Nearshore Americas

Clear Signs that Panama’s Contact Center Industry is in Decline

Source: LaPrensa (Translated by Nearshore Americas)

The phones stopped ringing.

Seven call center who supported clients in the U.S. closed their doors last year. They were victims of  the global financial meltdown. Hardest hit were small call centers who had one or two customers.


It is not known how many workers are affected, but it is safe to assume that some portion of the remaining 9,000-strong call center workers in this country have feared that their employer may also disappear. The closure of these companies is significant,  considering that in the past nine years no other centers have closed operations, according to records in the Export Processing Zone, Ministry of Commerce and Industry.

Beyond the global financial problems, the call center industry in Panama struggles with the same problems it found when it first developed over 10 years ago: A lack of trained personnel.

Joseph Fidanque III, President of Star Contact, a company that employs nearly 2,000 associates, acknowledges that the financial crisis affected the performance and the volume of calls from some of its customers, prompting the company to seek new customers to offset that decline.

Other companies, like multinational Dell, have diversified. Martín Álvarez, manager for Dell’s Panama site, says the country’s call center not only serves the U.S. market but also focuses on providing technical support domestically and within the region. “Now we handle some of the company’s finances and provide support to the marketing and sales departments,” he said.
Dell has about 2000 employees locally, of which 60% are now focused on the Latin American market.

Beyond the global financial problems, the call center industry in Panama struggles with the same problems it found when it first developed over 10 years ago: A lack of trained personnel.

Fidanque III believes that the industry has reached a saturation point, mainly due to the lack of people who speak English.  It is believed that the call center industry could easily be four times bigger if there were qualified personnel.

Liliana Cortez, director at  SITEL’s local facility, which has 3,500 employees, says it is still a challenge to find people with a good command of English.  This has unleashed what is known as “personal cannibalism”. There is a high turnover of workers, which has led companies to increase wages.

According to estimates from industry-related sources, ten years ago an agent was paid a monthly average wage of $500, but now companies offer between $650 and$750 as a base salary, excluding bonuses for performance.

The manager of Dell said that despite heated competition for talent, his firm has been able to retain over 80% of its staff base for more than five years.

Luis Gonzalez, regional manager for Central America and the Dominican Republic of Manpower, personnel recruiting firm, said that “personnel cannibalism” is especially prevalent in the mid-to-senior level ranks. “Companies are investing in training, because they understood that it is more expensive to hire new personnel to train and retain their current partner,” said Gonzalez.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

1 comment

  • As Martin said, our Dell center in Panama City does technical support for end-customers, and also performs some BPO-captive functions such as marketing and sales suppport. From the point of view of Dell we do not see the "decline" that the article describes. In fact, some of our LatAm regional executives are based in Panama and the center is chugging along just fine.