Advocates urge for changes to subsidies
include graphic designers, software programmers, bankers and even realtors — are all at risk.
For decades, Canadian companies have relocated their call centres and information technology services to countries such as India or the Philippines, where workers handling phone lines earn a fraction of that of their North American counterparts.
But the pool of offshore-able workers has widened during the pandemic to include an array of other routine work that makes “pretty much everyone working remotely vulnerable,” according to Levitt.
The findings should be a warning to workers who have grown comfortable staying home, he said. Pandemic-era studies have shown that most employees prefer remote work at least part of the time.
“Watch what you wish for, because the company might find someone just as qualified and educated, but in another country where they can be hired at half the price,” he said.
But offshoring may happen regardless of whether a worker wants to go into the office or not, said Bea Bruske, president of the Canadian Labour Congress.
“Employees were forced to work remotely during the pandemic, whether we liked it or not, and companies realize it’s easier than ever now to send that work offshore,” she said, adding the onus should be on governments to ensure Canadian companies are keeping jobs within the country.
Federal programs have helped keep Canadians employed during COVID-19.
The Canada Emergency Wage Subsidy (CEWS), for instance, incentivized companies to keep Canadian employees on board by covering a portion of their salaries.
But Bruske said the government should have set requirements for companies to keep employees in Canada in exchange for subsidies.
“What frustrates us in the labour movement is that many of those companies looking to move work offshore have been recipients of government subsidies — whether that’s wage subsidies or rent subsidies or low-interest loans or emergency financing,” Bruske said.
“None of those supports, which amount to billions of dollars, include any restrictions on companies sending work abroad. There’s no requirement that those companies maintain employment levels in Canada.”
Companies are at their most desperate to find savings in the aftermath of a bruising recession. A recent study from Modus Research found that most businesses surveyed said they have survived the pandemic by cutting costs wherever possible and accepting government subsidies.
That has resulted in sweeping worker layoffs, furloughs and a drop in output over the past 18 months.
Consulting firms have largely touted outsourcing as one of the best ways to cut expenses without eliminating production.
“The process allows (businesses) to build a team of skilled professionals without adding the expense of full-time employees and additional office space and equipment,” reads a recent note from Deloitte.
“From sales to recruitment to operations, outsourcing provides an unlimited amount of opportunities to help your business work smarter.”
The wage differences between Canada and some countries in South Asia or Central America are stark, making offshoring a difficult prospect to resist, said Richard Powers, a professor at the University of Toronto’s Rotman School of Management.
While a call centre worker in Ontario earns a minimum of $14.35 an hour, a worker in India earns on average $0.35 (Canadian), a worker in the Philippines $1.65, and a worker in Bangladesh $0.11. In some countries, hourly wages can go even lower in regions without strong enforcement from local authorities.
Businesses seeking to offshore their work typically recruit consulting firms that help procure quotes from contractors in other countries and compare salary costs.
“In most businesses, salaries are the largest cost. So if they know they can get workers in India to do the same job, at the same quality, then that is going to be quite attractive to them,” Powers said.
The prospect of losing jobs has drawn the ire of politicians. At a Bay Street event in October, Conservative party Leader Erin O’Toole told the Canadian Club of Toronto, “Too much power is in the hands of corporate and financial elites who are happy to outsource jobs abroad.”
“It is now expected of a shareholder to ask a CEO: ‘Why are we paying a worker in Oshawa $30 an hour when we could be paying a worker in China 50 cents an hour?’ And while that shareholder gets richer, Canada gets poorer.”
But there is little stopping the trend from accelerating, and Powers said an increasing reliance on remote technology will only encourage offshoring.
“At this point, I don’t think any sector is totally immune to this, because we’ve all learned to work remotely. Any office position is up for grabs — doesn’t matter the department,” he said.