Renting Our Children to Multinational Corporations

You certainly can’t accuse our provincial government of a lack of imagination when it comes to trying to convince us that they’re being innovative.

You’ll recall the casino that’s not a casino. Well now we’re to have a “call centre that’s not a call centre.” As Phil Taylor, director with AMVESCAP, took great pains to drive home this week at his company’s announcement thereof. From the CBC:

While the AMVESCAP office will consist of people taking phone calls and answering questions, Taylor said the operation would be a lot more sophisticated than what Atlantic Canadians have come to think of when they think of call centres… “This is really a client relations operation. So we would be dealing with sophisticated financial advisers, or our end clients, or the back office admin groups of our corporate clients, like, let’s say, RBC Dominion here in Canada.”

And from The Guardian:

The Global Enterprise Centre will not be a call centre, said Taylor. It will provide client relations with financial advisers, as well as act as a backup to its Toronto headquarters in the event of a weather or terrorism-related crisis.

Spin-decrypting lesson number one: watch carefully for what they claim it isn’t; that’s probably what it is. Earn bonus points if the obfuscation involves the word “global.”

Presumably the move to Prince Edward Island is related to AMVESCAP’s goal, stated in their 2005 Annual Report, to:

…decrease our operating expenses by approximately $120 million… [w]e expect 50% of the expense reduction to be realized in Compensation costs, with the remainder of the savings from decreases in Property and Office, Technology/telecommunications, and General and Administrative costs.

And therein lies the rub: whether it’s called a “Global Enterprise Centre” or an office for telephone-based “client relations with financial advisers” or a call centre doesn’t really matter: it will still suffer from the same “fair weather friend” nature of all such enterprises.

Everything’s rosy and revolutionary right now; until something better comes along, a more lucrative package from another desperate jurisdiction, or the market dips, or the parent company gets acquired and operations “consolidated.”

Ask the people in Austin, Texas where the Houston Business Journal reported in 2003 that “Downtrodden market forcing AIM to close Austin call center:”

Underscoring the extended bear market, mutual fund manager AIM Investments will slash its Austin staff by about 200 positions this year. AIM, a Houston-based unit of London financial services giant Amvescap PLC, plans to make the cuts when it shuts down an Austin call center operation by the end of this year, says AIM spokesman Ivy McLemore.

Or the people in Denver, where, in 2004 the Denver Post wrote this about Invesco, another Amvescap subsidiary:

At its peak in 2000, Invesco Funds Group was flush with 860 employees and $56 billion in assets under management. The company built a new headquarters in Denver for up to 2,000 workers. The next year, Invesco Funds was confident enough in its future to pay $120 million for naming and advertising rights at Denver’s new football stadium, Invesco Field at Mile High. “We’ve just begun our work,” Invesco Funds chief executive Mark Williamson said at the time. It turned out to be the beginning of the end… Invesco Funds Group operations here are now managed by an executive out of Louisville, Ky.

While tarted up call centre jobs have all the sheen of “high tech” jobs that provide what the Premier qualifies as “good job opportunities for post-secondary graduates,” they are jobs that exist at the pleasure of decision makers with interests that predominantly lie elsewhere. These are not sustainable jobs, and they add nothing to the “natural capital” of Prince Edward Island.

Remember the old days, when absentee landlords owned Prince Edward Island? Here’s how Britannica defines absentee ownership:

…originally, ownership of land by proprietors who did not reside on the land or cultivate it themselves but enjoyed income from it. The term absentee ownership has assumed a derogatory social connotation not inherent in its literal meaning, based on the assumption that absentee owners lack personal interest in and knowledge of their lands and tenants.

Substitute “our children” for “land” and the words ring more true today than ever.


Steven Garrity's picture
Steven Garrity on November 13, 2006 - 00:39 Permalink

Regarding your advice to “watch carefully for what they claim it isn

Harold Jarche's picture
Harold Jarche on November 13, 2006 - 02:51 Permalink

Give a man a job and you feed him for a year. Teach a man to create and you feed him for a lifetime.

Dear Canadian politicians: Jobs? We don’t need no stinkin’ jobs!

Call centres failed in NB because we never owned the means of production. We need to get away from the industrial age concept of jobs (aka indentured servitude). To do that, we need to start a heck of a lot more micro-businesses. As micro-loans are helping Bangladesh, so micro-businesses will help to bootstrap the Maritimes.

Nathan Mol's picture
Nathan Mol on November 13, 2006 - 06:19 Permalink

Does this subject ever hit home with me. I graduated with a BBA in May 2003 and tried to build a career and pay off debt at home, but finally caved and sold my soul to oil this April. I could rant for hours but here is my attempt to keep this short: this morning I read the Guardian article that focused on the economic spin-offs for downtown. I was at my office computer in Northeastern Alberta; 3500 km from my home in Charlottetown and 90 mins from the closest town — so my first reaction was to cheer with pride for the ‘home-team’(that particular article didn’t get into details on the nature of the jobs but did feature many ecstatic reactions from local officials). Then after reading this post I felt urge to slap myslef in the face for being naive enough to think that these jobs would be a relocation of Bay Street ‘movers and shakers’.

Here is my take: First, I agree whole-heartedly with Mr. Jarche; micro-business is the key to economic growth in Atlantic Canada. One and two person ‘location irrelevant’ businesses whose business networks and customers are global. On the bright side, there are a few positives out of this announcement; at least the jobs are downtown instead of the industrial park. Then there are the jobs themselves. There will not be 300 additional skilled business graduates moving to the Island. These jobs will, however, help PEI business graduates become “less under-employed”; instead of working in a job with limited advancement opportunities for 25K/year, we will now not have to leave for Moncton or Halifax to have the opportunity to work for 35000/year and moderate advancement opportunities. The spin-off effect of this might be a tightening of the labour pool to a point where the banks might increase there entry level salaries from $32K/year to $36K/year. Wow.

Four years of your life and $25 — $35K in debt. I also work for a multinational company. It employs approx 700 people at this site. Lowest annual salary: $82,000. That is for sweeping floors and collecting garbage (no insult intended — this is one of many jobs I have done in my life thus-far). Average salary is probably $150,000. I would estimate that I am one of maybe 30 with a university degree. What is the economic spin-off of these 700 people to the closest town (pop 20,000).

I guess if someone says they will try to keep it short, it probably means they won’t.

Ann's picture
Ann on November 13, 2006 - 14:26 Permalink

Here’s my question — not about this particular move, but about customer service in general. You are very big on customer service and always very impressed when someone answers your call quickly and efficiently. How would you see this happening without using call centres?
You seem to like them and loathe them at the same time.

Harold Jarche's picture
Harold Jarche on November 13, 2006 - 17:04 Permalink

Ann — My answer is stop outsourcing customer service, because in the long run, it fails. My own experience:

My problem was a result of customer service not being able to level with me and treat me as an individual — I was a protocol to be followed. In spite of my insistence that I had checked all wires and connections, I was initially told that the problem was at my end.

Even though customer service stated that they had no record of my July 2005 experience, I was able to show the date-stamped public record of my experience on my blog, thus giving my case more credibility.

The highly trained technical service staff are professional, knowledgeable and friendly. Customer service staff, who have the first contact with any problems, should be treated and trained in a similar manner as the technical staff.”

Ann's picture
Ann on November 13, 2006 - 19:20 Permalink

Thanks Harold.
But I was actually asking Peter.
I should have been clearer.

Peter Rukavina's picture
Peter Rukavina on November 13, 2006 - 19:25 Permalink

I’m not saying call centres are irrelevant (although I can imagine several ways in which they could be more humane — i.e. the JetBlue model). But I don’t think they’re the bedrock on which to build a sustainable economy.

Marian's picture
Marian on November 13, 2006 - 19:32 Permalink

I think that these are what Douglas Coupland called McJobs and the problem isn’t their existence, it’s their predominance.

oliver's picture
oliver on November 13, 2006 - 21:18 Permalink

If everybody at a company understood its product then they could all field calls from customers on a rotating or percentage basis. But a manufacturer-merchant-distributor of a complicated, failure prone or otherwise user-unfriendly product would be employing engineers for everything you need done (driving trucks, etc), which would be super-expensive and/or dissatisfy a lot of people who studied to be engineers. You could limit customer service duty to just the engineers you employ and have cheaper personnel tasks for everything that isn’t engineering or customer service, but that’s still more money for engineers than you’d be paying out if you only used them for engineering. You could save the cost of those extra engineer hours you’re directing to customer support by making very user-friendly products that rarely flustered your customers enough to call you, but you’d be incurring extra engineering cost in the more intensive design and testing you’d have to do before you put out a product. Phone support from call centers wouldn’t be so bad if companies were only using them because it’s most cost efficient to train the service people, but they do it because in the current economic culture it’s a safe way to cut corners, and so big investors are liable to continue to insist that any new venture use this scheme. To me this is one of those areas of customer protection that needs to be legislated and/or litigated (class action).

Peter (L)'s picture
Peter (L) on November 13, 2006 - 22:40 Permalink

Renting our Children? …..Ouch and brilliant! That could become an expression all to itself. Too bad that it is so easily understood in Atlantic Canada.

I guess you really took “AIM” at “Trimark”