Canada Officials Will Need to Plan Carefully to Weather the Coming Storm

Patrick Barnard
Group Managing Editor, TMCnet

Canada Officials Will Need to Plan Carefully to Weather the Coming Storm

Government officials in the various provinces of Canada which are highly reliant on the call center industry to keep the economy afloat are no doubt scrambling to try to come up with additional incentives and new strategies to keep U.S. companies from pulling their centers out.

A recent report from Datamonitor shows that many U.S. firms are now starting to pack up and relocate their Canada-based call center operations due to the increasing value of the U.S. dollar and the increasingly unfavorable exchange rate. Even call center outsourcing behemoth Convergys recently announced that it will be closing some of its facilities in Canada in the coming months. This is bad news for New Brunswick, which relies heavily on the call center industry for jobs and economic growth and is in the process of trying to become independent.

In an article written today by TMCnet’s Susan Campbell, independent economic consultant David Campbell “argues that the area should put more emphasis on attracting financial services and hedge fund centers, which tend to pay higher salaries.” So one approach the this problem will be to continue to emphasize the fact that New Brunswick offers a well educated and highly skilled workforce and therefore is better suited to providing high value, high touch call center services. As Susan explains, “New Brunswick has a goal of becoming self-sufficient by 2026. Campbell warns that this goal will never be realized if the region continues to offer incentives to call centers that pay employees no more than $10 to $12 per hour.”

“Those jobs filled a need, but now that we have low unemployment, we need to look for jobs that will contribute taxes that will pay for government services,” Campbell said in a statement. “Essentially, we were attracting jobs that did not generate enough taxes to pay for the government services covering the worker.”

“Much like other locations, New Brunswick has found that more sophisticated contact centers tend to remain, especially those in IT and financial services. Call centers that live from contract to contract and whose basic operations include calling out to sell everything from phone services to car insurance, have proven to be transient.”

My take? Canada is going to be greatly challenged to keep its call center industry from shrinking unless it starts offering additional economic incentives to U.S. companies. Some regions are going to have a hard time attracting new center based on their “highly skilled workforce” alone, especially considering that workers with good IT skills are now finding opportunities in other industries outside of the call center realm all across Canada. It could be that as some U.S. firms begin to pull their operations out, the percentage of workers with good IT and customer service skills will begin to increase, thus creating new opportunities for Canada to attract new, “premium” centers which handle more complex, higher value transactions.

Now is the time for Canada officials to start planning carefully -- not panic, but calmly plan. With the right mix of economic incentives and skilled workers, it just could end up attracting the kind of centers it needs to make it through the rough times ahead ….

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