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Illinois City Scaling Back Grant Money for Contact Center Falling Short of Hiring Goal

It’s not an uncommon scenario: a new contact center promises a city x number of jobs, and the city, in turn, promises grants to the contact center company based on those jobs. So what happens when the contact center hires only a portion of the employees it originally promised? A Rockford, Illinois-based contact center company called FMS is about to find out.

The city of Rockford is now looking to lower the amount of money it will be expected to turn over to FMS, which in turn will reduce the number of jobs FMS plans to create. This is reportedly the second time the city has adjusted its development agreement with Financial Management Systems, said Industrial Development Manager Rob Lamb.

The original agreement from 2009 required FMS to employ 350 full-time employees, 51 percent of whom are low- to moderate-income individuals, by August 2010. In return, the city would provide FMS with $1,000 per job, reported the Rockford Register. The money was to be sourced from the city's Department of Housing and Urban Development’s Community Development Block Grant recovery funds – money reserved for addressing urban blight.

The agreement was first amended in early 2010, Lamb said, to give FMS funds in advance rather than reimbursement – in increments of $50,000 – to help the business get off the ground. The latest proposed amendment would give FMS until Dec. 31 to create 250 jobs and reduce the city’s payment from $350,000 to $250,000, said the Rockford Register.

The move will allow the city to take the $100,000 in federal stimulus funds that it planned to pay to FMS and put it toward another project, Lamb explained. He doesn’t know how the city will choose to spend the money, he said. The funds have a September 2012 expiration date.

“The city needs to ensure that we have those funds allocated to projects that will be able to spend the money and meet the requirements to receive the funds,” Lamb said. “We don’t want to return those dollars. We want those dollars spent to improve the city of Rockford.”

According to information shared with the planning and development committee Monday, FMS has 167 full-time employees at this time and still plans to expand to 350. A more realistic time frame for that is 2013, Lamb said. FMS’ efforts were hampered, Lamb said, by financial commitments – from both the private sector and the state – that fell through.

“The call center industry is very challenging,” Lamb said. “Many have turnover rates of 200 (percent) to 300 percent. ...The funds we gave them were intended to offset the cost of bringing on new employees. The company itself probably invested $5,000 to $6,000 per new employee.”

The average salary at FMS is nearly $15 an hour plus benefits, FMS officials said at the committee meeting. It also has a retention rate of 60 percent to 70 percent.


Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell