El Salvador was one of the first outsourcing destinations that would spring to mind in the BPO world back in the day – but how does it fare in 2019?
“It’s not as it was five years ago where you had dime a dozen people that had a very good level of English and also computer literacy that could be employed in the BPO industry,” Daniel Quevedo, COO at SkyCom, which is well established in El Salvador, says. He argues that scaling in the country is now too difficult and they will be looking to Guatemala, where they also have operations, to grow.
“We have pretty much decided to not grow in El Salvador,” Quevedo says. There have been reports that it is becoming a struggle to find talent in part due to lack of English speakers – and some companies are now looking elsewhere.
SkyCom set up in 2008 in El Salvador and has 850 agents – 750 being bilingual. It is looking to a third Central American or South American country in which to expand to.
Supply of Talent
“The industry itself has grown very large in El Salvador and more and more we see the trend and we see the necessity to expand to other markets,” continues Quevedo. He adds that not enough is being done to provide the industry with skilled workers: “They [the government in El Salvador] very recently decided to make English a second language be a part of school curriculums besides the bilingual schools that already operate here.” Competition with other industries is also a factor that makes it harder for BPOs.
Since the 1990s and early 2000s, several large customer care operators – including Teleperformance and Sykes – established themselves in the Central American nation. Currently there are around 22,000 bilingual BPO agents in the country.
Saturation is a worry for some, but not all. “The talent is magnificent,” says Eduardo Salazar, Co Founder & CEO at OneLink BPO, which has operated in El Salvador since 2013.
“We still feel there is plenty of capacity to continue growing and there is no shortage of bilingual agents.” Salazar added that OneLink, which currently has 2,600 agents in San Salvador, with 600 of those being bilingual, sees expansion as inevitable and says that hiring an extra 300-400 next year is possible.
Smaller operations, such as The Office Gurus, which has 1000 agents and 29 clients in El Salvador, also say the situation is good for scaling.
“We’re a small operation compared to the other much larger centers in the country,” says Dominic Leide, the president of The Office Gurus, which also has sites in three other countries.
“But, from a recruiting standpoint, in terms of talent we have had zero issues. We find a very high-level of English. I think the situation is getting better in the country. We have grown and we have had no issues growing.”
Deportees a Factor?
The increasingly strict immigration policy of the U.S. is driving more Salvadorans to return home. Of course, many of these individuals have outstanding spoken and written English skills and have filled seats in contact centers across the region. Last year the U.S. government said it would expel 200,000 Salvadorans living in the country – worrying the government of El Salvador. The U.S. government has since extended temporary protected status to the Salvadorans.
“We thought it would’ve been a big opportunity for us in terms of recruiting,” says Leide. “And we have got some [deportees]. But it’s not like our recruiting pipeline is full of deportees.”
While Quevedo says it is unlikely to help with the saturation in the country. “A part of that group [those deported] is useful but it’s not enough to make a difference to the labor workforce,” says Quevedo, who has worked closely with organizations working on reinsertion of deportees into Salvadoran society. “We thought it would’ve been a bit opportunity for us in terms of recruiting,” says Leide.
Sources told Nearshore Americas that, in general, the market continues to emerge – more hires are being made and several operators continue to grow. No big companies have moved into the country to set up BPO operations in the past two years, though smaller operations of 300-400 seats have.
Sebastian Menutti, Industry Principal at Frost and Sullivan, tells Nearshore Americas: “During the last decade, El Salvador has been one of the key countries that substantially grew based on nearshore operations. Although growth rates have dropped to single digits during the last couple of years, Frost & Sullivan forecasts El Salvador to continue to experience high single-digit growth during the next 3-5 years.”
He adds: “However, as there are many big players in the country, competition for talent is fierce. So any other provider that might enter El Salvador, would need to deal with this competitive pressure and might have a hard time getting the labor needed for large-scale operations.”
So for those who know the dynamics of the country already – the big players such as those who spoke to us – business will continue to prosper.