Revenue will continue to decline as businesses offshore their call centre operations
Los Angeles, CA (PRWEB) April 04, 2013
In the five years to 2013, IBISWorld estimates that revenue for the Telemarketing and Call Centres industry will decline at an average rate of 3.0% per year, including a decline of 0.9% in 2013 to $2.5 billion. The industry experienced strong growth during the late 1990s through the mid-2000s. The industry thrived as US companies looked to Canadian call centre operators to provide outsourced customer service at a fraction of the wage costs companies would need to pay US workers. Unfortunately for Canadian call centres, the rising value of commodities has driven the value of the Canadian dollar to parity with the US dollar, says IBISWorld industry analyst Kevin Culbert. Growth across the mining sector has also caused wages to rise, forcing industry employers wage their wages to retain staff. As such, the cost advantage that Canadian call centres once offered to US companies is no longer in place. Furthermore, some companies have offshored their Canadian operations to overseas locations that have a high English proficiency but lower wage costs. As a result of these factors, industry operators have reduced the size of their Canadian operations. Major player Convergys, for example, closed its Winnipeg call centre in late 2009 and reduced its employee headcount by 500 people.
The industry has also had to contend with a changing regulatory landscape. In September 2008, the Radio-television and Telecommunications Commission (CRTC) implemented the National Do Not Call List (NDNCL). Rising regulation, increased wage costs and falling demand have all hurt industry profit margins during the past five years, continue Culbert. Declining profit and offshoring have caused some industry operators to be acquired or leave the industry altogether. Consequently, IBISWorld estimates the number of firms operating in the Telemarketing and Call Centres industry to decline at an average rate of 1.8% to 796 companies in the five years to 2013.
The industry has a low level of market share concentration. Its largest operators are Teleperformance SA and Convergys Corporation in 2013. Among companies with employees, 53.1% have a workforce of fewer than 20 people, while only 20.1% employ 100 people or more. Concentration has remained relatively steady over the past five years, and will likely remain fragmented and maintain its low concentration over the next five years. In the five years to 2018, the industry will suffer from the continued movement of call centre operations back to the United States. In spite of falling revenue, improvements in communications technology and an increased focus on efficiency are expected to marginally increase industry profit. For more information, visit IBISWorld’s Telemarketing and Call Centres in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry employs personnel to answer phone calls and relay messages to clients. Companies also provide telemarketing services on a contract or fee basis. Telemarketers use phones or e-mail to promote clients’ products or services, take orders, solicit contributions or provide information on behalf of clients. Call centres provide phone-based service and assistance to customers of clients. Firms in this industry do not own the product or provide the service that they represent.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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