As COVID-19 Gains Strength, the Nearshore Aims to Stay Nimble
On Wednesday, March 11th, the World Health Organization (WHO) officially declared the novel coronavirus, which causes COVID-19, crisis a pandemic. The Nearshore services industry is, day by day, learning to adapt to the seriousness of the pandemic and the consequences that are soon to follow.
Nearshore Americas interviewed six top-level executives and CEOs to hear first-hand how they are adapting to the crisis. From those conversations, we learned that the context and potential impact to business is continually changing. Companies seem to be preparing for every scenario.
With measures ranging from work-at-home to daily updates with clients and health training, the outsourcing industry is playing close attention and trying to stay nimble. In this new delivery of The Exchange, we present insights from Teleperformance, Avantica, Softtek, IBEX, and Tech Mahindra – all of which have operations established in the Nearshore region. For the sake of providing some contrast, we also checked in with South Africa’s CCI Global to better understand how leaders are managing the crisis there.
- Established a COVID-19 Global Task Force for worldwide continuity
- Coordinating international prevention/delivery actions with clients, national and local government agencies
- Client by client disaster recovery planning
- Taking temperatures of people that come into facilities.
- Extra cleaning and hand sanitizers
- Health training (handwashing and proper way of coughing, etc.)
Terry Rybolt is Managing Director for Teleperformance’s Work-at-home Program Development. Rybolt says that Teleperformance sees work-at-home as a complement to in-office operations, reaching the firm’s entire gamut of clients – in healthcare, retail, technology, travel, banking, etc. However, the COVID-19 crisis has attracted more attention to work-at-home from previously skeptic clients.
“What’s interesting to me is, clients in the past, who had really no interest in talking about work-at-home, are suddenly very interested, from a disaster recovery planning (DRP) perspective,” Rybolt told Nearshore Americas.
“These are all areas that we’re clearly discussing on an individual client by client basis, and they understand that it’s not going to be COVID-19, it’ll COVID-20 next year, it could be something else. I don’t think you can ever be prepared for when the government steps in and says, “you’re not allowed to come to work.” How do you prepare for that, without a work at home strategy?” he added.
But Rybolt doesn’t think that having work-at-home as a DRP strategy is enough. For him, you need to have it on an ongoing basis to build up a level of knowledge, experience, and comfort that will make it easier when you have to increase the volume because of a crisis.
Currently, Rybolt says that Teleperformance has not yet been harmed by this crisis. They are actually seeing an increase in the volume of interactions for clients in areas such as travel, due to flight cancellations.
“What I see happening coming up -and this is just an opinion-, as you look at the amount of goods that are not being able to be shipped because of delays in manufacturing or shipping delays, you know that those interactions are coming because people are going to wonder where their stuff is,” Rybolt said.
They are preparing for such scenarios with staffing, constant communication with clients, and best practices, such as transitioning some of their clients to self-service to free up the phone lines for more involved conversations.
“We’ve rallied around those who matter most -our affected employees and clients. At a time of such great human vulnerability, nothing is more important than the well-being of our people,” said Daniel Julien, Chairman, and Group CEO at Teleperformance.
- Work-at-home as usual, except for people at risk who can work entirely at home.
- Handwashing and proper sneezing/coughing campaign.
- Complete ban on travel, except if approved as essential by the company’s presidents.
- Cancellation of company events.
- Increase in cleaning at offices.
Last Thursday (March 5th) Avantica released a protocol on measure to handle the COVID-19 crisis. Since then the measures applied by the company have remained the same.
Mario Chaves, Avantica’s CEO, and Jessica Barrantes, Corporate Talent Management Director, talked with Nearshore Americas amount what they are doing to handle the crisis.
“We’ve had situations in which clients have told us not to travel to their office, and all of their employees are working from home,” Chaves said.
Chaves explains that Avantica already has work-at-home as a relevant part of their normal business. Now, they are also implementing 100% work-at-home for their employees that have risk factors, such as asthma, overweight, diabetes, or pregnancy, among others.
Moreover, they are canceling all travel, except if it is considered as essential for business continuity by the company’s presidents. Employees that have traveled for personal reasons to countries at risk, also need to stay at home for two weeks upon returning. Everyone who travels abroad will need to notify it to Talent Management as well.
Just this week, Avantica canceled four company events and will continue to do so during this crisis.
“We’re still not feeling a direct impact. Obviously, this is a chain. We know that the travel industry is being affected. Airlines are having a decrease in bookings. People are canceling trips. And that has secondary or tertiary consequences,” Chaves said.
- Established a Global COVID-19 Committee for worldwide continuity, with all the senior leadership of the company
- Client by client and site by site disaster recovery planning
- Work-at-home (still in development in most sites)
- Updating BCPs
- Constant communication and monitoring of the situation
COVID-19 took over two months to reach the Americas, from its origins in China. And when it did, Softtek had several learned lessons, since it has operations in three Chinese cities.
“Even though the main affected region was around Wuhan, where we don’t have operations -our operations are in Beijing, Shanghai, and Wuxi-, the government ordered people to work from home,” Beni López, CEO at Softtek US and Canada, told Nearshore Americas.
“From the very beginning, we had to take all the different measures to allow people to work from home for several weeks. And in some cases, in some areas, they’re still working from home remotely, so it’s becoming almost a status quo in China,” he added.
In the Nearshore, Softtek has operations in Mexico, Brazil, Argentina and Costa Rica. In the region, their Business Continuity Plans (BCP) have been in the process of being reviewed and updated during the past three weeks.
“We have BCPs for every single project, that’s our policy. We have BCPs at a project level, at a global delivery center level, at an office level, at a city level, at a country level. In this case, we were reviewing and updating the BCPs with all the learnings that we had from the previous crisis of 2009, with H1N1. This one seems to be of a bigger scale, apparently, so we have established different measures,” López said.
“The next step phase is communication with our clients. That’s already happening, to align our BCPs to their existing policies. And everything is actually very fluid, all these clients are in the process of reassessing their own BCPs, and reassessing what their policies and responses are going to be,” he added.
In the meantime, as a company, Softtek is taking as policy what some people would consider common-sense measures, such as avoiding non-essential travel and reassessing their participation in different events.
Work-at-home is still on its planning phase. In their Spain site int’s already operational, but only for those who want to work remotely. Currently, their BCPs are focusing on creating the conditions for when remote work is needed or mandatory.
“We have been updating those BCPs, making sure everybody is ready, and making tests,” López said. When they go to Level 2, a smaller percentage of people will be working from home, at Level 3, most of the people will be working remotely, and Level 4 would be everybody working remotely, because there has been a lockdown in a particular city.
“Right now, we’re finalizing the preparation stages, making sure that people have the VPN, connections. If in some cases, especially people working at the client site don’t have a laptop, which is a very small percentage, we’re obviously stocking up more laptops for when the time comes, if the time comes,” Lopez added.
Still, at the moment Softtek doesn’t report any particular disruption or affectation to their business. But they are concerned about the impact of event cancellations.
“Our number one priority is the health of everyone, so we’re watching it very closely, and let’s see how things go,” López said.
“From a business perspective, I’m more concerned about the economic impact. Monday was a big example of what type of impact could happen in case of uncertainty, with the prices of oil, combined with the uncertainty of the spread of the virus can do to the markets. That to me has a bigger impact on our clients, making more drastic decisions on how to respond to their plans for this,” he concluded.
- Thermometer guns
- Quarantine spaces
- BCP planning with clients (daily calls)
- Stay at home policy (72 hours, extended for up to two weeks)
- Preemptive planning for countries with no cases
Bob Dechant, CEO at the BPO firm IBEX, says that the most immediate process change they have in place is the use of thermometer guns to detect fever in their agents and visitors to their sites.
IBEX has also established quarantine areas in their facilities so that if anybody feels ill, they can be isolated to avoid the potential spread of the virus.
“It’s away from production floors, it’s away from the entrance, separated from the rest of the building. If someone is not feeling well, the first thing we are going to do is get them into a quarantine room, and in these locations, we have nurses and clinicians in those centers. Our goal is to send then that person either to a local hospital to get checked, or back home for self-quarantine,” Dechant told Nearshore Americas.
IBEX has experienced a significant decrease across the board on clients travel to their centers. Despite that, just last weekend they hosted a client visit in the Philippines.
The company has created a policy telling people not to come their center if they are feeling well.
“A traditional policy would be 72 hours, and right now, if somebody is ill, we’re keeping it at 72 hours and then evaluate where they are, to determine whether if they should extend that up to two weeks. We’re dealing with those on a case by case basis,” Dechant said.
To mitigate the impact, the company is building BCPs for each client, and doing so, they are having daily calls with them. “From the client standpoint, we have several clients that we are 100% of their outsourced volume or even 100% of their total volume. Clients that fall into that category, you can imagine the criticality of having a pretty elegant BCP plan which has been geared around keeping operations up and running,” Dechant said.
In other scenarios, BCPs involve moving operations from an affected site to another. But in the case of a pandemic, this is not an option: you cannot move people from an “infected site” to one that has not reported cases.
“The real solution then is to figure out where you can move, how to move this into a work-at-home environment from an agent standpoint,” Dechant said.
But some of the markets in which IBEX operate have bandwidth issues, which creates challenges in planning how to execute the strategy. “You have bandwidth issues, you have PCI issues, things like that, that you have to flush out. It does add a clear level of complexity, but we’re working with all of our clients to really build-up,” he added.
Just like Teleperformance, IBEX is experiencing a volume increase in some of their verticals, particularly online retailing, food, and grocery delivery, as well as e-commerce in general. Dechant expects a decrease in volume for goods retailers, as there are fewer products in place due to the crisis, but this hasn’t happened yet.
- Huge campaign to educate their people (hand sanitizers, washing etc).
- International travel ban
- Self-isolation for people who have travelled recently
- Taking temperature of employees upon arrival
- Requesting clients and suppliers from affected areas not to visit them
“We have banned all international travel for our employees (to affected areas) and for those that have recently traveled or have been in contact with people that have traveled we ask them not self-isolate,” Roe told Nearshore Americas.
The company is also taking the temperature of their employees, deep cleaning every day, and putting in place traveling restrictions.
Roe says that some work-at-home is being applied, “but the infrastructure in Africa does not allow for this on a large scale.”
“Clearly this is an evolving situation, but at this point, it seems that this is likely to get materially worse before it gets better, particularly in the USA and Europe, and this will be disruptive for both our business and our clients’ businesses. It’s hard to see many businesses going unscathed,” Roe said.
The CEO considers that, at best, this crisis will slow their growth as travel will be restricted, and client decisions will be slower. “At worst it will have a massive economic impact on our client countries’ economies that could see some of them on the brink,” he said.
“Currently the virus has not taken hold in South Africa, and the government is well prepared (compared to Western governments they are remarkably prepared) but if it did take hold it could have devastating consequences as governments impose restrictions on movements, that limit our ability to deliver services,” he added.
Yesterday (Sunday, March 15th), South Africa’s government declared “national state of disaster” due to the pandemic. Roe considers that this will not affect his company deeply since they have already implemented many changes that fit with the disaster management plan, but it is too soon to know.
“Undoubtedly there will be some panic and this may lead to some ops being a little disrupted for a couple of days with higher absence levels etc and we will mitigate this by over resourcing,” Roe said.
- Travel restrictions
- Deep cleaning in all facilities
- More availability of disinfectant and sanitizers
- Educational campaigns
- Offering work-at-home as an alternative for clients
- Thermometers at entry and exit points
Tilak Nag, Vice President and Growth Leader for Latin America and the Caribbean at Tech Mahindra, says that his company took measures very early on before the COVID-19 spread was considered a major threat.
“For instance, as far as sales, business development, customer-facing, just as many of our clients have moved to an online channel, so have we. We implemented that very quickly,” he said.
For Nag, the challenge is to design plans that are dynamic and responsive to adapt, as the situation evolves and unfolds.
At the moment, Tech Mahindra is not implementing work-at-home for their employees, but they have already offered it as an option to their clients.
“As a company, we have a pretty evolved work-at-home model, very secure, in terms of BPO, we ensure the security of all kinds of information. We’re willing to work on that model if clients are interested, as of now we are still working out of our centers and locations,” Nag said.
Moreover, Tilak Nag states that Tech Mahindra has BCPs and recovery plans as a norm for all of their locations. What has been different this time, is that these plans are usually focused on natural disasters, such as floods, which happen in a particular place, and not worldwide, like a pandemic.
Despite the uncertainty, Nag doesn’t believe that the pandemic will risk his company’s revenue.
“We are working on projections and see how it impacts our business. I think that at this point, it is a little premature to be able to draw up some numbers. The impact on our business will not be as much as retail, airlines,” he said.
“It’s going to be more driven by how our clients’ budgets get impacted, rather than for us directly,” Nag concluded.
Tech Mahindra has over 10,000 employees in Latin America, and offices in São Paulo, Santa Cruz (Bolivia), Bogota, Guayaquil, and San Isidro (Peru), with headquarters in Buenos Aires.