The recent announcement by Superior Propane to open up a sales and administration office in Thunder Bay that would eventually employee up to 100 people (with wages ranging from $35,000 to $100,000) clearly indicates that Northwestern Ontario has come a long way towards a knowledge-based economy. Such transition is still ongoing, and not without challenges.
In the last decade, there has been substantial growth in the number of call centres, while jobs continue to be lost in the traditional resource-based sectors, like forestry. This in turn has helped create a perception that these centres only provide minimum wage jobs, and that we may be better off without them. This article will look at the actual experience to-date and the changing global consumer trends that are driving the demand for such services. Hopefully, this will provide the reader with a more balanced perspective.
Business and societal changes the driving forces behind call centres
Like it or not, the huge U.S. economy continues to exert an enormous influence over Canadian business practices since our gross domestic product is heavily reliant on U.S. market demands. The continuous need to meet changing customer requirements and needs and keep costs down, are forcing companies to operate around the clock in a globally competitive environment. Such business and societal changes and the resulting drive to outsource non-core operations have been the driving forces towards the explosive growth of contact centres. We may not even be aware of it, but Canadians are using them on a regular basis when they call their bank, insurance company, or make hotel and airline reservations. These are what we call inbound operations, and comprise around 80 percent of the contact centre business. Only 20 percent is actually outbound, but unfortunately most people think that is the other way around because at one time or another they have been called on the phone by a sales agent.
Canada as a logical service provider
The initial growth in call centres was in and around major cities like Toronto, with banks and large organizations filling in buildings with their own telecommunications centres. Continuous demand meant that U.S. companies started looking at Canada as a natural place to outsource, given the cost advantage (labour and health care costs, and exchange rate providing a 25 percent savings). The cultural, technological, language, and time zone similarities, allowed both U.S. and Canadian companies to grow and prosper in this sector of the economy.
How did Northern Ontario benefit?
The weakness in our communities including the availability of a large educated pool, empty office buildings, first stage government support programs, combined with a vastly improved telecommunication infrastructure, has enabled our cities (and region) to attract a number of call centres. While I agree that these wages do not match those of the past, they still make a substantial contribution to the economy. In fact, over 9,000 people making an average of $10-per hour plus benefits are now employed in contact centres across Northern Ontario. Most, but not all, are young people who may have left for greener pastures had they not the opportunity for such jobs.
The spin off effect can be substantial.
These new knowledge-based jobs require a lot of office space. Buildings have to be renovated employing trades people for months. They still make good wages. The ongoing supply of goods and services and maintenance of new computers, workstations, and electronics is provided mostly from local suppliers. The value of the buildings do increase, so do the taxes paid to the municipalities. Telephone companies derive substantial revenues from the installation and use of hundreds of phone lines. The people working in such office are also contributing to the revitalization of the downtown cores, whenever they visit a restaurant or retail outlet. Such experience is being repeated throughout the North.
The bottom line is that call centres contribute to the economic expansion and viability of our communities. They also allow a large number of workers to move up into better paying jobs, like those being offered at Superior Propane.
This helps build a strong base of knowledge-based employees. A good number of contact centres employees and most outside technical support staff are already in well paid, high-tech positions. The challenge now is to develop even more of these higher end jobs, so families can benefit from a higher disposable income and a larger share of the economic pie.
Frank Pullia is the Principal of Pullia Accounting & Consulting and a City Councillor in Thunder Bay.frank@frankpullia.com