The one mega-trend no one in NB is really talking about

I’ve been talking about this trend for almost a decade but when you read about New Brunswick’s economic ‘troubles’, this rarely shows up on anyone else’s radar.

It should.

In 2003, New Brunswick had 25,000 people employed in the administrative and support services sector (NAICS 561) or about 82 out of every 1,000 people employed across the province (8.2 percent).  In 2012, there were 17,440 persons working in that sector ( a 7,500 drop – in a small province like NB) or 56 per 1,000.

As you can see from the graph, before the call centre boom circa 1991, we had fewer people employed in this sector compared to the national average and then we boomed to nearly double by the early 2000s.  Now we are headed back down to the national average.

 

I would argue this trend is having a more profound impact on the overall employment situation in New Brunswick than any of the other usual suspects including public sector austerity.  7,500 private sector jobs in this province is huge.

When I raise this with my colleagues I get a nonchalant shrug.  I am told this is an inevitable trend.  The online world is eliminating the need for call centre workers.  Some say it is a good trend as we ‘didn’t want people working in that low wage sector anyway’.

You would prefer them unemployed or working in even lower wage sectors such as retail, personal services, etc.?

There are several points I would make on this issue:

1) Yes it is inevitable that this sector will employ less people over time.  But it should not be inevitable that New Brunswick would decline even faster than the country as a whole.

2) A number of managers have told me that it is far easier to recruit new Canadians into call centre positions in the Toronto area than in New Brunswick.  Once again, our approach to temporary foreign workers and immigration is dysfunctional.  We attract immigrants that can’t find work here but make very little effort to attract immigrants into available jobs.

3) The industry is moving online and we should be moving right along with it.  We should have social media experts working from NB.  We should be a national centre for online customer service.  Our universities should be R&D hubs for online customer interaction research.

It is shocking in some respects how we let that sector rise to 25,000 workers – and never gave much of a thought how we could leverage that into a longer term, durable sector for the province.  Now we are down to 17,400 and there is still almost no serious debate on how to move this sector forward.

Technical note: For those of you familiar with the SEPH survey, you will recall that NAICS 561 has multiple sub-sectors including office administrative services [5611], business support services [5614], investigation and security services [5616], services to buildings and dwellings [5617] and other support services [5619].  Telephone call centres are a segment of this sector.  It is also true that some of New Brunswick’s ‘call centres’ are likely being classified by Statistics Canada in other sectors such as finance and insurance.  This distorts our ability to  have a completely accurate picture of the change in overall ‘call centre’ employment.  Insurance employment, for example, has been rising in recent years.  However, NAICS 561 is a good proxy for the call centre industry (the best we have).

 

 

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2 Responses to The one mega-trend no one in NB is really talking about

  1. Yves Doucet says:

    Hi there! Very interesting analysis. While I am in no way an expert in either workforce statistics or economics, I am a bit of a numbers nerd :-) And I arrive at different conclusions than you. According to the numbers presented here, there were 7500 jobs lost in this sector, but 7500 jobs created OVERALL, which means other sectors created 14000 new jobs.

    From what I find, over that period, while the NB population increased only 0,2%, the number of jobs grew by about 2,1%. Or, to look at it another way, the % of the population that holds a job went up from 40,6% to 41,4%. I see these all as positive numbers.

    Am I wearing rose-coloured glasses? Maybe. I really don’t think everything is perfectly good, and we do need to refocus some of the province’s job-creating strategies. But the numbers presented in this post seem to indicate that we are moving away from a concentration of jobs in this sector which was anomalously higher than the rest of the country…

  2. mikel says:

    Very good analysis, but I’m not sure about your conclusions. First, you should really start naming names. WHO are these people you are talking to that are giving you these replies? Are these decision making people or just people you meet at Tim Hortons?

    But I’m not sure why you ASSUME that when call centres were located in the province that there WAS no effort to expand the industry. How exactly do you know this?

    The faster decline could be explained by a number of reasons, one of the main ones being the quality of the jobs in the first place. We don’t know exactly how many subsidies were available ‘back in the day’, so it could be that the province was overly generous with the subsidies, and the ‘worst’ kind of companies took advantage of that. When other areas started upping the ante, or the subsidy train finally ran out, they bolted. There really needs to be a more thorough analysis of the call centre industry in NB.

    Your thoughts on immigration may not be apt. First, is that HEARSAY you are going by? Managers can be VERY flippant about things like that. But the highest unemployment rates in NB also happen to be those with the lowest immigration, so I don’t think you can connect the two the way you are.

    Your number three almost could go without saying, but once again those are MARKET forces, not government. Are you saying that government should hire social media experts? As for universities, unfortunately its pretty hard to MAKE professors pick an area of expertise. And frankly, given the age of most of those profs, they are probably the LAST people I’d trust as experts.

    But overall you bring up a pretty important issue that definitely deserves more attention. That IS a big number, although I didn’t really follow the guy’s point above, not being a numbers nerd myself.

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