New research shows that the Canadian call center industry is growing at a rate of 20 percent a year and, with the introduction of Web-enabled Canadian call centers, the industry is expecting even stronger growth.
Although the great majority of call center operations remain in-house, more and more call center firms are turning their sights on Canada, attracted by available manpower and low costs that ensure competitiveness in this rapidly changing sector.
The figures are compelling: a KPMG study comparing business costs in North America, Europe and Japan once again gave glowing marks to Canada, where costs were 7.8 percent below the U.S. average, a cost advantage that remains intact as long as the Canadian dollar is lower than U.S. $0.79.
| Of special interest to call centers are declining telecommunication costs, once a pet peeve of Canadian business. |
The study compared a total of 64 locations in Austria, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Canada's cost figures were lower across the board for land, construction, labor, electricity and telecommunications.
Technical and professional labor costs are especially competitive. On average, Canadian call center agents earn 25 percent less than their U.S. counterparts.
Of special interest to call centers are declining telecommunication costs, once a pet peeve of Canadian business. A survey of prices in Canada and the United States done by The Yankee Group in December 1998 shows that Canadian business is now at an advantage in terms of telecommunications services.
The survey compared pricing from the dominant service providers in Toronto, Montreal, Atlanta, Chicago and San Francisco.
This cost differential is due in part to the exchange rate of the Canadian dollar but also reflects dramatic changes in the Canadian telecommunications industry with carriers adjusting rates and lowering charges across the board.
Labor is key to success
In New Brunswick, teleservices operations have found the depth and breadth of manpower they require for large and expanding operations.
New Brunswick has approximately 70 call centers employing over 7,500 people.
In just 10 weeks, Philadelphia, Pa.,-based RMH TeleServices Inc. had a 400-employee inbound and outbound operation up and running in Oromocto, where all calls will be made into the United States. RMH has 13
U.S. call centers which specialize in insurance, financial services and membership services for Fortune 500 companies.
Fulford Enterprises, the telemarketing agency for Trendwest Resorts, opened a first operation in Sackville, New Brunswick, in 1998, then subsequently announced in May the opening of a second center in Dalhousie.
"We have been able to triple our business since coming to the province a little over a year ago", explained company president Bob Fulford.
Also expanding in the province is Xerox Canada. The firm, which was initially established in Saint John in 1995, announced in January that it would add 435 jobs to its operation by creating a telebusiness and Internet division.
Cendant Canada will bring employment levels at its Saint John, New Brunswick, reservation center to over 700 by this fall. At the same time, it will open a second 300-employee reservation center in Fredericton. Cendant handles reservations and customer inquiries for Avis Rent-a-Car and hotel brands such as Days Inn, Howard Johnson, and Ramada.
Another project is that of Dallas, Texas,-based ClientLogic, a marketing services company focused on the e-commerce and high-tech markets. ClientLogic will lease a 40,000 square foot customer contact management center on the site of the Lantic sugar refinery overlooking the harbor of Saint John.
Neighboring Nova Scotia also can boast of a number of successes, with Staples and Arrow Electronics coming on board with their own customer contact centers.
Nova Scotia is also home to the largest teleservice center in Atlantic Canada. The MATRIXX Marketing center has over 500 stations equipped to handle 20 million calls a year.
MATRIXX is a part of Convergys Corp., a Cincinnati-based customer care and billing operation that employs 30,000 worldwide. The Dartmouth center operates around the clock, seven days a week and
deals exclusively with incoming calls for AT&T.
Nova Scotia is ensuring its place in the new economy with the Information Economy Initiative, a three-pronged approach that will provide computer and Internet access to every junior and senior high school in the province.
Additionally, the initiative will foster research and development at Dalhousie, Acadia and University College of Cape Breton, and add another 100 sites in the province to provide Internet access and on-site trained staff in rural areas.
Dalhousie is developing an Institute for Global Computer Networking, as well as a master's of engineering program focused on the Internet. The Nova Scotia Community College, for its part, offers both teleservice and telefinance agent programs.
Merger brings Excel to Quebec
Quebec was pleased to land the much coveted Excel Canada call center. Excel was formed earlier this year following the merger of Teleglobe of Montreal with Dallas, Texas,-based Excel Telecommunications. Excel officially entered the Canadian long-distance market in March.
Other recent announcements will further add to the Quebec industry with International Business Directory hiring 429 employees, Sprint Canada Inc. selecting Montreal for its eastern Canada call center, and French natural beauty care company, Yves Rocher, opening a second call center to serve its North American clients.
Thanks to the 11 languages spoken by its Montreal staff, Yves Rocher, whose products are used by 25 million women in 84 countries, is looking to expand to Great Britain, Australia, South America and Puerto Rico.
Observers agree that nowhere else in North America can you find the variety of languages spoken in Montreal.
"Over the course of 18 months, 20 companies have established call centers or expanded operations in Montreal, creating 6,000 jobs," said Diane Jeannotte of Vision Quebec, a business recruitment agency.
Vision Quebec held a first-ever call center job fair in February, bringing together 6,200 applicants and 47 companies looking to hire 1,500 customer service representatives.
Vision Quebec also organized a one-day open house for Microcell Telecommunications where it provided 16 professional recruiters to screen 500 candidates.
Apart from its language capabilities, Quebec has a number of aces up its sleeve.
A comparative study of call center operating costs released by KPMG in June 1998 gives Montreal a cost advantage of almost 42 percent over the average of 12 American cities included in the study.
The labor costs differential ranged from 14.5 percent for Atlanta to 38.2 percent for Minneapolis, while occupancy costs in Montreal were considerably lower than in Boston (74.7 percent higher than in Montreal), Minneapolis (65.5 percent) and Las Vegas (49 percent). The same report found that Quebec had the lowest taxation rate of all regions under study.
Training spurs call center growth in Ontario
The availability of not only labor, but vocational training programs, are providing a steady fuel supply for Canadian communities that are home to call center activity. This is definitely the case in Ontario, which is home to 48 percent of the country's call centers.
The newest contenders in Ontario are Stratford, a town of 28,500 in southwestern Ontario, and Kingston, the "limestone city" on the shores of Lake Ontario.
The Royal Military College in Kingston offers one of the best computer engineering programs in North America.
Kingston has been chosen as the location of one of five centers to be set up by Nordia Inc., a new company formed by Bell Canada and Excell Global Services of Phoenix to offer directory assistance, teleconferencing and long distance operator services.
Sixteen Ontario community colleges offer certificate programs or customized training for the call center industry.
Adding to its call center operations program, Centennial College in Scarborough is now offering, through its E-Commerce Institute, a one-year post graduate program in E-commerce, the first of its kind in the province.
The Institute was set up earlier this year with the partnership of IBM Canada, SAP Canada, Cisco Systems, Bell Canada and Teknion Furniture Systems.
The case of Omega Direct Response Inc. is indicative of the level of growth enjoyed by call centers in Ontario. Launched in February of 1998, the company has a 288-seat call center in Toronto and opened a second 300-seat center in Sudbury in May to accommodate growth.
According to call center director Steve Grier, Omega recruits 95 percent of its clientele in the United States, with outbound U.S. calls representing 90 percent of its business.
In Ottawa, Bank One opened a customer service center in December. The banking giant employs 500 people at the facility. In Brantford, RMH Teleservices recently expanded, adding 150 jobs.
A Canadian company, Media Express, is opening a new facility in Hamilton. The Montreal-based company will open the center with 150 people. Another Canadian telemarketing company, Teletech, opened a new facility in Sudbury in January. The firm employs 200 people at the site.
Vox Data also opened a new facility earlier this year in Ontario. The company employs 200 people at the Toronto center.
There are more than 3,000 call centers in Ontario, with the majority of them located in the Toronto metro area. Other major call centers in the the area include facilities for: Allstate Insurance, American Express, AT&T Canada, Bank of Montreal, Bell Canada, British Airways, Cantel AT&T, Citibank, Dell Canada, Epson Canada, IBM Canada, Liberty Health, Rogers Cable and Sprint Canada.
Western expansion
Manitoba's call center industry is also growing at a rapid clip, with 1,000 new positions opening every year since 1994.
Angus Reid Group, a market research and public opinion polling company, which originated in Winnipeg in 1979, is adding 203 full-time jobs. In addition, Gage Marketing Group, an integrated marketing company based in Minneapolis, is employing 226 to service Publishers Clearing House from its Winnipeg facilities.
Air Canada has expanded its telephone reservation and frequent flyer services by relocating into the newly renovated Winnipeg Free Press building.
| "We have been
able to triple our
business since
coming to the
province (New Brunswick) a little over
a year ago."
-- Bob Fulford, president,
Fulford Enterprises |
A local company, Fine Line Communications, is also expanding its paging, data processing, messaging, call center and help desk services by creating DataStream, a new payment processing and database management company that provides national data entry, donation help desk and credit card donation services.
In British Columbia, C TEL, the government of British Columbia, and economic development officers throughout the province have formed LINX BC, British Columbia's call center team, to promote the advantages of Canada's westernmost province.
"The cost and labor advantages of British Columbia are some reasons why U.S.-based based organizations like Hewlett Packard, Computer Associates and Seagate Software, and global and national banks such as HongKong Bank and Canadian Imperial Bank of Commerce have chosen to locate call centers in our province," explained Kathryn Seeley of LINX BC.
| Although the great
majority of call center
operations remain in-house, more and
more call center firms
are turning their sights on Canada. |
In May, PricewaterhouseCoopers released a study that documents those advantages by comparing the cost of a 100-agent service center in six British Columbia communities and seven U.S. communities. The overall cost differential ranged from 12.69 percent to 40.75 percent higher than Vancouver, with electricity and occupancy costs showing the strongest differential.
Canada's lure
"In their search for differentiation through better customer service, companies are increasingly turning to call centers," said Brian Villeneuve, senior business consultant, International Services, Investment Branch of the Ministry of Economic Development, Trade and Tourism of Ontario. "Density of population, skill sets, language capabilities and educational levels take top priority when they are short listing communities."
And this is where Canada comes in with just the right combination to allow companies to thrive and compete in a rapidly changing environment.
Louise A. Legault is a Montreal-based freelance writer.
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