While Invest Barbados paints a picture of an investment climate as lovely as one of the island’s beaches, the reality –according to a senior executive who has operated a facility on the island for many years– is more like a storm than a cool breeze.
Nearshore Americas recently published a story that quoted Ezra Catwell, Investment Promotion and Facilitation Manager at Invest Barbados. “We have definitely seen a decline in the companies coming to Barbados, mainly because of the anti-offshoring movement in the US. But we’re confident we can move up into high level services like software and BPO. Right now we actually have more trained people than the demand.” Is that all there is to the story?
According to our sources, however, issues such as rampant absenteeism, expensive commercial real estate and a high cost of living may be more pressing factors contributing to the decline. These challenges, said our source, have contributed to G.C. Services to close and NCO to downsize by 50%. Emeline Taitt, Director – Investment Promotion & Facilitation at Invest Barbados, says, “From time to time there has been some level of downsizing in the call center industry in Barbados but based on our research, there is no evidence that companies have reduced staff by 50%. In addition, there is no evidence to support the claim that G.C. Services is closing.” We contacted G.C. Services and confirmed that they are still operating in Barbados.
When asked repeatedly about absenteeism and the claim that “10% of the workforce is on some type of sick leave, and some clinics have a stack of pre-signed certificates. Someone might be out for a month with a sprained ankle even though that type of injury doesn’t interfere with call center duties,” Taitt said that she didn’t know about such claims, but did not indicate if she would investigate them.
“Barbados’ operational costs compare favorable with most countries in this region,” Taitt said and added that some of the other benefits of operating in Barbados include “continuous marketing through our overseas offices and customer care programmes” and tax and duty free incentives that are offered to new companies under Barbados’ International Business Companies Act (IBCA). In order to qualify for the incentives the entity has to first register as an International Business Company (IBC) which, according to the Invest Barbados website is, “a company that is licensed to carry on business in manufacturing, trade or commerce from within Barbados for customers residing outside of Barbados. An IBC may therefore manufacture, process or otherwise prepare products for export outside of Barbados or provide services to non-residents of Barbados.” Call centers and software developers might be eligible if they meet the criteria of the 1992 regulation stipulating that IBCs:
- Must be financially capable of carrying out the business
- Must not carry on business under any other offshore incentive legislation
- Must not carry on a trade in buying or selling goods and services in Barbados
The eleven call centers currently operating in Barbados, with almost 2,000 employees, provide a spectrum of services such as customer and technical support, database management, transaction processing, medical transcription and insurance claims processing. Our source said that “the government isn’t supporting development of skills; there is a 30 – 40% failure rate on computer skills.” Yet, according to Taitt, the Barbadian government puts “great emphasis on developing skill, have in the past sponsored training courses on software development and call centers and financed a Medical Transcription Training school.”
The training grants employers are given may not be adequate considering the amount of time and resources required. “Basic training is a month until someone comes up to full productivity. Two weeks of classroom and two weeks on the phone. Quite frequently people take a “three-day pass,” especially if they are on the night shift,” said the executive.
Other attractive aspects that Barbados offers, according to Taitt, “is a cost competitive and structured environment with a well-educated and skilled workforce operating in the same time zone as North America. It is known for high quality and productivity. High accuracy levels are reported by clients.” At least one of their clients has a very different perspective.