabilitation and public assistance agencies, as well as educators, private employers, organized labor, and the KREDC, organized as the workforce development council under the Workforce Investment Act of 1998) committed to doing all of the recruiting and preliminary screening for the new positions at no cost. The county commissioner committed to a “fast track” simultaneous (rather than sequential) permit process if new construction were required. During the onsite visits, all of the local decision makers and persons responsible for follow through were aligned with members of Company A’s team to discuss and plan how things would get done. “I don’t think that prospective employers and their teams often see this level of local cooperation, coordination, integrity, and commitment,” said the KREDC Chairman.

There was no need to advertise for job applicants. WorkSource supplied more than 2,100 applicants in three months. It tested each applicant’s typing and computer proficiency. Kitsap County government provided a $30,000 Community Development Block Grant to pay for the testing and temporary training facilities. WorkSource contributed six PCs and a LAN for the testing, and they helped Company A conduct its group interaction assessments. Some of Company A’s human resources staff worked out of WorkSource offices. Olympic College provided temporary classroom space and 50 computer hookups for initial training, along with office space for more of Company A’s administrative staff. Kitsap Transit arranged special transportation for trainees prior to construction of Company A’s new building.

Ninety-five (95) percent of new customer care representatives graduated from the initial four-week training.

The wage rate for customer care representatives was about two-thirds the industry average for customer service representatives.[1] (Some of this difference is undoubtedly due to the newness of Company A’s positions.)

Turnover among customer care representatives in the first six months was 6 percent, or 12 percent annualized. This compares to an industry average of 26 percent annually for full-time customer service representatives, and 33 percent for part-timers.[2]

Using a rounded base of 500 employees, the difference in annualized turnover rates of 12% versus 26% translates into 70 fewer employees (60 versus 130) lost per year. Company A reported a conservative cost of $3,000 per lost employee.[3] That is an annual savings of $210,000.

Ten months after opening the call center, Company A turned over the operation of all its call centers to a worldwide information technology and teleservices organization, under a long-term facilities management contract. Company A’s site director described the workforce as “talented, creative, and highly flexible. We’ve gone to a 24/7 operation and made other major changes, and they’ve been very willing to work through those issues with us. They’re one of the strongest groups I’ve ever worked with.” He added, “The level of support we’ve gotten from the community, starting with the day we walked into the door until now, has been fantastic. Without that support, we would not be as robust as we are now.” According to Company A’s HR director, the employees demonstrate “high work ethic and dedication. We have a great labor pool to draw on.”

Due in part to the quality of its experience in Kitsap County, Company A planned on shifting more of its customer service volume to this call center and creating another 150 to 200 local jobs.

Chris Endresen, Kitsap County Commissioner and member of the KREDC Board, said: “[Company A] is the type of primary employer that can provide employment opportunities for many people in Kitsap, including some who have not previously had the chance.” To new employers, she said, “We’re committed to making it as smooth as possible, and we have the partnerships and systems to make it so.”

The coalition of professional, civic and corporate individuals and institutions cited in this case study is intact and ready to work with other businesses interested in Kitsap County, Washington.  Please contact the KREDC directly at 1-877-465-4872 or on the Web at www.kitsapedc.org.

Research and case study by Casey Jones, KREDC volunteer.

[1] Customer Service Representative salaries averaged $31,818 in 2001, according to the International Customer Service Association, Call Center Management Review, 9/1/2001, as cited on www.incoming.com/industryfacts/hr.html. 4/12/02.

[2] 1999 Call Center Benchmark Report, Purdue Center for Customer Driven Quality, as cited on www.callcenternews.com/resources/stats_hr.shtml, 4/12/02.

[3] The average cost to hire a new TSR is $6,500, according to Dr. Jon Anton, [Purdue University] Benchmarking Study, 1998, as cited on www.callcenternews.com/resources/stats_hr.shtml, 4/12/02