Customer interaction is changing – and it will have a profound implication on our economy

My blog to be published later this week in the G&M Economy Lab talks about the potential implications of the Internet and how it will negatively impact employment in Canada.  If you look just at the sector of the economy where the outsourced call centre jobs are categorized (NAICS 5614), employment has declined by more than 32,000 across Canada just since 2007.  Now much of this decline is due to the “do not call list” but the broader trend of Web-based customer interaction is potentially far more influential in the longer term.

 

Employment Trend: Business Support Services (NAICS 5614) – Canada Wide

Source: Statistics Canada Table 281-0024.


The number of these outsourcing telephone call centres picked around 2008 and has dropped since.  From 2008 to 2011, there was a drop of more than 160 of these estalbishments across Canada with declines in all provinces except nova Scotia.  Ontario lost 73 of these establishments.


 

Number of Telephone Call Centres in Canada (NAICS 56142)

Source: Canadian Business Patterns.  Statistics Canada.

There are easily 3.5 million jobs in Canada that are based in large part on the telephone.  That is just among non-professional occupations.  Of course all these jobs are not going to disappear over night and in fact many of them have been increasing in recent years.  However, in the medium to long term the Web is going to displace a large chunk of these jobs and replace them with Web copy writers, Web designers, etc.

 

Selected Non-Professional Customer Interaction Jobs (2006) – Canada wide

Source: 2006 Census.

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2 Responses to Customer interaction is changing – and it will have a profound implication on our economy

  1. Jack Ready says:

    Here in Kamloops BC, we had a Convergys call centre which at its peak, employed 1200 people, who were paid a bit more than the minimum wage. During the past few years, employment declined and it eventually closed completely about 2 years ago.

    I believe the owners relocated most of the operations to the Phillipines, where the same work can be done for a lot lower wage.
    While I was aware that Canada was losing manufacturing jobs to Asia, I was very surprised to learn that we are also losing “call centre” jobs.

    It’s a reminder that Canada continues to lose jobs to lower wage parts of the world, where a large population is willing and available.
    Thank goodness we still have our natural resources with their decent paying jobs.
    Jack

  2. Will says:

    Isn’t it because NB had a cost advantage for call centres (which can be done from anywhere) and now they’re being outsourced to India and other place? I call my client’s support line (Sun Life Financial) and the support staff were located in Ireland. We can’t rely on any jobs that can be done cheaper and remotely.

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