Former economic driver slams into high dollar, booming mining sector
When you think of someone working at a call centre, the tendency is to picture someone in a cubicle, wearing headphones and talking to someone far away while they stare at a computer screen.
That wasn’t Rik Elliot’s experience. Elliot, who worked at TeleTech in Sudbury for 11 years, says he got to travel the world, heading to exotic lands to train new workers.
The company announced July 23 it will close its local office at the Rainbow Centre mall in October, putting 218 people out of work. But when TeleTech opened in Sudbury in 1999, they employed as many as 750 people, offering relatively high-paying jobs with benefits for a city that desperately needed them.
Elliot remembers working at a hectic pace, having to learn what was required for new “programs” – the industry term for business contracts with new clients – within a few days, and then heading out internationally to train people.
“I spent almost three months in Buenos Aries, between the two trips,” Elliot said July 26. “I spent a couple of months in Mexico City. I spent time in Hollywood and Burbank, Calif., New York City, the Philippines.”
The early years after TeleTech opened were heady ones, Elliot said. He and a few other former trainers got together recently for a few drinks and “laughed their faces off” recalling those days.
“Early on, they didn’t spare any expense,” he said. “They would fly us first class. My ticket to Argentina that first time was $12,000. Money was no object. We were told to tip 20 per cent, which was kind of cool.
“I learned and trained people on 34 programs while I was there, mostly in the first six years. At one point, I was learning five or six programs a year, and then training people on them.”
But he could see the writing on the wall as the years passed, with the company keeping a careful eye on the value of the U.S. dollar in comparison to where they had call centres.
“We were at a dinner once in Argentina, and we got a call from one of the vice-presidents saying not to order the wine,” Elliot said. “And it was because of a fluctuation in the value of the U.S. dollar.
“So, as time went on, the wages were clawed back, the benefits were clawed back ...”
As the Canadian dollar crept up in value, and Sudbury’s unemployment rate fell as the mining industry recovered, the booming call centre industry in Sudbury was affected.
When TeleTech opened in Sudbury in 1999, Sudbury's jobless rate was at 10.2 per cent, compared with the Ontario’s average of 6.4 per cent. And the dollar was below 70 cents US.
Today, the city’s jobless rate is below seven per cent and the dollar is at par with the greenback. Both factors spelled doom for certain types of call centres.
Susan Arledge, whose company, Arledge Partners, specializes in helping businesses find communities to operate their call centres, said places like Sudbury can still attract such facilities, but the conditions have to be right.
For example, TYSYS, a financial services company, recently opened in the Southridge Mall, employing about 50 people right now, with a potential of hiring another 250 over time.
“I know that they’ve been very happy with their labour force,” Arledge said. “And I know the issue with them was that they needed a lot of French-speaking labour.”
However, to attract the low-cost centres that came to Sudbury at the turn of the century, Arledge said labour availability and expenses are the two deciding factors.
“Typically, when a company is doing a site search for a call centre, they’re looking for a community that has availability of labour, and a community where they can sustain that labour force,” she said. “They want to be sure that once they go through the initial hiring process, they haven’t exhausted the labour force.
“So if the unemployment rate is lower, if they are having a harder time competing for employees, that could absolutely affect their decision to stay or continue operations.
“Ten or eight years ago, a lot of companies flocked to Canada. But now that the dollar is about equal, there’s not a huge financial driver to locate there. Now there has to be other reasons.”
Jeanna Blatt, a TeleTech spokesperson, said as far as she knew, the value of the dollar wasn’t a factor in the company’s decision.
“But I can’t provide you with much detail,” she said, on why TeleTech decided to close, citing client confidentiality.
“I can tell you that businesses are evolving and changing, and there are a variety of reasons why the decision was made to cease operations.”
She said the company will officially close its Sudbury office in December, but the last three contracts will wind up in October and only a handful of workers will stay on after that.
J.M. Chenier, a business development officer with the City of Greater Sudbury, said while the local industry has shrunk — it was the third-largest employer in the city at its peak — it’s still a major job creator.
“There’s over 1,000 people who work in that sector now,” Chenier said July 26. “At its peak, there were upwards of 2,500 people working in that industry, and that would be about five years ago.”
The largest single call centre today is the facility run by Canadian Blood Services, which he said employs roughly 250 people. But the loss of TeleTech shows how fast the industry adapts to new market conditions.
“I can tell you that (job losses in the call centre industry) hasn’t been exclusive to Sudbury,” Chenier said. “In the last few years, we’ve seen closures all over. TeleTech’s operations in northern Ontario have been winding down.
“Whether it’s the rising dollar, or the cyclical nature of the industry, I couldn’t say for sure. But certainly when the contact centre industry started growing in northern Ontario in the late 1990s and early 2000s, we had a 65-cent dollar.
"So there has been a changing business environment. And Sudbury’s economy is hot right now, and that will affect the ability of any industry to employ people. It causes more competition for labour.”
In a press release July 26, Mayor Marianne Matichuk said it’s important to keep the job losses in perspective.
“With more than $6 billion in planned investment in Greater Sudbury over the next few years, there will be thousands of jobs in construction, mining supply and service and in health care, to say nothing of retail and other service industries,” Matichuk said in the release. “It’s sad to see people out of work through no fault of their own … There will be small setbacks, but there will be much bigger steps forward.
“Greater Sudbury is poised for a sustained economic boom, with lots of employment and investment opportunities to come … Looking ahead, we must focus on these opportunities and on the kind of community we want to build together through these good times.”
For his part, Elliot said it was clear as the years went on that TeleTech was having a tougher time in the city.
“It was expensive for them to operate in the mall here in Sudbury,” he said. “Our wages were pretty high, compared with the Philippines or Argentina or Costa Rica.”
And while he didn’t leave on the best of terms, Elliot looks back on his time there with fondness.
“A lot of people walked away bitter, but I didn’t,” he said. “I was actually pretty grateful. How many clowns like me get to go to places like Argentina and Mexico on the company’s dime?”
Posted by Arron Pickard