Mutual fund companies' telephone call centers are under pressure to be staffed by increasingly knowledgeable employees at a time when low unemployment has made hiring and retention tougher.
Qualifications for employees have risen as financial issues which investors face have grown more complex, fund company executives say. In order to find employees able to handle these new complexities with the current low unemployment levels, companies are trying new recruiting efforts, job promotions, bonuses and increased training.
The issue of how call centers are staffed is a critical one for the mutual fund industry, which prides itself on its service and trustworthiness. While investment performance is key to attracting new investors, executives say that service helps keep investors and increases the likelihood of selling them other funds and services.
The ability of a company to respond effectively to calls is "what retains assets," said Robert Brady, president of MainStay Shareholder Services, the transfer agent for the MainStay Funds. "We are the point of contact for our shareholders," Brady said.
Five years ago, telephone call centers were often staffed by those with only high school educations, Brady said. MainStay's phones today are staffed by college graduates who go through a ten-week training program and must pass exams.
New products such as the Roth IRA and investors' needs are "really raising the bar," Brady said. "Our customers' expectations have gone up."
The need for knowledgeable telephone call-center representatives has increased the importance of hiring and retention. Executives said that staffing has become more problematic over the past two years because of not only low unemployment but also industry growth.
Recruiting efforts have become fairly aggressive. First Data Investors Services Group of Westborough, Mass., for example, has dedicated one of its recruiters to hiring on college campuses, said Richard Morris, First Data's director of recruitment. First Data now interviews students and makes job offers prior to graduation, Morris said.
First Data also has begun hiring college students who participate in so-called co-op programs, degree programs in which the students attend school for several months and then work for several months as part of their schooling. The company then tries to lure back interns after graduation.
Dave King, president and chief executive officer of John Hancock Signature Services, the John Hancock subsidiary which services the company's insurance and mutual fund clients, said that low unemployment and high employee mobility around Boston, Hancock's headquarters, have made it hard to hire and retain telephone staff.
That was one of several factors in the company's announcement in December that it will open a second service center in Albuquerque. Albuquerque's stable work force and proximity to the University of New Mexico are expected to help meet staffing needs, King said. Nevertheless, the company plans to keep its Boston service center.
The economy, of course, is not the only reason staffing telephone call centers can be difficult. The work is not for everyone. There are a high volume of calls - Hancock's telephone service center, for example, handles about 3.5 million calls a year. And the investors on the other end of the line are not always friendly.
"It's a tough job for people," King said.
That can be particularly true when the calls are outbound instead of inbound. Representatives of mutual fund proxy solicitation firms, for example, may routinely call investors to ask them to vote yes on issues such as raising mutual fund fees.
"There are going to be some tough calls," said Richard A. De May, group executive for D.F. King & Co., one of the firms whose employees routinely make calls to mutual fund shareholders as part of proxy solicitation campaigns.
De May said that in addition to technical knowledge, call-service employees need the diplomacy to deal with the public and have a pleasant telephone manner. Indeed, D.F. King conducts part of its employee interviews over the telephone.
"I could look like Tom Cruise, but if I can't talk over the phone, it's no good," said De May.
As unemployment has gone down, total compensation in the form of pay, bonuses and promotions has risen, companies said. Starting salaries for call-center employees start in the $23,000 to the low $30,000 range, executives said. The rate varied on the region of the country and the type of call-center position available. Telephone sales, for example, offered better rates than responding to investor inquiries, executives said.
Companies have tried to promote within phone centers and have created training and supervisory positions to accomplish this. In some instances, they also have offered so-called "stay" bonuses to retain employees.
For example, companies will offer a call center employee who reaches a one-year anniversary a bonus, said Stephen Oteri, a consultant to mutual fund call centers with Stephen Beard & Associates of Belleair Bluffs, Fla. Half of the bonus will be paid immediately with the balance paid at the end of the second year if the employee remains. The programs can, however, become expensive.