Dominican Republic BPO Job Growth: Promotional Hot Air or Attainable Goal?

New job figures for Dominican Republic BPO have been communicated to local media, giving us reason to question how and why certain numbers have been calculated.

According to a report by local daily Listin Diario last month, stakeholders in the sector believe that the country’s BPO and call center industry has the potential to generate 60,000 new jobs, which is a hefty amount, especially for a market that – according to the same sources – currently has only 18,000 BPO employees.

The report cites Luis Echevarría, who is CEO of Vixicom (previously Provitel) and also represents the call center and BPO commission for the country’s free zone association Adozona.

“These projections are for the next four to five years,” confirmed Echevarría. “Right now, all of us in the country have the operational demand to sustain that growth – there’s a lot of demand for technical support, certain qualified skills, KPO, and high-end back office services, and many companies are looking to Dominican Republic to deliver them. This is a mature industry now – it’s not the same as it was 10 years ago”

Growth and History of Existing Players

The true employment numbers surrounding this market have always been difficult to pin down. In February 2012, Nearshore Americas spoke to Eddy Martinez, who was then President of the country’s export and foreign investment agency, CEI-RD. Back then, DR supposedly had 10,000 bilingual agents and was projected to hit 20,000 by 2017.

Today, the estimated number of bilingual agents, according to Echevarria, is 18,000, which means the country’s BPOs only ramped just over 1,300 agents per year on average for the last six years, not accounting for attrition rates.

Over the years, many of the BPOs operating in DR have been gobbled up by bigger fish, with Stream Global Services being acquired by Convergys in 2014, and Affiliated Computer Services (ACS) taken over by Xerox (now Conduent) in 2009, among others. So, how have they been growing their employment opportunities since then?

Let’s look at how some of the main BPO players have been increasing their headcounts:

• Conduent, which already has 2,500 employees across three sites, is ramping 500 tech support agents in the next 8 months.
• In 2014 and 2016, Convergys announced 700 and 600 new jobs in the country, respectively, but nothing since then (there are also no open vacancies on their website).
• Alorica, which has two facilities in Santo Domingo, announced 600 additional jobs opening on top of its existing 1,300 in 2014 – almost four years ago, and no news since, but there are still some customer service rep openings on its website.
• Teleperformance, which started operations in DR in 2013, currently has just over 1,000 employees and “looking forward to continue growing”, according to its website.
• Vixicom is a call center provider with almost 1,000 agents in the country.
• Acquire BPO, a relatively new entrant, launched its first center in Santo Domingo in 2016, with enough space for 700 people.
• KM2 Solutions added another 200 people to its existing base of 350 in September last year.

If we just look at these top players, we get around 12,000 existing jobs accounted for, so they would have to significantly increase their current pace of ramping up in order to reach the 60,000 mark in 5 years.

“I am hearing from companies in the association that they are definitely ramping up in the next few years, but regulations and labor laws still need to be sorted with the government, so we are bringing these projection figures into the public eye to show the authorities how much potential the industry has,” said Echevarria, explaining that those same regulatory burdens have been the reason for the slow rate of ramping up in recent years.

It should be noted that Nearshore Americas attempted numerous times to contact the country’s investment promotions agency, CEI-RD, while posing as a potential investor, but the Santo Domingo headquarters was non-responsive, and we were cut off by an angry operator three times in Santiago before being given a number that led to nothing – not a great first impression for other players that may want to enter the market.

“I think the projection of 60,000 workers is a valid statement when taking in consideration how local markets, such as Santiago, are growing,” said Heriberto Rosado, Regional Director of Operations at Conduent. “With the government’s release of free English courses, and once the industry starts exploring Punta Cana as the next BPO hub in the country, we could easily go to 100,000 jobs in a period of 5 years.”

Clearly there is positivity within the sector surrounding the possibility of huge growth rates, but…

…is 60,000 Really Attainable?

The country itself seems to be on the right path to enable such ambitious goals: in 2015 it reported 7% GDP growth, making it the fastest-growing economy in the Americas that year.

Population wise, the last estimate puts the country at almost 11 million people, making it larger than Nicaragua, El Salvador, and Costa Rica. Furthermore, telecoms and transport infrastructure is solid with very few operational disruptions, and the nation is littered with free trade zones, giving new entrants an easy starting point in the industry.

The most recent statistical report on the free zones sector in DR, published by the National Council of Free Trade Zones for Export, shows that 16 new call center companies entered the country’s trade parks in 2016, accounting for 3,041 new jobs, and US$17.8 million in investment.

If you also take into account the growth of operational free trade zones over the years, there were just 51 in 2011, rising to 68 in 2016, meaning that 17 new parks were opened in 5 years, according to the same report. In terms of trade zone vacancies, there was almost 2.5 million square feet of available space spread across 22 of the country’s 68 parks at the end of 2016, leaving plenty of room for more BPOs to move in.

However, local media reports suggest that call center workers are less than happy with conditions at many of the large facilities, with unions reporting labor infractions and inhumane practices. Whether true or not, the residents of DR are unlikely to jump into a BPO role if reports like this continue to come out of the sector.

According to Echevarria, the last revision to the country’s labor laws was at least 20 years ago, which is why the industry is attempting to address this with the government. If this can be achieved, it’s possible that industry-wide employee satisfaction rates will improve, which should be a priority if the Dominican Republic BPO industry hopes to attract another 42,000 people.