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BPO market energised - More jobs coming as operators expand

Published:Sunday | December 11, 2016 | 12:00 AMNeville Graham
Odetta Rockhead Kerr, country manager of Sutherland Global Services.
Claude Duncan, vice president – investment at Jampro.

Sutherland Global will roll out two new call centre operations in six months.

But in alignment with the type of energy now flowing through the business processing outsourcing or BPO sector, the industry-preferred identity, the country manager for Sutherland, Odetta Rockhead Kerr, is pushing to cut the timetable for commissioning those new seats in half, having used up all her available capacity at three locations.

Seats to the BPO sector means jobs for the economy. And right now the BPO sector accounts for approximately 22,000 pay cheques. That's 80-90 per cent more jobs than the market was delivering two years ago, according to Jampro.

The investment promotion agency now projects that the BPO sector will double those jobs in three years to 44,000, numbers that are premised on the ongoing expansions under way by players like Sutherland, but also the investment prospects that Jamaica is wooing.

The BPO jobs have largely been focused in Kingston and Montego Bay, the two main cities, but some investors are also looking inland to set up shop.

JAMPRO's Vice-president of Investment Promotion Claude Duncan says that in the last "two years or so", the BPO sector has grown from about 12,000 jobs to 22,000 today.

"By the year 2020, we'd like to double the industry - that would take us to about 44,000. I would go further and say that in five years, we should be at about 100,000," Duncan said.

Jamaica has been chasing a target of 50,000 jobs for the sector since the 1990s, but falls short every time.

However, Rockhead Kerr, who is laying the infrastructure to more than double her work pool, believes Jampro's current industry estimate - specifically, its lower range - is way too conservative an outlook.

"Double is extremely conservative for the potential of the industry," said the Sutherland Global head. "Speaking specifically of Sutherland, we are at 4,000, which we were able to achieve in four years; we have as our goal to grow to 10,000. The only thing preventing us from doing that at the moment is just space," Rockhead Kerr said.

Sutherland has call centre operations in New Kingston and at UWI, Mona.

"We now have a third building, which is the largest one to date, which has been full for the last six months. We're now looking at two additional buildings to launch - one in Kingston, the other in Mandeville," said Rockhead Kerr.

"That should be in another six months, but three months, if I have it my way," she said.

After the expansion, Sutherland will have five centres - three in Kingston and two in Mandeville.

Duncan also rolled off a list of other BPO companies that have been expanding, among them Xerox, Sutherland, Hindusa Global, Alarica, Startec and IBEX, to back up his projection for new jobs.

"We can also couple that with those that we are courting who will come in, hopefully like the destination, and then expand from there," he said.

Pressed to quantify the total investment that will come with the expansion, the Jampro VP was cautious, saying he could only offer a rough calculation based on industry standards. His estimate totalled US$320 million (J$41 billion). He puts real estate and infrastructure costs for the 22,000 seats at about US$100 million; while BPO industry costs to outfit one station could run another US$10,000, assuming 100 square feet per employee, which would mean another US$220 million.

Duncan is not thinking about space constraints at the moment. He sees a rich mining field for the BPO sector due to Jamaica's geographic location, language, time zones and, most of all, an available pool of labour.

"The ability for us to scale will be based on our ability to continue to keep providing good human capital; because the players themselves will continue to grow as long as they can find people that have the talent to do what they want to do," he said.

He is dismissing talk that the growth in the BPO sector is only related to typical "call centre work", saying BPO has evolved into a full portfolio of services, both voice and non-voice, that utilises skills such as ICT, engineering and accounting.

Remuneration for BPO workers varies between operators.

"They generally structure their pay schemes around a base and then a mix of incentives, but rates range between US$3 and US$6 an hour," Duncan said.

Two of the BPO operators polled by Gleaner Business are paying $250 per hour for trainees, and $350 to $450 per hour for seasoned staff, with further incentives in some cases. The pay for seasoned staff is equivalent to US$2.70 to US$3.50 per hour at current conversion rates.

"One of the things that we say when we're marketing Jamaica is that almost everybody does accounting. That is true for the type of training and orientation that we do from when our students are in high school. We say to prospective investors that we have the raw material that you can train up to do the more complex work," Duncan said of the diversification in the sector.

Jampro is trying to have Jamaica branded as a BPO investment destination, but is making limited progress, saying the country is a victim of its own success in tourism.

"We at JAMPRO continue to lean heavily on the marketing and sales side by really getting our name out there as an outsourcing destination. The truth is that while in Jamaica there may be some amount of mindshare or awareness about the industry, there is a whole world out there that needs to get the message," Duncan said.

"The tourism brand overshadows everything else, so we have to work that much harder in terms of branding and awareness and being everywhere at the right time."

Tourism is a top earner of foreign exchange for Jamaica and a top employer directly through the hospitality sector and indirectly through industry linkages.

There is as yet no clear picture of the BPO market's economic value. Duncan says such discussion would be highly speculative, as BPO operators are not keen on disclosing contract values due to client confidentiality.

However, he reasons that remuneration alone points to significant value.

In the typical BPO set-up there is a supervisor for every 10 line staff, who is paid around US$25,000 per year, he said, adding that five supervisors will report to a line manager, and up to three line managers will report to an account manager, who earns upwards of US$60,000 per year.