Many US companies are rethinking their plans to outsource to Canada, not due in any part to concerns over quality or location. Rather, the ever-increasing value of the Canadian currency is raising both wages and property overheads. Currency fluctuations are something that no industry player can control, but it will be a major challenge for Canadian outsourcers to maintain and lure US investment going forward.
There are two other compelling reasons as to why contact center outsourcing in Canada is likely to slow.
One of the most important requirements of US investors in customer care relates to English and Spanish fluency, especially considering the enormous growth in the Hispanic-American community’s size and purchasing power. Unfortunately, in Canada, the ability to source sizable volumes of agents that are fluent in commercial Spanish is limited, at best. Given current population trends, it is unlikely that this will change in the near future, and will have to be addressed by Canadian vendors looking to increase US market share.
Another problem facing Canada is its level of maturity in the contact center space. Not only have traditional locations amenable to customer care such as the Maritimes appreciated in labor and property costs, so too have the larger cities such as Montreal, Toronto, Ottawa, Calgary, Edmonton and Vancouver. In fact, some US cities are now less expensive from a commercial rent perspective that some major Canadian centers.
Despite this, Datamonitor estimates that outsourced contact center agent positions (APs) in Canada will rise from 29,000 today to nearly 35,000 by 2010, and it appears that there is still excellent potential in the Canadian contact center outsourcing market.
Outsourcers with operations in Canada need to effectively target their resources at the higher-end of the US customer care market. This means looking to serve clients where the need for up sell/cross sell or outbound calling is paramount. It also means leaving the more administrative and commoditized work to other offshore locations.
Another recommendation is that outsourcers seek smaller urban centers where lower wages and property costs were the norm, as well an increased focus on the Canadian domestic market, which is heating up quickly in conjunction with ever-increasing economic growth.
Canada as a contact center market is mature, but has a tremendous amount to offer investors. While rising costs and higher currency costs are an irritant for US-based firms, the close proximity and common commercial culture are sure winners.
