Editorial | Towards high-end BPOs
This is the approach to which Richard Byles alluded in September when he spoke, to the ire of the sector's honchos, about lifting the quality of business processing outsourcing (BPO) jobs in Jamaica. In a way, it's a little like the future catching up to the past.
Our reference is to Tuesday's formal launch by the Jamaican arm of auditing-consulting firm KPMG of a subsidiary called Jamaica Extended Support Services, or JESS, to provide services - from accounting and human resource analytics to market development - to one of its global partners, KPMG of the United States.
"It is a shared service centre," KPMG Jamaica's managing partner R. Tarun Handa said of JESS, which has been in development for two years.
"So our return on investment is more in terms of quality and efficiency and value-added rather than hard-core."
What we understand from Mr Handa's remarks is that JESS will make its money by providing some, and perhaps even all, of the services acquired by KPMG America, which it will outsource to Jamaica. Which makes sense to either side.
This means that the US operation can become more competitive in bidding for global jobs, knowing that it can hand-off portions of the work to Jamaica, at a lower cost without compromising quality. For while the accountants, auditors, and management specialists likely to be hired by KPMG Jamaica will, we expect, be as qualified, and competent, as their global counterparts and that their skills will push them into the island's top income brackets, their remuneration, given comparative market rates, could be as much as 50 per cent lower than their international partners.
In the end, though, if this works, more people will get, in the context of Jamaica, very well-paid jobs. Indeed, according to Mr Handa, KPMG Jamaica's knowledge outsourcing operation will, within a year, more than double its employees to 250 and to over 800 by 2022.
Jamaica's BPOs already employ more than 32,000 people. That makes the sector important. Nonetheless, despite the bristling of its bosses when Mr Byles, in his September speech, articulated a larger vision for BPO jobs, and employment in Jamaica generally, most of those workers are at the lower rung of service provision. They are not engaged in the sophisticated service delivery of the type that JESS has been established to provide.
As Mr Byles said, the aim must be to have a BPO industry, "where lawyers are given a part, where accountants are doing work, (and) paramedics are, giving legal advice". In this regard, especially in the auditing-consultancy side of the operation, we might have expected Jamaica, had it maintained its trajectory, to have been much further along.
More than three decades ago, in 1986, when Richard Downer and his team from PricewaterhouseCoopers Jamaica structured, and executed, the Government's divestment of a portion of its ownership of National Commercial Bank (NCB), their approach to the IPO gained global attention, especially after it was analysed by the business review of a major American university. One result was that PwC Jamaica was recruited by its American partner to help in divestment projects in emerging markets, including in the Middle East.
That momentum wasn't maintained. But with its surfeit of lawyers and accountants, it would make sense for Jamaica to transform itself into the legal and accounting-auditing back office of the Caribbean and elsewhere. Medicine is another sector that seems ripe for this approach.
But for Jamaica to maximise the potential from high-level employment via BPOs, the labour and education ministries need to work in tandem with other agencies of Government and the private sector to help determine global market/job and business trends, and education and training requirements.