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Low Costs, Highly Trained Work Force Draw U.S. Firms to Canada
U.S. firms looking to outsource, expand or take business out of the country are finding that Canada cuts costs and minimizes risks. This is readily apparent in recent trends in the information technology and call center industries.
Certainly that was the case for TeleSpectrum. The company, based in King of Prussia, Pa., opened a second call center operation in North Bay, Ontario, in February.
The expansion has boosted the number of seats from 190 to 300 and the number of employees to more than 660.
“The growth in North Bay was a cost thing,” said Jason Pichette, operations manager of the new center. “It’s more cost-effective to do the business here.”
IT outsourcing companies, including San Jose, Calif.,-based CenterBeam Inc., are also discovering the Canadian advantage.
The company announced in April that it would employ up to 290 workers within three years at a new facility in Saint John, New Brunswick.
Brian Johnson, a spokesman for CenterBeam, said an equally qualified Microsoft engineer in Saint John costs less than half the price of his/her counterpart in San Jose. In addition, the company needs technically minded people who speak English.
The five-hour time difference between San Jose and Saint John also gives the company extra time in each business day, yet allows enough overlap for both coasts to interface effectively.
CenterBeam received a $1.7 million forgivable loan from the province of New Brunswick.
“It’s an area of the world that’s known to us and that we’re comfortable with, and it presents us with strategic advantages,” Johnson said. “The government of Canada has been great to work with and the province of New Brunswick has been very supportive.”
TeleSpectrum and CenterBeam are among an increasing number of U.S. firms discovering the benefits of Canada: lower labor and overall costs, favorable exchange rates, stable government with a similar culture and legal system, English as the primary language, multilingual skills, proximity to the United States and shared time zones.
A KPMG study released earlier this year found that Canada has an 11 percent to 13 percent cost advantage over the United States in advanced software design, Web and multimedia services and back office/call center operations.
Companies Find Needed Workers
Canada not only has cost advantages, but its cities offer the workers to fill the seats.
“Some of them rival the very top of American cities for the size of the labor pool,” said Barry Gander, executive director of the Canadian Advantage Technology Alliance.
Terry Nickerson, vice president of ATI Technologies Inc., in Markham, Ontario, said high-tech talent is in abundance in Canada. ATI designs and manufactures 3-D graphics solutions.
“Our business really depends on technological people,” Nickerson said. “Over half of our people develop semiconductors. We like Markham because it has an incredible pool of high-tech talent. That was one of the key factors in our [location] decision.”
400 headquarters.
In Montreal, TELUS faced a challenge last year as it opened a new technical support center for Internet customers. The data and telecommunications company needed to hire 345 workers in about six months.
The Montreal area delivered, said Monique Pambrun of TELUS’ National Services Support Division.
“We were easily able to recruit experienced, highly skilled employees at the pace required to meet our targets,” Pambrun said. “We obtained [more than] 3,000 applications for our agent positions. We have successfully hired agents with the technical, customer service and system/process skills we require.”
Call Center Activity
Where call centers are concerned, Canada’s phone is ringing off the wall with U.S. firms seeking admission.
About 140 call center deals have been finalized in Canada during the past two years, resulting in nearly 43,000 jobs, said Steve Demmings, president of Site Selection Canada, an international consulting firm based in Winnipeg, Manitoba.
The majority of those centers were opened by U.S. firms.
In the first quarter of 2004, more than 2,700 new positions were created. Cincinnati-based Convergys, which has 15 call centers in Canada, led the quarter in job creation.
Financial services company Creditek established its first offshore center in Halifax, Nova Scotia, last year. It recently announced the addition of 100 jobs.
Ciba Vision, a division of Switzerland-based Novartis, has grown its back office center in Mississauga, Ontario, from 18 customer service representatives to 150 in five years.
In Saskatoon, Saskatchewan, Houston-based GC Services announced earlier this year that it would open its first Canadian facility with a 250-employee center.
Elsewhere in Saskatchewan, Xentel DM Inc., opened a 60-seat call center in May in Regina. The company offers integrated planning, marketing and production services for benefit events. It conducted a two-year study before choosing a location.
“We settled on Regina,” said Len Wolstenholme, director of corporate affairs for the company. “The reason is that it has a track record with call centers. We opted for Regina after researching the availability of employees. Our research made it clear that Regina is a business-friendly environment.”
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