State employment services agencies have been undergoing significant redesign in response to changes in technology, customer demands, and the declining purchasing power of federal aid to support these services. One of the critical elements in this transformation has been the shift of many states to the use of call centers for the filing and processing of UI claims, eliminating the need for numerous local unemployment offices. For example, in Wisconsin, 54 local UI offices were consolidated into two call centers, one in Milwaukee and one in Madison.
The rationale for this redesign was to create greater efficiencies for both the employment agency and its customers. UI call centers in Wisconsin have reduced space requirements and building maintenance by 50 percent, and have incorporated an automatic profiling process for immediate referral of long-term dislocated workers to employment services. Wisconsin estimates that this move reduced their staffing requirements by 25 percent, saving roughly $1 million annually in administrative costs. In addition, they estimate that customers realize as much as $11 million in benefits through the elimination of long drives to local offices, parking, standing in lines, child care, and service response time.
The move to call centers has a significant impact on the design of the employment service delivery system at the local level. Without the overhead support of local UI workers, many local Job Service centers have been financially compelled to relocate and/or collaborate with other partners in the same space. This financial pressure is one of the most compelling factors driving the development of One-Stop employment service systems. In Kenosha, no UI claims are processed or serviced at the Kenosha County Job Center and all employment services are provided under contract. Most of Kenosha's employment specialists were quite clear that without the collaborative efforts of their partners, they would not have the resources to staff their resource room and provide job search and placement counseling for their welfare and other clients. Thus, the move to UI call centers has made the development of One-Stop systems a necessity if employment services are going to continue to be made available.
The net effect of these linked policy initiatives on employment services does not necessarily have to be negative. Again, in Wisconsin, which combined these efforts with the implementation of JobNet, its computer-based touchscreen employment exchange system, reports significant improvements in job referrals and employment rates for registered job seekers.
Not all states are moving toward these complementary systems at the same rate. For example, in Michigan, initial claims were still handled in person by the Michigan Employment Service Agency (MESA) at the One-Stop office, but all subsequent claims contacts were handled by phone. However, not long after our site visit, Governor Engler announced his intent to abolish MESA, although it is unclear what this might mean for the UI claims process. In Marshalltown, UI claims were still handled at the Workforce Development Resource Center. In Bellingham, UI claims were handled by the Employment Security Department in a separate building near the Center for Workforce Training; although the state plans to implement UI call centers within the next 18 months. Thus, as some of these states move to UI call centers, the financial pressures for maintaining local facilities and overhead may intensify the mandate for local collaboration among the remaining workforce development services.