• November 25, 2003
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

BPO: Northern Exposure

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U.S. call centers are packing up and moving north, according to a Datamonitor research report. The report, "Profiting from Canadian Call Center Outsourcing: lowering risk and maximizing savings," 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, a call center analyst at Datamonitor. Several large companies have already started an exodus from the United States to Canada, including Marriott, UPS, AOL, and IBM. The report states that 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 occurs, prompting fewer call centers with more agents. Ryan adds that the highest growth regions will be western Canada and Quebec, due in large part to pro--business 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 says it prompted a "capital flight." This lowered real estate values and raised the unemployment rate, which, in turn, lowered labor costs. Ryan suggests that the best investment opportunities for call centers, considering price, labor, real estate, and agents' education level, would be British Columbia, Alberta, or Quebec. He adds that Quebec has a larger bilingual population than Ontario, and that labor costs are cheaper. Additionally, he says attrition rates for Canadian agents 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. However, although locations like India, Malaysia, and Mexico are inexpensive, according to Ryan in many cases they are volatile politically and possess poor infrastructures.
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