Despite some of the political and economic unrest in Canada, U.S. call centers are packing up and moving north, according to a Datamonitor research report.
The report is called "Profiting from Canadian Call Center Outsourcing: lowering risk and maximizing savings," and states that outsourced call center agent positions in Canada are expected to rise 52 percent by 2007.
"We expect the Canadian call center growth to be swift. It will be driven to a very large extent by United States companies, because of the low cost, accessibility, stability, common culture and infrastructure in Canada," says Peter Ryan, call center analyst at Datamonitor.
The report states the number of outsourced call centers in Canada will rise from 450 in 2002 to 600 by 2007, an increase of 33 percent. Actual outsourced agent positions will grow from 24,200 to 36,800 during this same period. However, the growth of agent positions is expected to outpace that of facilities growth, as industry consolidation makes its way into the call center market, prompting fewer call centers with more agents.
Ryan adds the highest growth regions will be western Canada and Quebec, due in large part to probusiness administration put in place to help restore an economy battered by political unrest. Although the threat of Quebec separating from Canada no longer exists, Ryan maintains, it prompted a "capital flight." This lowered real estate value and raised the unemployment rate, which, in turn, lowered labor costs. The best investment opportunities for call centers, considering price, labor, real estate and the agents' education level, would be British Columbia, Alberta, or Quebec, Ryan suggests. He adds Quebec has a larger bilingual population than Ontario, and labor costs are cheaper.
Additionally he says attrition rates among Canadians are lower than U.S. agents', primarily due to high unemployment rates. There are some areas, such as the Maritime Provinces, he says, that have had unemployment rates in the double digits for several years. "The higher the unemployment rate, the more you're likely to stay at your job," he says.
The report acknowledges the competitive threat of offshore call centers. While locations such as India, Malaysia, and Mexico are inexpensive, in many cases they posses volatile and poor infrastructures, Ryan says.
Several large companies have already started an exodus from the U.S. to Canada, including MetLife, Sears, and USAir.