Atul Vashistha of Neo Group and Steve Rudderham of Capgemini with Mark Pfeiffer and Henri Sas of Teleperformance at Nexus 2012

By Jon Tonti

Teleperformance, the customer care and technical support giant with over 135,000 employees worldwide and almost $3 billion dollars in revenues in 2011, took home the Foundations for the Future Impact Award presented at Nearshore Nexus. Teleperformance bested a competitive field of applicants in part because of its exceptional ability to transform the company’s corporate social responsibility efforts into community based grassroots campaigns with sustained local support. For companies in the Nearshore industry benchmarking their Corporate Social responsibility (CSR) program against that of Teleperformance, get ready to push the limits of CSR strategy.

The archaic criticism that CSR distracts a profit driven business has long since lost out to the Creating Shared Value model which accepts corporate success and social welfare of the local community as interdependent. The Foundations for the Future Award, born out of collaboration between Nearshore Executive Alliance and Nearshore Americas, aims to raise awareness about the important influence of CSR in the Latam outsourcing industry. “Corporate Social Responsibility is increasing in its global recognition and value, so with the award we (Nearshore Executive Alliance and Neashore Americas) want to drive that awareness throughout the Latam region to an even greater extent,” says Steve Rudderham, Vice President of Global Transition at Capgemini and main organizer of the award.

Employee Engagement: Key Factor

The approach of Teleperformance’s CSR initiatives precisely designed for the communities which they target and launched in conjunction with local organizations and employees seemed to nudge Teleperformance past other finalists Johnson and Johnson, Neoris, and Transactel all with very impressive CSR programs. “We looked for a much greater impact on the Nearshore environment. We are impressed by how engaged Teleperformance employees are in their CSR efforts and how Teleperformance develops grassroots campaigns that also focus on building the future workforce,” revealed Atul Vashishta, Founder and Chairman of Neo Group and author of several books including Outsourcing Wisdom.

The award focused on the three areas of impact, environmental, community, and sustainability. Teleperformance was well positioned with two distinct prongs to its CSR program Citizens of the World (COTW) and Citizens of the Planet (COTP) formally launched in 2006 and 2008 respectively. Teleperformance seeks a holistic approach with COTW, efforts range from just making sure infants and children survive to adulthood to programs that help those same adults climb the career ladder. “We want to enable impoverished individuals to reach their potential and self-actualize,” Mark Pfeiffer says casually as if catapulting an impoverished individual to the top of Maslow’s Hierarchy of Needs were some small task. Citizens of the Planet has received recognition for a particular aspect of the program; Teleperformance measures the carbon footprint of its employees in all of its 49 countries of operation.

When asked about the importance of measuring the carbon footprint of each employee Pfeiffer mention that “it is part of an education effort that touches suppliers, employees, and landlords. We are trying to influence pertinent audiences because the impact extends every which way. If the target audience is employees for example, their families can attend the education session.” Pfeiffer stressed the importance of integration of employees into a company’s CSR efforts, “The employees volunteer beyond their core job functions and it allows them to take on leadership roles. It increases respect among employees, reduces attrition, and localizes the CSR effort. It almost brings tears to your eyes because you are so proud of them.”

What surprised Nearshore Americas most was what Vashishta had to say about the impact that CSR may have on buy-side players in the near future. “As of right now it is probably a 5% factor for a buy-side player, but it is on the rise and I think it may become a 20% factor within five years’ time.”

Impact on Competitiveness

Firms like our finalists are careful not to flaunt their impressive CSR records and they know it is not just a nice thing to do and instead the right thing to do, but is anybody taking notice and does it really make an impact on a firms competitiveness? Vashishta, a 20 year outsourcing professional veteran has noted the changing CSR influence, “Employees care about companies that care; companies with strong CSR attract better employees and reduce attrition. Governments also care and the working relationship of a foreign firm and the government where that firm does business can be facilitated by robust CSR efforts.” What surprised Nearshore Americas most was what Vashishta had to say about the impact that CSR may have on buy-side players in the near future. “As of right now it is probably a 5% factor for a buy-side player, but it is on the rise and I think it may become a 20% factor within five years’ time.”

Why? Vashishta and other experts we talk to affirm that good (and increasingly pragmatic) CSR operations are increasingly focused on workforce development that directly impacts the long-term viability of a Nearshore site. This important CSR works with the local government and institutions in the target region to make sure local high schools and colleges are graduating prepared workers so companies can spend less on basic training. It also makes continuing education available so workers careers don’t stagnate and they can move on to fill more diversified and higher valued added jobs and brings those from the lowest economic strata into lower-level BPO jobs so wages rates for those lower level jobs remain sustainable for buyers.

The deadline for nominations is March 15

Hundreds of IT/ BPO and call center operators in Latin America and the Caribbean are making a profound impact on the daily lives of local citizens in the region through a whole range of socially-conscious ventures. The new “Foundations for the Future” Award is designed to highlight the very important work done in business sustainability, the environment and within the community of your organization. (More information on F4F is here.)

We call on providers, investment agencies and business parks to submit nominations and bring due attention to your social impact programs. The award winner will be announced during an evening reception taking place at Nearshore Nexus 2012 in New York City.

Participation is the award program is complete free and nominations can be made on this page. The deadline to submit your nomination is March 15.

Foundations for the Future is a newly formed venture launched by the Nearshore Executive Alliance, in partnership with Nearshore Americas. To learn more about NEA, visit the group’s homepage.

With remarkably little ‘fine print” and a simple mandate to identify the most influential executives on the Americas outsourcing scene today, the team at Nearshore Americas has opened nominations for the 2011 Power 50 Ranking. For those ready to dive right in, follow this link which will land you on the nomination page where you can  nominate yourself or a colleague. There is no charge to participate.

For the first time, Nearshore Americas has enlisted a set of top industry experts to act as judges. They include Nicolo Gligo, former Executive Director, CORFO USA; Kirk Laughlin, Founder of Nearshore Americas;  Chris Nuttall, advisory expert at PA Consulting;  John Parkinson, a Global Sourcing  SVP at Axis Capital; and Pablo Velasco, a consultant at TPI.

The popularity of the 2010 Power 50 drove traffic on Nearshore Americas to record-breaking levels and captured strong participation and enthusiasm from all across the Western Hemisphere. A total of 16 countries were represented on the final list.

We strongly encourage participation from all sectors of the Nearshore/Latin America outsourcing community. Criteria for evaluation, outlined on the nomination page, includes the candidate’s record of personal achievement, commitment to raising industry standards and also the level of engagement the person has shown in driving visibility and thought leadership in the evolving Nearshore community.

Deadline for nominations is July 30, 2011. We look forward to hearing from you!

Hira: "The power elite in both parties buy into the notion that offshoring is a good thing"

By Patrick Haller

Abuse of visas, fraud investigations, allegations of treason and the pressures – fair or not – put on politicians to ‘protect’ US jobs from going offshore were some of the topics we addressed in an interview recently with Dr. Ron Hira, a well-known detractor of offshoring and someone who has testified before Congress on the topic.

As campaigning for the 2012 presidency revs up, and the after-burn of the financial crisis still plagues US industry, Dr. Hira, an Assistant Professor of Public Policy at Rochester Institute of Technology, calls for more of a ‘managed’ approach to offshore outsourcing so the brunt of the impact is not borne by US workers.

NSAM: What effect have the H-1B and L-1 visas had on the outsourcing industry?

Hira: We have to go back five years when we were at a stage where there was a rush for H-1Bs and the quotas got filled up quickly. This in no longer the case. Companies like Infosys and Cognizant had to plan around the quota. Over the last year and a half there has been increased scrutiny of visas and applications and higher rejection rates. And the US economy has been in the doldrums, and it has been easier for companies to find American workers. Some tech companies use H-1B as “body shopping” or “job shopping.” There have also been increased civil and criminal probes into applications. This has had a chilling effect. There has never been a cap on L-1 visas, the scrutiny is on L-1B, the special knowledge visas. Now there is a higher supply and lower demand. The shortage is much more than it was during the great recession.

The problem during 2000-2007 was that the US wasn’t creating the jobs as they used to. My estimate is we are short about 17 or 18 million jobs on the macro level.  There have been some high-profile cases where Patni or Cognizant got civil fines but it is hard to say how widespread fraud is. In 2008 USCIS did a study by their fraud detection group and 1 in 5 visas were found to be either outright fraudulent or with technical violations. There is no scrutiny unless there is a whistle blower. The employer, not the employee, holds the visa. Then USCIS started doing site visits which spooked a lot of the employers. This was only on the H-1B.

The problem during 2000-2007 was that the US wasn’t creating the jobs as they used to. My estimate is we are short about 17 or 18 million jobs on the macro level.

NSAM: How has the international financial crises influenced corporate sourcing decisions?

Hira: I think the financial services companies were pretty cautious after they got the TARP bailout. Financial services are a big customer base for outsourcing. A lot of them pulled back to figure our what they were going to do, and were a little more cautious about sourcing decisions. US financial services companies are Offshoring more. After TARP was repaid, the services companies concentrated on cost savings even more than before the crisis. Even with the TARP there were no strings attached – Congress passed the Employ America Act restraining the TARP recipients from employing H-1Bs. This was more a signal than anything else and had more of a chilling effect. This seems to have subsided. The larger issue is that there is no data in terms of Offshoring. Obama ran on Offshoring, and in November 2010 he spoke about how Offshoring was a win-win game. The financial services companies have a lot of power. There is a reluctance of policymakers to address this issue in a serious way. No visibility; see no evil/hear no evil. Wachovia forced employees to train their foreign replacements while on TARP.

Obama ran on Offshoring, and in November 2010 he spoke about how Offshoring was a win-win game. The financial services companies have a lot of power. There is a reluctance of policymakers to address this issue in a serious way.

NSAM: In your opinion, are there any positives about offshore outsourcing?

Hira: Sure – it’s one of the fallacies of the debate – either good or bad. There are both positives and negatives. From a policy point of view – how do you manage so that it actually works for the American economy and American workers? Not a bad thing, it can be, it can harm workers and economy. When we shift capabilities to other places, that’s not trade, and it can have an adverse effect on the economy. It’s lower costs goods and service for American customers, some of that is captured by executives. As a global citizen I think it is great that emerging countries are benefiting from it. The way it is being managed now, all of the costs are being borne by American workers. And the lower cost goods and services don’t compensate for lost wages and jobs.

There is increased wage competition and instead of competing against someone locally, jobseekers are competing against people all over the world. That will have an effect on their bargaining capability. One of the big issues that people are trying to figure out on the US side is what jobs are “non-tradable” and will continue to require Americans? Alan Blinder at Princeton did a study that found a third of all the jobs in US are vulnerable.

(Editor’s Note: The sixth annual study on corporations’ offshoring trends was released in January 2011 by the Center for International Business Education and Research’s (CIBER) Offshoring Research Network (ORN) at Duke University’s Fuqua School of Business and The Conference Board. The report concluded that Outsourcing did not take away American jobs.)

NSAM: Has the federal government done anything about this?

Hira: Nothing is being done. The public discussion goes back to 2003 when Business Week had a cover story titled Is Your Job Next? Kerry ran on Offshoring. There has not been a single legislative act, and a little on the state level. The prior governor of Ohio said that none of the government procurement could be Offshore. You see little bits and pieces sometimes.

NSAM: Why is that?

Hira: The frame of reference people have. The power elite in both parties buy into the notion that Offshoring is a good thing. And equate it with corporate profits – if corporate profits do well, America will do well. There are minorities in both parties questioning this. There was a buy American provision in the stimulus act to buy steel and iron, that is the place where you saw some political muscle. The domestic steel industry fought for it. It’s not that corporations believe ideologically in Free Trade, they do it because it benefits them. The companies are quite happy about what is going on.

NSAM: What dangers do Free Trade Agreements pose for US jobs?

Hira: The trade agreements don’t have a lot to do with white collar or call centers. There you see the labor unions in the manufactured goods industries, an area that does have potential impact is the visas. In the case of India, and similarly Brazil, they view short-term visas as a trade issue, not an immigration issue. They have been proposing a Services Visa under the WTO called the General Agreement on Trade and Services – GATS. It is unlikely that agenda will move anytime soon. This also shows how important political organizations play in all of this; 93% of private sector workers are not represented by trade unions. No one is representing white-collar workers in Washington.

Most of it is pretty unconstrained, although Senator Charles Schumer proposed a tax or tariff on any call center call that is answered offshore. That didn’t go anywhere. Part of the dynamic is that these are “US companies” doing this. US trade reps have been trading away visas for better access into those markets. From the point of view of India or Brazil and others they have low-cost, high-skilled workers. Any kind of visa restriction is a non-tariff barrier to trade.

NSAM: How big of an issue will Outsourcing be in the 2012 election?

Hira: It is very tough to see what is going to happen there. I think if you did a pole, the American public would say they are very concerned about it, but not many politicians have picked-up on it. There is no social movement, no political movement. There is a divide between elites and populists – this is a populist issue. They know this is a problem, but are not sure what to do about it.

NSAM: Is Outsourcing gaining momentum or slowing down?

Hira: Gaining momentum. It’s not anywhere close to saturation, there is more price competition in certain fields like IT. Xerox is going to re-batch some employees of HCL. Ursula Burns, the current CEO of Xerox, is the co-chair of Obama’s Export Council and the Jobs and Competitiveness Council. Some people say that the only thing she knows how to export are jobs.

NSAM: Some consider offshore outsourcing to be treasonous. What is your opinion?

Hira: I’m not going to pass a moral judgment. There needs to be an incentive structure. In 2004 Kerry made a big deal about Outsourcing when he called CEOs Benedict Arnolds. Look at incentive structures and how firms are making decisions – use both carrots and sticks – benefit shareholders, economy and workers. There is no silver bullet – lots of little and big things that can be done.

NSAM: What do you think about Rural Sourcing?

Hira: It will always be a niche. The government should be incentivising that with training grants and tax abatements. There are a lot of unemployed people with a high skill set.

NSAM: We interviewed Professor Carlos Baradello, Associate Dean of Corporate and International Programs at the University of San Francisco who contends that when people are unemployed long enough, they will compromise and relocate for lower wages. What is your opinion?

Hira: There are factors such as geography and family connections. One thing the government could do is look at how you make Buffalo more attractive than Arkansas.  It is possible, but I don’t know if the numbers add up and how much of a differential there is between Buffalo and Arkansas.

NSAM: What is being done to “repatriate” jobs to the US?

Hira: Nothing. The Obama folks have been touting an export initiative. If you actually look at trade deficit we run a deficit that has been growing. Obama has been reluctant to talk about import substitutions, and is concentrating on the Win the Future initiative to push new technologies and new industries, rather than grabbing a market share of current technologies. It is the same narrative we got in the 1980s – back then the new stuff was IT and created a lot of jobs. This time it is nano, biotech, and green tech. It’s not clear if it will create a lot of jobs. There hasn’t been a serious discussion about trade and jobs. To just look at exports and not imports is bizarre.

NSAM: Can Rural Sourcing be seen as a sign of protectionism?

Hira: Protectionism is a complicated word. Is it protectionist if a country puts in a tax holiday for exports? Isn’t that a reverse tariff? The language is difficult to disentangle. In the US the larger debate is if we should have an industrial policy or not. We have always had one. The whole purpose of the stimulus package was to stimulate employment, and if that leaks offshore – what have you done?

NSAM: How does BPO contribute to the creation of a worldwide stable growth economy?

Hira: The problem is if the companies don’t reinvest and keep American workers on board, they are substituting American workers for foreign workers. Could have a positive effect in that you have increased economic activity elsewhere. But that’s playing the labor arbitrage game. Look at IBM and how they grew in India from 6,000 to 200,000 employees between 2000-2011. The largest workforce is in India. This is clearly substituting.

NSAM: Can Outsourcing have a lasting positive effect on local and global communities, and by default, the US? For example, the work Capgemeni does in Guatemala.

Hira: I think it’s been a huge catalyst for the Indian economy where there are lots of different socio-economic classes. Lots of developing countries have a new model. They realize the can go into high-end services right away. There are both positive and negative effects; it depends on what the US government does. These folks who have new wealth and income – are they buying products made in the US? If you look at the trade deficit this is not the case. Andy Grove, the Chairman of Intel, took to task this narrative that we have in Washington that the US can do the high-level design stuff and the designers will do well, and then offshore the manufacturing. The problem with that narrative is that design services are being outsourced, you still need to scale-up jobs.

NSAM: Has your book, Outsourcing America: What’s Behind Our National Crisis And How We Can Reclaim American Jobs, influenced public policy?  If so, what changes have been, or are being, made?

Hira: I have testified before Congress and also worked for the House Sciences Committee. It hasn’t had the effect Tom Friedman’s book (The World is Flat) has but it has had some impact.  It’s a pretty tough hill to climb because the established view of the world is that they buy into what I call the Apple I-Pad narrative where something is designed in California but made in China. 

Capgemini and Coca-Cola Enterprises Team Up to Do Great Work – Outside of the Office

Read the complete Capgemini story on Guatemala social initiatives in a new 18-page Ebook

By Dennis Barker

The popular image of big corporations in the U.S.A. these days is not exactly bright and shiny. Wall Street shenanigans; a massive oil spill caused by ineptitude; an unemployment rate of 10 percent, minimum — coupled with outsourcing of jobs; and financial fears all contribute to a national mood that does not smile upon the captains of industry.

In fact, when a corporation does try to do good, through a social responsibility program, you can easily find skeptics who say the only motivation is to polish up a tarnished image.

We can be as skeptical as anyone else here at Nearshore Americas, but recently we came across a story that could defrost even the cold, black heart of this reporter.

The story begins a few years ago in Guatemala. A woman named Arlaine Cervantes had experienced a moment of epiphany where she realized it’s time to do something other than “run around in the same circle and make money.” She had fallen in love with Guatemala, renowned for its natural beauty but one of the poorest countries in Latin America. She describes the situation of the native Mayans as “bleak.” Many children were orphaned by the civil war, many live in remote villages without basic necessities and no education — “without any sense of purpose or hope.”

Even crusty curmudgeons who don’t care about “green IT” or sustainability should find this Guatemalan tale inspiring.

Cervantes came up with an idea: Build a kids camp where children could learn and be mentored, could have fun, and most important, could realize they can change their lives and their communities. That idea became a dream — Ninos del Lago — which became a reality that is now taking shape in the forest overlooking Guatemala’s Lake Atitlan.

But that reality, Cervantes told us, could not have happened without the considerable assistance of a couple of execs from Capgemini’s BPO group, Capgemini employees in Guatemala City, and their client, Coca-Cola. There was corporate financial support, and Capgemini staff have volunteered time and sweat (and their own money) to help carve the camp site out of the woods.

“A brighter future” for Guatemala’s poorest kids is one of the goals of Niños del Lago. For Capgemini, it’s a chance to “give something back,” says David Poole, who heads up the company’s BPO operations in the Americas. “We benefit from leveraging the talent pool in Guatemala. By supporting Niños del Lago and their effort to keep the most underprivileged children in the education system … we help protect the future prosperity of the community in which they live.”

You can read more about the Niños del Lago story in this new ebook that describes ways businesses can contribute to their local community, as well as implement practices that contribute to the health of the planet. Even crusty curmudgeons who don’t care about “green IT” or sustainability should find this Guatemalan tale inspiring.

SOURCE: TOPNEWS

A recent study by the International Labour Organization (ILO) showed that outsourcing services like in call centres, accountancy and even medicinal practices, have led to getting good jobs done in terms of payment and number of working hours in poor and developing countries.

This study, published as a book on Monday, also found out that such a kind of outsourcing industry, even though gave good quality of services, could also decrease the staff turnover in the country by a huge rate.

The study also covered that such outsourcing of work has produced what are called “cyber-coolies” or “electronic sweatshops”, which has rendered the services in poor and developing countries into good quality.

These jobs are even better in terms of wage and working conditions, as compared to the local standards of the same.

The two biggest outsourcing markets are India and the Philippines, while Brazil and Argentina centres of South America are still in the process of growing.

Source: Wharton

Different parts of the world use corporate social responsibility (CSR) in different ways. In the U.S., it’s often synonymous with corporate philanthropy; in Europe, it’s more likely to be associated with how socially responsible the day-to-day management of a company is. In Latin America? Expectations run higher.

Its home-grown multinationals (MNCs) — as well as governments and general public — view CSR as a way to reduce poverty and address other pressing social issues across the region, while ultimately improving the sustainability of companies, asserts Lourdes Casanova in a published paper written with fellow Insead academic, Anne Dumas, titled, “Corporate Social Responsibility and Latin American Multinationals: Is Poverty a Business Issue?” Recently published in Universia Business Review, the paper raises questions about whether the region’s home-grown MNCs are indeed able to run successful businesses while improving the lives of the under-privileged. In an interview with Universia Knowledge@Wharton, Casanova — who is also the author of a 2009 book titled, Global Latinas: Latin America’s Emerging Multinationals — shares her thoughts on the subject.

The following are edited extracts of the conversation.

Universia Knowledge@Wharton: How long have Latin American multinationals been practicing CSR? What are the main differences between them and multinationals from other parts of the world?

Lourdes Casanova: The founders of Latin American companies, [some dating as far back as 100 years], have been committed to the development of their local economies. They wanted to — and, in fact, managed to — contribute to the technological progress of their countries and, at the same time, improve the lives of less-fortunate citizens. The concept that we now call CSR is something more recent. It has its origins in the 1990s, when companies such as Body Shop, Ben & Jerry’s and Shell saw a need to [formalize and articulate] what their CSR activities aim to do. In the current phase, the concept is expanding in developed societies that have fewer social problems than emerging societies. The multinationals are “exporting” this concept to emerging nations.

The question I address in my article is whether we need different ways to measure the social commitment of companies that operate in societies with higher rates of poverty and social inequality. Like the people who live in the markets where they operate, these companies must make a commitment to be part of the solution to the social problems.

Between 1990 and 2007, the percentage of people living on less than US$1.25 a day declined 12% and the number of people in extreme poverty — that is, on less than US$1 a day — fell 9.1%. Yet despite the fact that Latin America’s economic growth has significantly cut poverty rates, there are still more than 180 million poor people in the region. Because of the economic crisis, the number of poor people increased by 12 million in 2009. Why are the region’s governments failing to combat this? What are these countries doing to alleviate poverty and social inequality?

Studies show that economic growth is related to the reduction of poverty. This correlation is obvious in China and, to a lesser degree, in India. Although the percentage of poor people declined after 1980 in Latin America, there are more poor people in the region today in absolute numbers than there were 30 years ago. This is a tremendous failure. There is a clear need for policies aimed specifically at reducing poverty. If we set aside the ethical dimensions for a moment — which, of course, we should not — the growth of any society is based on internal and external consumption. In an economy that relies heavily on its service sectors, prosperity comes when people can, for example, afford to buy a house and have a mortgage, access to the Internet and take a vacation. We have to combine the efforts of civil society, governments and the private sector to reduce extreme poverty once and for all.

Brazil wants to achieve this by 2016, when it hosts the Olympic Games. The Brazilian government announced that it wants to reduce poverty to 5% by that date. The idea is to create a special fund with the revenues generated from the recent offshore oil discoveries, including the deposits in the Tupí area.

Universia Knowledge@Wharton: What are the most notable initiatives when it comes to CSR in Latin America?

Casanova: One of the leading CSR companies is Petrobrás, the [semi-state-owned] Brazilian oil company. It committed itself to working with the government’s “Zero Hunger” plan (www.fomezero.gov.br), which was set up in 2003 to eradicate hunger and extreme poverty and encompasses a number of different programs, including “Family Purse.” Thanks to the latter program, 11 million people each receive around US$44 a month, which enables children to go to school and have periodic health check-ups. Petrobrás collaborates with non-government organizations in every area of education, health, housing and efforts to improve living conditions in the favelas (the marginal neighborhoods in urban areas).

Ten years ago, Cemex, the Mexican cement company, launched an initiative to provide micro-loans to families on low incomes so they can renovate their homes and provides them with free advice as well as construction materials at fixed prices. Almost 200,000 families have received US$70 million of loans. With that money, the company is helping to reduce the housing shortage — estimated to be some four million units — which affects one in every four Mexicans.

Fortunately, these are not the only cases. Another company is Grupo Bimbo, the Mexican multinational food company. Bimbo has always been very concerned about the wellbeing of its staff and getting involved in CSR was a natural extension of that. It has also partnered with FinComun, a provider of community financial services, to offer loans to the country’s small shops. Some 80% of Bimbo’s revenues come from such establishments and one-quarter of those customers need these loans. The loans are a way for the company to have a more secure and stable [supply] chain.

Another outstanding company is Brazil’s Natura Cosméticos. The company uses environmentally and natural methods to manufacture its beauty products, using materials that come from indigenous communities in the Amazon rain forest. Its business model has improved the lives of some 400,000 women by providing them with jobs.

Universia Knowledge@Wharton: What sectors do these initiatives target most often, and why?

Casanova: Education is one of Latin America’s unresolved issues. In particular, public primary and secondary education continues to be inferior. The region has excellent universities: TEC in Monterrey and ITAM in Mexico City; University of São Paulo and ITA, both in Brazil; University of the Andes in Colombia; Catholic University and Adolfo Ibáñez University in Chile; and University of San Andrés in Argentina are among the region’s many excellent universities. However, families have no choice other than to send their children to private schools so that they can attend the best universities.

For their part, companies [focusing on CSR] often need to set up their own educational centers to address the deficiencies in basic and technical education. The competition with China and India for cheap and unskilled labor was lost quite some time ago, so the region needs trained labor that contributes to innovation and development.

Universia Knowledge@Wharton: How has the crisis affected CSR policies in the region?

Casanova: Because of the crisis, companies in Europe and the United States have had to change their priorities. The urgency of survival trumped goals that were [merely] considered “important.” At a time when society is asking the financial sector to take responsibility for the crisis and companies should be expanding their commitment to society more than ever, some companies have delayed their CSR programs. In contrast, in emerging nations in general and Latin America in particular, the environment is optimistic, and I see a strengthening of corporate commitment to society. Managers want to be part of the solution, and they are renewing their fight to improve conditions in their countries. It’s worth remembering that the private sector, along with civil society, has said they are committed to reconstructing Chile after the recent earthquake.

Universia Knowledge@Wharton: What about foreign companies present in Latin America? How much have they committed to CSR?

Casanova: Multinational companies from Western countries often launch CSR policies in their countries of origin. Only during the second phase of their CSR program development do they extend the policies to subsidiaries in Africa or Latin America. Each country has its idiosyncrasies and adaptation makes sense. Nevertheless, society judges companies in a global way. Although Shell is one of the companies rated highest by organizations that evaluate CSR, the global press focus on the negative environmental consequences of its operations in Nigeria, putting the company’s image is at risk worldwide.

Latin America has a key role to play in [contributing to] the revenues and profits of Spanish multinationals. At a time when nationalism is growing in the region, companies emerging as winners will be those that get most involved with the social and economic development of the continent. Banco Santander, with its support of universities [through Universia, the portal of Latin American universities sponsoring this site], and Telefónica Foundation, with [the Spanish teleco's] Proniño social program aimed at eradicating child labor, have been the pioneers. The penetration rate of banking services and the use of broadband and mobile applications are both tied to GDP growth, and thus, the reduction of poverty. The altruistic initiatives reflect the interest of these companies in increasing their business activity in the region.

Universia Knowledge@Wharton: How do you see CSR evolving in Latin America? Should Latin American multinationals play a more active role in solving problems such as poverty and social inequality?

Casanova: Today, social problems are a concern for every government in the region. From Mexico’s “Opportunities” program to “Family Purse” in Brazil, every country has its own state-funded programs for assisting underprivileged people…. Without a doubt, companies and ordinary citizens must be involved in solving serious problems that require the collaboration of every social participant if they are to be resolved.

Universia Knowledge@Wharton: What benefits would companies get from such activities?

Casanova: The service sector accounts for more than two-thirds of Latin America’s GDP. Beyond improving their own image, companies in that sector will increase their profits as the purchasing power of Latin Americans improves and by expanding the middle class, which is responsible for the prosperity and stability of every country.

By Kirk Laughlin

A key part of our mission at Nearshore Americas is to create a more visible platform to highlight the work sourcing providers and their customers are doing in the area of corporate social responsibility. Although CSR may seem to have little to do with our core business-oriented coverage of the exploding Nearshore sourcing industry, we believe discussing CSR activities on a regular basis will be an appropriate reminder and powerful symbol of the kind of commitment companies are making in local and regional societies across the Americas.

Our role – and hopefully this is pretty apparent by now – is to get accurate information out to the world and particularly to US sourcing customers about what is really going on in this market. Those of us in the Nearshore sourcing industry continue to hear countless myths and misinterpretations about this market, so we’re always going to be here to get the story right and paint the most accurate picture possible.

Part of telling an accurate story includes highlighting the strong alliances outsourcing providers are establishing to help people in need. By exposing these activities we hope to contribute to breaking down any lingering perception that sourcing providers are solely in these locations to strip the local economies of good talent and operate in a bubble without regard to the needs of local communities.

In the majority of instances, we know this to be flat out false. I’ve had discussions in the last few weeks with many major companies about CSR in Latin America – including TCS, Capgemini, Sitel, and Teleperformance (mentioned below). These companies are in no way engaged in CSR to get a pat of the back or seek international acclaim. They are taking on projects quietly, and often anonymously, knowing that they have the resources to help out and it’s just the right thing to do.

Many of these organizations engage in these activities because it’s part of a corporate operating philosophy.  “The activities really give us a sense of a global bond in our corporate family… we come together in a time of need,” says Jenny Rodriquez, Teleperformance’s director of corporate social responsibility for the Americas and Asia Pacific.

Teleperformance conducts CSR programs around a three part goal, driven by philanthropy (community), environment and people care, says Mark Pheiffer,  Executive Vice President at Teleperformance , who is a key CSR leader at the global contact conter/BPO organization. He notes that significant energy is put into the company’s Citizen of the World program created to focus on underprivileged infants and children in 49 countries around the world. In each of the countries, a Teleperformance coordinator manages and administers to the program.

Specifically in Latin America, Teleperformance staffers in Latin America have recently been involved in these projects:

• Argentina collaborates with different charities (Techo para mi Pais, Fundacion Equidad & Banco de Alimento) that focus on improving the well-being of infants and children.

• Brazil has a strong commitment to Social Responsibility and encourages employees to volunteer their time to cooperate with local institutions to benefit the community.

• Chile has partnered with “Maria Ayuda” to aid abused and mistreated orphans in Santiago.

• El Salvador participates in the payroll deduction program to benefit “Libros de Amor” which focuses on preventing children’s malnutrition all over the country.

• Mexico is sponsoring via the payroll deduction program “Un Kilo de Ayuda” which prevents malnutrition in children less than 5 years old and pregnant women, in rural and indigenous countries.

Working on CSR initatives and interested in sharing your story with Nearshore Americas? Keep us posted. (kirk@nextcoastmedia.com) We want to hear about it.

SOURCE: PODER

He’s tied with Bill Gates for the title of the richest man on the planet. Carlos Slim Helú is perhaps the most famous—or infamous—man in Mexico. Yet few Americans have heard of him, let alone have much idea about the nature of his corporate empire, or how he created it.

For a portrait of this portly, 70-year-old son of Lebanese immigrants, there are a variety of popular opinions to draw from. On the one hand he’s the brilliant businessman and telephone tycoon poised to eclipse Gates on the Forbes list of the world’s most wealthy. Others see him as an opportunistic robber baron and crass monopolist who made his fortune thanks to political favors and weak government regulation. Lately, he has re-tooled his image, highlighting his humble immigrant roots and supposedly modest lifestyle, while also posing as a philanthropist alongside celebrities, from Bill Clinton to Colombian pop singer Shakira and Nobel Peace Prize winner Mohammad Yunus.

Measuring the reach of his business interests is no easy task. He is said to own as many as 220 companies. Despite his reputation for micro-managing it’s likely even he doesn’t known the full extent of his holdings. But today, the very size of his empire may have become his biggest problem, placing his operations under an intense glare. In a country where 40 percent of the people live in poverty and thousands emigrate each year to look for better-paying jobs in the U.S., Slim has become a symbol of how economic growth is being held back by a lack of competition.

“He’s proven himself to be one the smartest businessmen in Mexico’s entire history,” says Eduardo Garcia, editor of Mexican magazine Sentido Común, which monitors Slim’s fortune and regularly updates the public. “It’s just that he has too much power for the good of the country.”

To Slim’s 218,000 employees he is known simply as El ingeniero, an old-fashioned Latin American title

meaning, literally, “engineer,” commonly used to show respect for the elite of university graduates. To others he is Don Carlos. In government circles he’s known as Señor PIB, or Mr. GDP (Gross Domestic Product), a reference to the awe his name arouses in the minds of officials when they consider the extraordinary economic weight of his companies, which account for more than a third of the capitalization on the Mexican stock exchange.

The foundation of his empire is the phone company Telmex (Telefonos de Mexico) which he bought in 1990, and which owns 80 percent of the country’s 18.2 million fixed phone lines. Slim also controls Telcel, a unit of his América Móvil network, which has about 74 percent of the country’s 64.6 million mobile users and is the world’s fifth-largest cellphone company with 124 million customers in 15 countries. In the United States, he controls Tracfone, a pre-paid cellphone company that claims 12.4 million customers.

His major Mexican holdings, Inbursa Financial Group and the Carso Group, cover a mind-boggling range of services from banking to construction, hotels, mining, oil drilling, highways, healthcare, a low-cost airline, a cigarette manufacturer, and much valuable real estate in the heart of Mexico City’s colonial downtown.

Beyond Mexico, his telecom investments stretch the length and breadth of the Americas. The Slim family is also Saks’ biggest shareholder, with 17.4 percent of the U.S. company’s shares. He also held a major stake in now-bankrupt Circuit City, as well as the telecom giant Global Crossing, and a 1 percent stake in Citigroup.

In 2008, Slim purchased stock that gave him a 6.9 percent ownership stake in The New York Times Company. Last year he helped bail out the struggling newspaper with a $250 million loan, giving Slim 15.9 million shares and making him the company’s largest creditor, as well as one of its largest stockholders.

As his wealth rises and he attracts more international attention, Slim has poured billions into a previously neglected aspect of his businesses: corporate social responsibility. “There is tremendous social pressure to give back to the country that has given him so much,” Garcia says.

In 2007 he announced plans to pump one-fifth of his fortune into philanthropy. Various charities, mostly cultural, educational or health-oriented, have benefited. He created his own healthcare foundation while also pouring money into the restoration and redevelopment of the old colonial center of Mexico City, as well as making large donations to the Clinton Global Initiative and to the Alas Foundation, created by Shakira. That has won him favorable press in many quarters.

However, his critics remain unconvinced. “It all looks like a deliberate PR strategy to bolster his public image,” says Denise Dresser, a leading political scientist at the prestigious Autonomous Mexican Institute of Technology (ITAM). Slim barely hides his disdain for charity, she notes, highlighting comments he made to The New Yorker magazine last year. “I don’t believe in charities too much,” he was quoted as saying. “They can make you popular… but you don’t solve any problems.”

Slim has also publicly scoffed at Bill Gates and Warren Buffett for “going around like Santa Claus” trying to cure society’s ills. “Poverty isn’t solved with donations,” he said at the unveiling of his own $450 million foundation for health research and care. Building businesses and creating jobs is his preferred solution.

“One must take him at his word,” says Dresser. “His incursion into the world of philanthropy pretty much espouses that view.”

But, others say Slim’s philanthropy owes at least part of its origins to the 1999 death of his wife, Soumaya Domit de Slim from kidney disease. He quietly began funding hospitals and a kidney transplant center. That evolved into educational scholarships through the Telmex Foundation. “I think Mr Slim’s philanthropy is in large part a personal decision that has opened his eyes to new horizons,” says Jorge Villalobos, 59, director of the Mexican Center for Philanthropy.

He hopes that Slim’s example could help build a stronger culture of giving in Mexico, which has a huge equality gap, yet only a fraction of the charities in the U.S. For centuries Mexicans have looked to the Roman Catholic Church as the fount of all charity, and civil society has only emerged more recently as an alternative.

Mexico also has no estate tax, so there is no incentive to divest large fortunes to charity, making Slim’s generosity all the more notable. “In the end Mr. Slim’s motives aren’t what’s important,” said Villalobos. “What matters more is that he is putting it into practice, which enriches everyone.”

To be sure, Slim’s new philanthropic push comes in the wake of a number of recent reports that pointed an embarrassing finger at the lack of competition and anti-trust legislation in Mexico. Slim defends himself saying his companies are no different than other big corporations such as Microsoft, Walmart, and Boeing who also dominate competitors in their markets.

But analysts roll their eyes at the very suggestion that there is any similarity between the competitive business climate in Mexico and the U.S. They point to the 1990 sale of Telmex, a former state monopoly. Critics say Slim acquired the prized franchise under dubious circumstances. Since then he has grown Telmex using what many consider to be unfair trading practices, with the protection of the Mexican government, effectively turning what was once the state’s monopoly into a private one.

Last year the World Bank published a book, No Growth without Equity?, warning that special interest groups in Mexico enjoyed a quasi-monopoly over key economic areas such as telecommunications and the oil and gas industry, and were an obstacle to creating a more efficient and productive economy. Furthermore, those groups had deliberately frustrated attempts to introduce competition, the book claimed, by exercising undue influence over Mexico’s weak government institutions.

The book closely examined a series of regulatory decisions since Telmex was privatized in 1990. Regulators allowed Telmex to keep prices high and protected it from competitors, wrote Rafael del Villar, a former official in the communications and transport ministry who recently was named to Mexico’s Federal Telecommunications Commission (COFETEL). “Telmex has exercised its substantial market power unchecked,” he concluded.

Roger G. Noll, an economics professor at Stanford University, also argued that Mexico’s telecommunications industry has been held back as a result, pointing out that fewer Mexicans have access to fixed lines or broadband Internet access than residents in similar countries. “Competition is hampered … by limitations to the authority of the primary regulator, COFETEL, by an opaque, secretive, and cumbersome regulatory process; and by an inadequate oversight system,” he wrote.

The Organization for Economic Cooperation and Development (OECD) said in March that Mexico should implement network unbundling rules and lift restrictions on foreign investment to boost competition in its telecommunications industry, to allow more competition with Telmex. “There is a lack of competition, particularly in broadband, here in Mexico. And because of that prices are going to be higher and speeds are going to be lower,” OECD economist Taylor Reynolds said at a Mexico City press conference.

The key to Telmex’s success are the high interconnection fees the company charges to calls entering Mexico, as well as calls within the country that are made to its clients from competing companies. But Telmex argues that its rates are cost-based and that its own studies show Mexico’s telecommunications fees are similar to those of other countries.

But times may be changing. The government of President Felipe Calderón has shown greater willingness than its predecessors to foster more competition in telecommunications. COFETEL announced plans in January to auction new wireless 1.9GHz and 1.7GHz bands for fixed and mobile telecommunications services, as well as consolidate the number of local service areas with a view to lowering domestic long-distance fees.

The move is expected to bring new competition to the mobile market. Also digital cable operators in Mexico, such as Cablevision, were recently allowed to operate telephone services, though they still have only a small share of the market.

COFETEL recently obliged Telmex to start connecting to Cablevision and was not allowed to set any preconditions for connection. COFETEL said in late October it will start two new investigations into Telmex’s dominance, only the second time in a decade that the federal watchdog will probe the company.

Slim’s ambitions now sit at a crossroads. Telmex is facing tougher competition at home and lost ground on the stock exchange last year. América Móvil is also in a hemisphere-wide battle with Spain’s Telefónica.

Telmex is now seeking a license to operate TV services, giving it the keys to what is known in the telecom business as “the triple play”—telephone, TV and Internet. Without it, Telmex cannot compete with Televisa (owners of PODER magazine) in the fast-growing new media field of cellphone technology.

Slim clearly understands the direction digital technology is headed. “It’s the nervous system of the new society,” Slim told Maria Bartiromo in a recent interview for CNBC, noting that cellphones now had 85 penetration of Latin America, while also predicting that two-thirds of Latin America would have broadband coverage in the next five years.

Mexican regulators are supposedly digging in their heels this time, in their effort to get Slim to lower his connectivity fees to internationally acceptable rates.

“[Regulators] have a great card up their sleeve,” says Garcia at Sentido Común. “As long as [Slim] is misbehaving they are not going to give it to him. They are cracking down on him but he is still fighting every aspect of regulation.”

Garcia thinks Slim is making a mistake. Telmex recently teamed up with Dish Network to offer a TV service that can be charged to a telephone account. “That way he can offer the same service as his competitors, but he’s undermining his own tremendous network,” he adds, pointing out that Telmex’s regulatory problems prevented it from offering its own TV service direct to the company’s 18 million fixed line clients.

A lot is at stake. If Telmex gets its own cable services the network would enjoy such market penetration that it would likely gobble up exclusive rights to major channels, such as Discovery en Español and HBO en Español. Once again Slim’s monopoly would survive in an even more expanded form. “It’s all about managed competition,” says one former telecom executive. “That’s the key. That’s what he wants, because that way he can control everything.”

Analysts wonder if COFETEL has the means to stand up to Slim. The ruling National Action Party (PAN) is facing tough elections and likely won’t risk losing Slim’s economic support.

Slim also understands the industry better than the regulators—one of the trademarks of his success. “There is no capacity in COFETEL or the Secretary of Communications and Transport, as they are not experts in the sector,” says one analyst. “The main problem is that the state has not decided what kind of telecom system it wants in the country. Slim never loses an opportunity to take advantage. That’s how he stays ahead.”

By Karina Cuevas

A large part of the Dominican Republic call center industry has stepped up in a wide variety of ways to help alleviate the terrible suffering in Haiti.

Many of the institutions began collecting monetary donations internally through their employees, while others have obtained in-kind goods to deliver in Haiti. “Right after the earthquake, a high sense of corporate responsibility kicked in,” said Kemil Carbuccia, Sales and Marketing Manager for Nearshore Call Center Services. We always try to contribute because there is a willingness to help the people in need.”

Nearshore Call Center Services has already made three trips to the devastated nation and is planning on a fourth one within the next two weeks. Employees have delivered medicine, food and clothing to various sectors in Haiti and despite their well intentioned efforts; it does not seem like enough.

“At the beginning it was traffic and logistics [that made it difficult to get to Haiti],” said Carbuccia. Everyone wants to help, but it’s hard to organize and try to get everyone what they need.”

A client company of Nearshore is providing space for storage and thanks to contacts in Haiti; the goods are being delivered from one community to another in a somewhat efficient manner despite the lack of security engulfing the country.

Nightime More Desperate

“We have a structured plan, but it’s hard especially after 5 pm,” said Carbuccia. Most of the city does not have electricity and you’re driving blind. It’s a desperate situation and you want to continue to help, but you also want to be safe.”

In their recent trips to Haiti, Nearshore has taken a truck and two SUV’s full of non-perishable goods and medicine. With a team of ten employees and a Haitian guide, they have somewhat successfully delivered the donations, but find that the lack of visible help from the international community is hurting relief efforts.

“We saw UN and US trucks and they were only driving around the city, no interaction at all, nothing like stopping and soldiers coming out of trucks. There’s no organized effort from these organizations,” said Carbuccia. When you got to the hospital, doctors from Brazil, Canada, and Japan had some sense of organization. The American Red Cross did help people, but when you see the news and see the amount of people providing help you don’t see them driving around, I can guarantee that 100 percent.”

On the other hand, Stream, one of the main call centers in DR has been providing help in a more indirect manner through the DR Civil Defense. Corporate headquarters have opened a US$5,000 account for employees to make donations. With it they have bought over 10,000 bottles of water, thousands cans of food and medication to be taken to Haiti. Current amount in the account is undisclosed.

“This is a non stop job and we are working with five organizations to make sure all the people are receiving our aid,” said Emma Castro, Site Administrator for Stream. This is globally and our director in HR had a meeting with managers and decided how things were going to get done.”

Ongoing Commitment

Stream is designing more ways to provide help to the neighboring Haiti and in the meantime does not neglect its domestic efforts in the DR with Extreme Balance, a community based initiative that helps out in different capacities various sectors of the country.

“We have different ways to help out community, children and seniors through Extreme Balance,” said Castro. This isn’t the first time we provide humanitarian help.”

Another provider, STI Customer Care, decided to collect food, water and clothing plus US$7,000 for the family of one Haitian employee who lost some relatives in the earthquake.

“One of two of our employees traveled to Haiti in the aftermath of the earthquake, one of them went as a volunteer [we gave him a 30-day leave of absence since he’s will stay there until further notice],” said Mary Padilla, Call Center Manager for STI Customer Care. A Haitian national traveled with him to find out about her family in Port-au-Prince. She found her family alive on the Jimani border, but some distant relatives had died under the rubble.”

They have also participated in a blood donation drive organized by the American Red Cross for victims in Haiti.