Canada Lures Telemarketers

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Teleservices companies weary of confronting restrictive legislative measures and a dwindling workforce in the United States are trekking north of the border to a more favorable climate.


Canada is courting U.S. companies with a variety of attractive incentives such as forgivable loans and tax breaks in an effort to invigorate its economy. Big-name firms, including Hewlett Packard, American Express, Federal Express, Gage Marketing Group, MCI, Xerox, the Bradford Exchange, Sitel and Zacson, are snapping at the bait and transforming Canada into a hotbed of call center activity.


"There is a significant amount of business opportunity that has come to Canada in the last two or three years," said Bob Smith, general manager for the call center market of Stentor, an Ottawa-based alliance of Canadian telecommunications companies. "And that's partly because of the availability of the well-trained workforce out here."


In the past few years, telemarketing companies have erected a bevy of call centers across the rural U.S. in their zeal to employ hard-working, small-town folks with neutral accents. Today, those companies are discovering that they have tapped out much of the labor force and must grapple with a U.S. unemployment rate dipping well below 5 percent. North of the border, however, the unemployment rate hovers around 9 percent.


"On one hand, the higher unemployment is a burden for our economy, and, on the other hand, it has been an advantage because we have more potential employees interested on a per capita basis," said Gwen McCauley, a call center consultant at The Productivity Group, Ottawa. "Because telemarketing is growing in Canada the same way that it is in the U.S., anywhere from 10 to 30 percent a year, it's a very dynamic part of our economy."


Last month, Gage Marketing Group, Minneapolis, opened a call center in Winnipeg that will provide employment for more than 225 Canadians over the next two years. The center will serve the Publishers Clearinghouse account and handle primarily inbound calls that pertain to the sweepstakes company's mailings.


"The U.S. unemployment rate is in the low fours, and the Minnesota unemployment rate is in the high twos. Winnipeg, at the time that we started discussions, was in the low eights," said Joe Thomas, president of the teleservices group at Gage. "We also like to have our call centers in an area in which people have somewhat of a neutral dialect, and Winnipeg takes care of that."


Many Canadian universities, recognizing that call centers are providing a steady influx of jobs for young people, are offering courses on call center management. Students are encouraged to view teleservices as a career rather than a short-term job. Consequently, Canadian teleservices representatives tend to keep their jobs for about three years - a comfort to U.S. companies who often experience a churn rate of 100 percent annually.


"People often only look at staffing these call centers for the immediate future and don't consider where the agents are going to come from two or three years down the road," said Sandy Freeman, a call center consultant at The Productivity Group. "Our education is being designed in such a way that we will be turning out skilled agents, so we will not tap out as quickly."


Canadians are more likely to know a second language and, consequently, are more capable to support a company's strategy for global expansion. More than 60 languages, including French and English, can be heard throughout Canada.


"To give you an example, Vancouver has a 40 percent Asian population, and Toronto has the second-largest Greek speaking population outside of Greece," Freeman noted.


U.S. companies can take advantage of the stronger U.S. dollar, which is more than 40 percent higher in Canada. In addition, since Canada's telemarketing industry is self regulated, it operates free of the strict legislation that U.S. telemarketers face.


And, according to Freeman, telemarketing is viewed more positively in Canada than in the U.S.


"Canada has decided that this is a very professional way of doing business," she noted, "so telemarketing is treated at a very high level."
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