StarTek’s Carlson: In the BPO World, It’s Getting Tougher to Find the ‘Right Conditions’

In the U.S., executives are making decisions about Latin America based on emotions and not fact… in India, customers are now looking for something different… in the Philippines, wage pressures…. in Egypt, “superior” English skills… Western Europe, nearshoring to Eastern Europe….

Our recent conversation with Chad Carlson, StarTek‘s newly appointed CEO and president, was like a quick virtual tour of today’s BPO world, and those were a few of his observations along the way.

Since entering the industry in 1995 with Sykes Enterprises, where he served in a variety of roles, including VP and GM OF Americas Operations, Carlson has been on an upward trajectory in the global BPO industry. After Sykes, he was ClientLogic’s COO for the Americas & Asia Pacific, with responsibility for operations in six countries. Revenues grew to $450 million and employees numbered more than 10,000, he said.

After ClientLogic acquired Sitel, Carlson, as EVP of Global Operations, had responsibility for Sitel’s operations in 30 countries and 60,000+ employees. During this time, the firm opened the Sitel Academy, a capability-building program, in Baguio City, Philippines.

Carlson took some time to speak with Nearshore Americas about the current worldwide BPO sector, and some highlights follow.

“It would appear that there is some trend within the India space where companies are moving to more non-voice knowledge, and chat e-mail is being used more,” Carlson said. “We are solid in India from a client perspective, but several clients have pulled off from English-language services.”

Although outsourcing continues to thrive in the Philippines, there is a lot of pressure around wages, which could undermine the sector. “A lot of clients are looking at saturation in the Philippines.” StarTek alone has two very large facilities in Manila, with over 4,000 employees.

“Egypt is a hot market – the English is superior there, but a lot of the political unrest across North Africa has slowed down movement and has affected the market.” Carlson said companies from French Canada and France are utilizing services in Libya and Morocco, whereas other European countries are looking to Eastern Europe — “Basically a European Nearshore play.”

Longtime LatAm Perspective

Carlson’s introduction to Latin America came during a job that involved exporting newsprint, wood pulp, and printing paper. “I used to go to a lot of countries to make sure the cargo went to our clients. I spent a lot of time in Venezuela, Ecuador, Brazil, and others. What I’ve seen going on in Brazil has been phenomenal. The development of Sao Paolo is very impressive. Venezuela has changed a lot. There were two coup attempts when I was there.”

“Clients are looking hard at Nearshore sources like Latin America. A lot of offshoring from Spain is going to Panama, Colombia, and Chile; the Colombian accent is neutral.”

Sykes Enterprises acquired a facility in San Jose, Costa Rica, while Carlson was VP and GM of Americas Operations, making it one of the first companies “in with outsourcing,” he says. Carlson has also looked into the Dominican Republic, as well as Trinidad and Tobago. He says he is a little concerned about Buenos Ares, which “is not as US-centric as some of the Central American countries.”

A proponent of Latin America, Carlson is well aware that one of the dynamics of the call center industry is the shifting of employment from North America. “But,” he says, “the flip side is providing a lot of opportunity to a lot of people. You can have an impact on people’s lives and development. We started in the Philippines in 2000, when there were only a few players, now there are a lot. It is very exciting. People there look at the BPO space as a career opportunity. That is not always the view here.”

Opening in Honduras

On July 15 StarTek announced the signing of a lease for a new contact center in San Pedro Sula, Honduras. The center is expected to open late in the third quarter of 2011. “The addition of a center in Honduras was driven by client needs,” said Carlson, “We have experienced great success with our StarTek Costa Rica facility and went searching for another bilingual, educated population in a country with a stable democratic government. which ultimately led us to Honduras. This further expansion into Latin America is consistent with our plans to continue to grow our global footprint.”

The center is located in the Altia Business Park in San Pedro Sula. The city of over 800,000 is home to seven higher learning institutions and is the second largest city in Honduras.

Where’s Next?

Carlson expresses concern that there aren’t a lot of sourcing locations left to consider. “It is a tougher play to get the right conditions to scale up.”

“The Spanish companies, and many global companies, used to support a lot of the South American countries from within particular countries. Now they are asking, ‘What’s the best country to consolidate in?’”

Carlson points out that Jamaica is fairly saturated and there has been some difficulty with the local accent. He heard a lot about Belize and Guyana during his last tour and is intrigued by the possibilities in those two countries. He’s also intrigued by the idea of a “pan-Latin” center – one country that can support all Latin American operations.

Carlson also talked about the perceptions people have about the Nearshore region.

“A lot of clients heavily resisted Honduras because of security concerns, but there haven’t been any State Department warnings,” Carlson said. “Some say ‘no’ to Colombia but ‘yes’ to Nicaragua; there is a lot of inconsistency and misperceptions about the countries and security concerns. I think a lot of it is based on emotional issues. A lot of large corporations have security departments making arbitrary decisions not based on facts.”