Nearshore Americas

As BPOs Report a Resurgence, Is Nicaragua in the Clear?

It went from being one of the safest destinations in Central America to unexpectedly chaotic and dangerous – stunning would-be investors and attracting significant global attention as a country mired in deep societal and political conflict.

Years of stability in Nicaragua were rocked when an unexpected uprising against the country’s government kicked off in April 2018, leaving hundreds dead and triggering a period of uncertainty.

Some Stay, Some Flee

The turmoil caused a number of BPO operators to reduce headcount or shut-down altogether. Concentrix, for example, reportedly slimmed down significantly during last 18 months, moving some of its workers from Nicaragua to operations established in Costa Rica. Other workers were reportedly laid-off. When asked this week about its Nicaragua strategy, Concentrix declined comment.

But despite the country suffering a sharp fall in foreign investment, some outsourcing providers – largely in customer care and services – are signaling their belief that conditions have improved considerably. BPO provider IBEX Global told Nearshore Americas that the nation is stronger than ever and plans to launch a second site in Managua this month.

Bob Dechant
Bob Dechant, CEO of  IBEX 

“We managed through the crisis and came out ten times stronger as a company through that,” Bob Dechant, the company’s CEO, says.

“In April 2018 the unrest hit and for four months it put some challenges in the ability to get people around town with the protests. We were able to navigate really well with that – putting people in hotels, helping our agents get to and from work,” Dechant reports. “Our clients are important so we are committed, and it would’ve been easy for them to pull out. ”

Dechant believes that approximately 3,000 agents positions were lost in the entire Managua BPO ecosystem, during the months that followed the initial street conflicts.

Trouble in the Latin American nation – population 6.5 million – kicked off when pro-government groups violently crushed a small demonstration against reforms to Nicaragua’s pension system. Street protests then erupted against the regime of President Daniel Ortega and more violence from police and government-backed paramilitaries then created a period of instability not seen since the Sandinista revolution almost 40 years ago.

Clients Remain Supportive 

Dechant adds that despite the complications, they managed to see the troubles as an opportunity to build trust with clients. “This was seen as enormous opportunity so rather than follow the path of least resistance, our clients realized how important it was in keeping that economy going,” he says. “We have clients who said they were really committed to staying in this market as long as we can,  rather than overreact, and that has paid off.”

Carlos Medina
Carlos Medina, country manager Opticall BPO

Carlos Medina, the country manager for Opticall BPO, which supports optical services organizations in the United States notes that maintaining continuity in operations has remained crucial.  “It is our job as BPO leaders to guarantee the sustainability of our business and enable BCP actions when necessary,” he says.

A sense of calm has returned to Managua, according to multiple sources. Although the regime of Ortega remains firmly in tact, only time will tell if Nicaragua will be able to reclaim the title of ‘safest’ country in Central America.

Sitel, one of the true trailblazers to set up in Nicaragua back in 2008, is also issuing a strong vote of confidence around a resurgent Nicaragua.  (During those years, Convergys also arrived in the country). Sitel’s first Nicaragua call center opened in one of Managua’s few skyscrapers, called Invercasa, in April 2008. Due to increasing demand for capacity, Sitel expanded twice and ultimately added a second site at the former U.S. Embassy compound in historic old Managua in January 2009. In succeeding years, Nicaragua formed the cornerstone of Sitel’s Nearshore strategy.

Mike Small
Mike Small, CEO of Sitel’s America operations

Mike Small, CEO of Sitel‘s operations in the Americas, reports that Sitel’s headcount has increased since the protests broke out. “We have actually grown our clients that are there [in Nicaragua] over the last six months,” he says. “At the time of the crisis we had around 2,500–2,600 employees – now we’re over 3,000.”

Clearly, Sitel remains firmly commited. “Nicaragua continues to be a high performing market, and we expect to continue to take advantages to grow in the market,” adds Small.

Managing through Turbulence

Getting through the difficult months required responsive leadership teams, according to both Small and Dechant. First were the practicalities. Small tells Nearshore Americas that the company immediately ordered over 300 cots, had shower facilities set up and provided food service on a 24/7 basis. Means of communications were provided to employees in order to make contact with friends and family. Dechant adds that making sure travel was available in the form of taxis to get agents back home when there were delays, roadblocks or protests was also helpful.

The context of the crisis, and the fact that Nicaragua remains an emerging economy, also played a factor in how client relationships were managed.  “The first and foremost thing is open, honest and transparent conversations with our clients and making sure we are building contingency strategies,” adds Small.

While Dechant says: “Our leadership team was second-to-none. If you have weak leadership navigating through crisis, you’re going to lose. I believed in the leadership we had and now we are doing better than ever.”

 

Mathew Di Salvo

Mathew Di Salvo is a contributing writer and editor at Nearshore Americas, based in Colombia.

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