| "Hello, Welcome to Air Canada," says the person on the other end of the phone line. She is about to help trace baggage gone missing on an Air Canada flight. She is not a unionized Air Canada employee, but a worker for WNS Global Systems. She talks over the phone from one of their call centres in either Mumbai or Pune.
As of January 2005, the financially troubled airline contracted out its lost baggage services to WNS and closed its Montreal call centre. Approximately 50 Canadian jobs were affected. That is, they transferred to other departments or bought out. The airline also closed its European reservation call centre in London, England in favour of the Indian call centres.
"WNS has extensive airline experience. What they are able to provide for us is service 24-7 in both official languages. Because they have extensive airline experience, they provide similar services to a number of airlines around the world," explains Air Canada spokesperson Angela Mah when asked for the lowdown. There’s also that thing about how Indians work for less.
This is outsourcing – or, in the jargon of contemporary business managers, BPO (business process outsourcing). Put simply, it is contracting out for services. With globalization, outsourcing now connotes moving clerical and office jobs overseas.
With the rise of the high-tech sector in Asia, companies in India and the Philippines started attracting multinational businesses with offers of computer programming, payroll accounting, help desk functions and telemarketing, among other services. Talking on the phone is becoming India’s leading industry. For instance, call the help desk for Denver software company Quark Inc. and you will get an Indian operator. Numerous other computer companies have followed suit and hired out their help desk and order desk jobs to Indian companies specializing in call-centre operations.
Why? They work cheap and long distance rates are at an all-time low. A dollar goes farther in India, thus major corporations can pay an educated Asian workforce 20 to 50 per cent of the wages of a North American doing the same job.
In recent years, BPO remained a subject confined to the newspaper business pages, until it became the major issue in the Telus labour dispute. But it has a history of creating controversy.
OUTSOURCING HISTORY
In the Canadian telecommunications industry, the issue first reached prominence during the Bell Canada strike of 1999. At issue in the month-long dispute was the company's plan to contract out 1,300 of its call-centre jobs to Nordia, a company co-owned by Bell and American company Excell Global Services. The jobs were not moved overseas, but they were contracted for half the price of unionized positions. Bell got its way in the end. In 2003, the process came full circle when Nordia voted to unionize. They are now represented by the United Steelworkers.
In a stranger use of cheap labour, Calgary company Call-Us-Info Inc. set up call centres in Fenbrook and Pittsburgh penitentiaries in Ontario. The inmates operated as pollsters and market researchers for clients on a budget. The prison call centres were shut down by Corrections Canada in 2002.
Outsourcing was the issue that had Telus and the Telecommunications Workers Union (TWU) in a deadlock for almost four months – it all had to do with Telus's purchase of a Philippine outsourcing company called Ambergris. One of the services it offers is call centre operations.
In an interview prior to the settlement, TWU spokesman Sid Shniad said the union was under the impression that the company was using Ambergris call centres before the work stoppage, but the company was denying it. "Then the union got some evidence that it submitted to the Canada Industrial Relations Board about the use of replacement workers during this dispute. And in response, Telus came public with an acknowledgement that they were indeed shipping work down there. The way they phrased their response though was not clear, or they kind of fudged whether it had been going on before," he says.
During the recent labour dispute, Telus also fielded work to an unnamed Indian call centre company.
"In the past the union has had jurisdictional control through the contract over a defined set of work," Shniad says, explaining the union's contention. "Without that contract language, that will no longer be the case. If they want to get rid of jobs, they don't have to lay off. If they choose they could buy somebody out of a job, but it means that down the road, that job could be done in India or the Philippines."
Telus vice-president of corporate affairs Drew McArthur was scheduled for an interview to explain the company's purchase of Ambergris, but he didn’t phone and didn’t return calls.
Telus's purchase of an Asian outsourcing company follows the actions of other western companies taking a stake in the foreign BPO industry. Taking a look at the major shareholders of WNS Global, the company with the Air Canada call-centre contracts, the controlling interest is held by the American investment equity company Warburg Pincus, and the second largest shareholder is British Airways. So, it makes sense that Air Canada and 17 other international airlines use WNS call-centre services – it is apparent the airline industry is centralizing some of its operations driven by a British Airways company.
IBM, after relying on India for its own outsourcing needs, purchased its third largest outsourcing company, Daksh, in 2004. General Electric also has major investments in Indian outsourcing firms, some of which it has sold to other North American investment firms. The list goes on.
It is now no longer Indians attracting foreign companies to use their services, but western capital funding the movement of these jobs overseas. |
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