Central American BPO is experiencing a mix of competition and collaboration, as some of the biggest firms in the region attempt to bolster the industry together, while each vying for the best available talent.
Due to the difficulty in scaling talent in Central America, companies like Atento and Alorica understand that the pool could dry up if they don’t work with regional governments, and each other, to refill it.
“We all benefit from a common position toward the industry, and a well-developed position with local governments,” said Stewart Ferguson, Country Manager at Atento. “Regardless of competition, it would not be beneficial if local governments took non-positive action toward BPO, or changed the law, so we have to work together to make sure this doesn’t happen.”
BPO firms in El Salvador and Guatemala are holding regular meetings with investment and export groups, and local governments, to discuss trends in the industry. There is also a human resources group that meets monthly to share news about the talent situation, according to Ferguson. These meetings are a chance for companies to share information about security, fraud, and unemployable agents in the region, as well as new strategies to increase the size of the labor pool.
“During these national meetups, we don’t discuss business strategy and competition, or how we hire people, but we do discuss how to increase the availability of agents,” said Miro Batista, Latin America President at Alorica. “In some countries we have a “do not hire” list, which includes call center “training jumpers”, or people who committed fraud. This is something we share between all companies.”
Considering that some governments are pushing to scale back on benefits and incentives that were laid out 30 years ago, like free-trade status or tax incentives, companies also use investment groups and the American Chamber of Commerce to lobby their positions with the government, in the hopes of continuing support for the BPO sector.
Competing for Talent
Despite this collaborative approach to the industry, some BPOs in the region are still competing heavily for agents by offering a variety of joining bonuses or incentives to attract people during the hiring push at the end of each year.
These “ramp seasons” see companies bulk up their workforces by 20-30% of their normal working average, but then reduce them with massive layoffs after 2-3 months.
“During this time, joining bonuses do make sense, because if agents are only there for a few months they respond better to economic or material incentives – this is seasonality,” said Ferguson.
Generally, these signing bonuses are more successful with Spanish-only agents, which are in abundant supply. However, competition is fierce for English or bilingual agents, due to the difficulty of scaling these abilities in such a small region.
“English talent is not as accessible or available as Spanish, so we don’t get involved in hiring sprees like some of the Spanish-focused companies,” said Batista. “If I can hire people with right English skill-set, most of the time they will be placed on an account that is not seasonal.”
Retention Tactics vs. Churn
Both Atento and Alorica agree that in order to get the right labor pool in place, they need long-term relationships and contracts with their new agents, not just attractive signing bonuses.
“You will see companies that focus on gaining a high volume of agents, but those agents may focused on what they can gain from their signing bonuses,” said Ferguson. “From an economic standpoint, it is more important for BPOs to focus on retaining agents, because the long-term payoff is much greater. When the bonuses get out of control, agents become incentivized to jump from one company to the other. That benefits nobody, neither the agents, the hiring clients, nor the industry in general.”
Alorica’s approach is to reward agents upon reaching certain milestones in their tenure at the center. The company doesn’t like to have hiring bonuses, but rather graduation bonuses, then scaled bonuses for when agents complete training, or become more experienced.
Despite the search for English talent in Guatemala, Batista believes that the market is still far from saturated.
“People are getting better at English and they have the required level of ability that we need,” he said. “Most of them are coming from the finishing schools established by the government and supported by BPOs, but it’s also important to remember that we haven’t entered secondary cities yet.”
Batista continued by explaining that if a country has 40,000 FTEs available for bilingual support, you cannot generate more than 10% per year in additional FTEs that are industry ready without eating into the industry. He believes that programs like the finishing schools are one of the key approaches to extending the shelf life of a country’s BPO sector.
Ultimately, the collaborative approach that BPO companies in the region have established will need to continue in order to keep the industry pumping and the talent faucet switched on, otherwise the competition for talent could start to look a lot uglier.