Print

Email story

Comment

Letter to the editor

Sykes turning toward home

The customer call handler will reopen a Kentucky center.

By James Thorner, Times Staff Writer
Published June 22, 2007

Who would have thought? Sykes Enterprises Inc., the Tampa-based call center operator that caught the offshoring bug a few years ago, is actually hiring people in the United States.

Sykes is returning this year to the Kentucky town of Hazard, a site it abandoned in 2003 when the company was outsourcing call centers hand over fist to Asia and Latin America.

Why the reprieve for Hazard? With its return, Sykes will be operating eight domestic call centers in places ranging from Minot, N.D., to Sterling, Col.

The $574-million company didn't return calls to the Times. But corporate executives offered explanations in a conference call to discuss earnings earlier this year:

Aside from the economies of reusing idle buildings and equipment in the United States, Sykes suggested some clients prefer native U.S. speakers to handle customer service requests, even if it costs them more.

In the words of chief executive Chuck Sykes: "There are several segments within financial and communications that still have a propensity to want to have a domestic-based solutions."

Chuck Sykes is the son of company founder John Sykes.

Sykes handles customer service calls for about 200 clients that include AT&T, Microsoft, credit card companies, insurers, wireless providers and banks.

Not that Sykes is backing away from what it calls its "offshore solution." In the call-center industry, hundreds of thousands of jobs have drifted overseas the past decade. Foreigners, even college graduates, often work for $1 to $2 per hour.

In 2006, Sykes ran 41 call centers in 18 countries. Europe and South Africa accounted for 18. The Philippines hosts some of the company's biggest operations, with seven call centers clustered in and around Manila. The company has more than 26, 000 employees.

To handle an increased volume of calls, Sykes expects to expand overseas by 3, 400 "seats" this year. Even though labor shortages are driving up wages in the Philippines by 10 percent, the company said U.S. employees remain many times more expensive.

Sykes stock, which traded below $5 a share in 2004, closed Thursday at $18.70.

But Sykes' rediscovery of Kentucky is good news for the coal-mining town strapped with 6.6-percent unemployment. Sykes maintains that its departure in 2003 was temporary and that the restoration of 200 jobs is no surprise.

As Hazard Mayor Bill Gorman told the Times in late 2005: "I guess they just like mountain people."

James Thorner can be reached at thorner@sptimes.com or (813) 226-3313.

[Last modified June 21, 2007, 23:15:09]