February 2003

By James Beatty, NCS International

Historically, when one thought of call center, back office and shared service center meccas in the U.S., places like Omaha, Kansas City, Tampa, Orlando, Phoenix, Houston, Dallas, Salt Lake City and Oklahoma City came to mind. It is doubtful that Albuquerque, New Mexico would have been high on the list. That changed on February 8, 1993 when Southwest Airlines landed and decided to locate its 50,000-square-foot, 250-seat, 425-sales agent reservation center there. Since then, the area has literally taken off.

Why Albuquerque? Why has this tranquil, clean, culturally diverse community become a favorite location for call centers, back-office operations and shared service centers? I wanted to learn the answer and discover why 21 companies, including AOL, Victoria's Secret, JC Penney and Citicorp have chosen this community. I traveled there to see for myself and to talk with representatives from Albuquerque Economic Development Inc., The Rio Rancho Economic Development Council (which is part of the Albuquerque MSA) and the Economic Development Group of the Public Service Company of New Mexico (the electric utility company serving Albuquerque). I also had the opportunity to tour the Southwest Airlines, Bank of America and Sprint PCS facilities and listen to their reasons for locating in the city and, more importantly, for staying there. I was also able to quiz them about their perceptions of the quality of the labor force in the area.

Population And Labor Force
Albuquerque, also known by the abbreviation 'ABQ' in the economic development and airport circles, is a community of over 712,000 in the metro area (MSA) with a labor force of 380,000 people, according to the New Mexico Department of Labor's September 2002 report. The Albuquerque MSA actually consists of the incorporated and unincorporated counties of Bernalillo, Sandoval and Valencia, which boast the cities of Albuquerque (population 556,678), Rio Rancho (population 89,908) and Belen and Los Lunas (combined population of 66,152). 

This represents an increase of 123,607 people since 1990, a significant 21 percent increase. The area is also projected to grow to over 900,000 by the year 2015. Population growth is always a healthy sign when evaluating an area. The average age in Albuquerque is 34.9 years, and over half the population is over 45 years of age. Over 62 percent of the adult females are employed, which is also a healthy labor participation rate. The city can also boast that 28.4 percent of people over 25 have a Bachelor's degree or higher, which ranks them 16th nationally. 

As another point of interest, the State of New Mexico has the highest number of PhDs per capita in the nation. No doubt this is due to the presence of high-level researchers and engineers in the private and the government sectors. Enterprises such as Sandia National Laboratories, the University of New Mexico, the Air Force Research Laboratory, the Lovelace Research Institute, Intel and the Los Alamos National Laboratory certainly impact the high level of brainpower in the state.

For call center and back-office operations actively seeking racial and ethnic diversity to reflect their client bases, Albuquerque offers a unique blended population. 

The ethnic distribution is as follows:
American Indian and Alaska Native 5.6%
Asian 1.7%
Native Hawaiian & Other Pacific Islander 0.1%
African-American 2.5%
Hispanic/Latino 41.6% 
Caucasian 47.7%

Note: the numbers do not add to 100 percent due to exclusion of population that may state some other race or more than one race. Source: U.S. Census Bureau, Census 2000.

According to several of the call center executives with whom I spoke, the presence of ethnic and cultural diversity made recruiting workers easier due to 'extended families' or households having family members such as aunts, uncles and cousins available for employment. 

Customer care centers that are searching for bilingual capacity should note that 35.5 percent of the state's population is bilingual and according to Univision, Albuquerque's Spanish-language television station, 38.8 percent of the city speaks Spanish and English, with English being the dominant language.

Albuquerque's Kirtland Air Force Base employs over 23,000 people, including more than 4,200 active duty and 1,000 guard, plus 3,200 part-time reserve personnel, thus making a complement of spouse and dependents available for the area's work force. Over 23,000 students at the University of New Mexico also add to the available labor force ready for customer care and shared services operations. These numbers do not typically show up in the area's labor force data. The area's per capita income of $20,025 also suggests that customer care positions in the $10 per hour range will be competitive. Additionally, the labor force has demonstrated its willingness to commute 30 to 45 minutes for well-paying jobs.

Telecommunications
Albuquerque is served by Qwest Communications, Time Warner Telecom, e.spire Communications, Worldcom and CityNet Telecommunications. Combined, these companies offer digital technology, fiber optic and broadband services. There are Sonet rings in the area for reliability and redundancy, and services from DS-1 to OC3 are available. Qwest has a 5ESS digital switch serving the metro area. 

Albuquerque is home to two data co-location facilities. Bigbyte is in a 65,000-square-foot building located downtown which offers power reliability and broadband access, and Worldcom has a 40,000-square-foot facility co-location and switching station in the North Interstate 25 corridor. There are 10 other firms providing long-distance services in the area.

Availability Of Buildings And Facilities
There were 10 to 12 Class A and B buildings available, ranging from 45,000 square feet to 180,000 square feet, with rents in the $9 to $10 triple net range and higher. One facility that caught my attention was the former Gateway Computer call center which, through no fault of the City of Albuquerque, closed in 2002 due to industry economic conditions.

Customer service-related wages in selected occupations appear in Table 1.

As I spoke with several area call center managers, it was apparent that starting wages in the call center environment were in the $8.50 to $9.50 range.

Table 1.

Source: New Mexico Dept. of Labor

Incentives
There are certainly some very competitive incentives available, however, I would like to highlight two that pertain to call centers that locate in urban Albuquerque and in rural New Mexico. These incentives clearly demonstrate the area's willingness to encourage call center jobs. Known as the 'In-Plant Training Program,' the plan provides $10 million to provide classroom and on-the-job training. Customized training may be provided by post-secondary educational institutions, company trainers or outside trainers. The program will:
' Reimburse 50 percent of trainees' wages up to 1,040 hours in urban areas.
' Reimburse 60 to 65 percent of trainees' wages up to 1,040 hours in rural areas.
' Reimburse 100 percent of classroom training costs provided by New Mexico post-secondary schools.
' Partially reimburse trainees' travel and per diem expenses for out-of-state training.
' Partially reimburse company or outside trainers' travel and per diem expenses when using out-of-state trainers.
Tables 2 and 3 depict the economic impact for a company.

Table 2. Example of value of in-plant training reimbursement for new hires - urban.

Table 3. Example of value of in-plant training reimbursement for new hires - rural.

Call Center, Back-Office And Shared Services Overview
Albuquerque has 21 companies in these fields, employing 12,405 individuals. This translates to 3.3 percent of the area's 380,000 work force employed in this great industry. Among these companies are such recognizable organizations as Sprint PCS, Bank of America, the Victoria's Secret Catalog, JC Penney, GE Card Services, Citicorp, MCI, AOL, ClientLogic, Qwest and Southwest Airlines.

Albuquerque has definitely carved out a niche and a name for itself in the call center industry, and is definitely worth your while to review when considering new locations, especially in the technical support and shared services markets. 

I would appreciate your comments and views' you can e-mail me at jbeattyncs@aol.com, and for the latest on call center location information, please visit www.callcentersites.net, the official site for call centers and back-office locations worldwide.

James Beatty is president of NCS International, Inc., which specializes in corporate site selection, community analysis and marketing.

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