inShare With English already mastered, how far can this curiously attractive nation go on the Latin America call center map?
(Part one of two part series) By Jeff Pappas
How many times have you traveled to a tropical paradise and said to yourself, “I am going to move here and open a bar”? Now, tell me how many times you traveled to a tropical paradise and said to yourself, “I am going to move here and open a call center.”Well, Transparent BPO chief executive officer Scott Newman did. While on a cruise that docked in Belize, he noticed that all of the individuals he met (both on the coast and in town) spoke English better than many of his agents in the U.S. Newman realized that Belize could be on the cusp of emerging as the next country to handle the needs of his U.S.-based customers.The business potential he saw in Belize — that little spot on the map just to the right of Guatemala and just below Mexico — was high, possibly higher than either of the bordering (and much larger) Central America countries. But why? Well, first you must keep in mind what U.S. third-party outsourcers require: high-quality, English-speaking labor. Not surprisingly, they require this in large quantities and, more important, with a low price tag.While the U.S. can no longer capitalize on low-cost labor expansion for growth, beyond our borders lies a world full of nations that can. Not only can — but are.
Take the case of El Salvador. For years the Central American nation has been attracting offshore companies such as Sykes and Stream.When the number of bilingual workers was at a minimum in El Salvador, the country reached out to Nicaragua for labor that could speak English fluently and serve U.S. customers. When the Nicaraguans realized that their quality labor was being siphoned by their neighbor, the government focused on developing a call center industry to cease the out-migration. Once Nicaragua started keeping their people, by bringing in companies like Sitel, they too started running out of quality bilingual labor. So Nicaragua reached out to Guatemala, which also had a fair-size labor force that spoke quality English.
Well, Guatemala saw opportunity and lured the likes of 24-7 and NCO to add to the already burgeoning local call industry created by GuateCall, BCC, and Transactel. Honduras took note of the potential “domino theory” and began recruiting heavily in the call center market to somehow cure their unemployment ails.
With all these Central American countries having been so successful in attracting outsourcers to increase the employment potential for their citizens, how can Belize hope to be the next in line and even surpass these other countries? Can a country the size of Belize supply and sustain bilingual workers over an extended period of time?
The English Advantage
Belize is one of the few countries in the world where English is the official language. And while Spanish also is widely spoken, all official government documents, deeds, and papers are in English. Belize can boast of being the only English-speaking country in the region where more than 50% of the population speaks a second language.
Multinational companies should focus specifically on the suitable talent supply for the job categories they need, rather than rely on the size of a country’s overall population. With regards to Belize, companies should size the labor supply based on the numbers of “English First” workers. Generally, the English-speaking portion of the Nicaraguan labor force will pale in comparison to the English-speaking portion of the Belize labor force. As a result, the availability of such bilingual labor could offer Belize the chance to play a role in the emerging global outsourcing market.
Outsourcing’s Revolving-Exit Door Problem
So, Belize would have an edge when it comes to the English capabilities of its workers. What about another major issue that outsourcing companies face all the time: loyal workers?
A majority of call centers are plagued with high attrition. Anyone who manages a call center knows that the attrition rate in the industry is a huge problem and always has been. According to some research data, the rate in the United States is 50%, nearly 35% in the U.K., and a whopping 80% in India. In Latin America, by contrast, attrition ranges from 10% to 25% for outsourced call centers, and about 5% for captive and shared service centers.
Staff turnover is more a characteristic of the type of business than of the geography or culture. In the U.S., call-center work is not highly paid (less true in Latin America) and attracts a mixed group of people: students, part-time workers, and those with few or no qualifications.
This is certainly not the case in Belize, where call-center staff may be well-qualified in their particular field but cannot get a better job in the local area. (In fact, the director of account maintenance at Transparent BPO in Belize is a university graduate with a degree in biology.) This career limitation tends to counter attrition problems. Furthermore, workers are attracted by the uniqueness of some of these new jobs, as well as the daytime working hours (given the time zone proximity to the States).
For instance, one call-center company in Belize has so little attrition (under 5% annually) that at the beginning of each year, they take the 4 or 5 lowest-performing agents and terminate their employment. This keeps the other agents honest. Unbelievable as that may seem, the company will hire better agents within 30 days and have them working on the floor within 30 days after that.
Belizeans Need IT Skills
Countries seeking to play a role in the emerging global labor market have been concentrating on improving the quality of their talent, not just the quantity of educated workers. Malcolm Sobers, BPO Industry Specialist with Beltraide (Belize Investment Promotion), says his country could unlock a potentially large labor supply by improving the skills of college graduates, particularly their computer skills.
“Since our primary and secondary education system offers all courses in English, our focus is less on language skills, more on computer skills. Offering Belizeans the opportunity to increase their technology knowledge would not only make Belize comparable to other Central American countries, but even give Belize the chance to surpass their BPO/ITO industry growth.”
Job candidates from Belize are well-educated but often lack a grounding in practical skills. One sobering statistic that makes a great case for business in Belize is that on average 5,000 students graduate annually from the Belize educational system, but only 20% of them have a remote chance of attaining a job. For every call center job opening in Belize, on average 24 applicants have an associates degree or higher.
Sobers said that many Belizeans who do have technological knowledge have attained it through personal training. With the increase of certified training centers, such as the Belize National ICT Center in Belmopan, the education level of the labor force will be enhanced, he said.
Other Central American countries have shown that to increase employment, enter the world of low-cost outsourcing. Belize has a lot more work to do to succeed in the that world. Progress is being made in that the government is starting to focus more on jobs.
I predict that the next 18 months will determine if Belize can provide one of the better offshoring and nearshoring platforms. In the end, the key will be if Belize can capitalize on the “Central America trifecta”: the necessary language, the abundance of talent, and the right cost.
For additional insight on my recent economic-analysis trip to Belize, feel free to contact me at firstname.lastname@example.org.
Jeff Pappas is the Executive Vice President of Arledge Partners Real Estate Group, in Dallas. Arledge Partners focuses on international site selection, labor analytic studies, incentive negotiations, and real estate identification and acquisition for the contact services/BPO industry.
January 10, 2013 at 6:42 am
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