New Health and Environmental Standards Put Added Cost Burdens on BPOs

Business process outsourcers are interpreting a labyrinth of new government regulations, across an assortment of geographies, as they come to grips with a rapidly-changing playing field. As challenging as work-from-home (WFH) has proven to be, many companies have also seen this as a pathway to reduce the many burdens they now confront operating within delivery centers.

Without question, WFH has brought many new costs and virtually every BPO we have spoken to notes that their margins are increasingly strained. As for new workplace standards, BPOs are trying to determine the exact ratio of workers that will remain at home. That decision in part rests with the new health and the environment standards and whether BPOs can act with confidence that the rules won’t change later. Miro Batista, the CEO at Iterum BPO Services in Panama City, says in the case of his operations, the new roles are ‘not entirely’ clear at this stage.

HVAC Heats Up

New government regulations for ventilation are among the protocols now being put in place for call centers. Special consideration must be given to the heating, ventilation and air conditioning (HVAC) systems within the BPO setting. For the proper monitoring and maintenance of all HVAC systems, trained and certified HVAC operators are to be employed.

A new Harvard study has further connected the dots, showing a link between exposure to air pollution and severe cases of coronavirus. In the first week of April 2020, the Harvard T.H. Chan School of Public Health released data showing that an increase of only 1 gram per cubic meter in fine particulate matter in the air was associated with a 15 percent increase in the Covid-19 death rate.

Lead author Francesca Dominici, co-director of the Harvard Data Science Initiative, indicated that the study defines high pollution levels as fine particulate matter (PM 2.5) levels above 13 micrograms per cubic meter of air, much higher than the US mean of 8.4.

“The results suggest that long-term exposure to air pollution increases vulnerability to experiencing the most severe Covid-19 outcomes,” Dominici said.

“In many countries in Latin America we have had to act by common sense [especially with regards to the] mandated reduction in the density of people in BPOs… Maximum occupancy [has been] reduced to 30 percent,” Batista said.

Companies have been left with no option but to do something in response to the emerging government regulations. Batista pointed out that inaction would force local government to shut down their operations.

Most challenging, he said, has been, “moving forcefully to WFH models and adjusting the site facilities to the new social distancing.”

Anand Biradar, Country Head for Hinduja Global Solutions (HGS) in Jamaica, said that while the regulations are clear, some of them keep changing and are costly.

“Maintenance costs have increased for carpets, AC/HVAC, labor costs and costs due to cubicle separation,” he outlined. At one time, when WFH was mandated, the company also faced costs attached to that.

“We have industrial units that return stale air and take in fresh air,” Biradar said. “We also use a Merv-8 rating filter which we plan to increase to Merv 13 or 15, based on recommendations. We also clean the filter once a month and perform maintenance on the entire unit every three months.”

The changes for HGS have increased operational costs. The fees below are in Jamaican dollars (J$139 is equal to US$1):

• The weekly carpet cleaning bill has increased from about $800,000.00 a month to between $2.5 and $3 million.
• Filter cleaning amounts to around $3 million a year.
• PPE, sanitizers, alcohol and chemicals are needed to prevent Covid-19 infections.
• Security partitions to enforce social distancing and mandatory checks add another $450,000 – $500,000.
• The transport budget has increased to $4.5 million per month.
• Cost for WFH transport and setup.
• Spacing requirements between workstations must be 6 feet, so fewer employees can work in the office.
• Electrical infrastructure expenses total around $500,000.

Ministry of Health and Wellness regulations in Jamaica stipulate that work stations should be at least six feet apart. All work cubicles must be fitted with the necessary physical barriers reaching heights of at least 1.5 feet above the desk.

Social distancing is expected to be exercised in all workspaces, lunch areas (outdoor dining is preferred), common areas and bathrooms. All furnishing, partitions and equipment must be made of material that can be easily cleaned and sanitized. Authorities are asking for carpets, rugs, mats, curtains and blinds to be removed, or at least regularly cleaned and vacuumed.

Qualfon Spends in Guyana

Qualfon, whose BPO operation spans the United States, Costa Rica and Guyana, created a global task force in the early stages of the Covid-19 pandemic.  The company aims to monitor developments by country, province, state and municipality.

“We are taking extraordinary measures to protect the health and wellbeing of our employees by ensuring social distancing, enhanced cleaning services, transportation allowances and WFH arrangements,” said Ryan Carey, Vice President of Operations for Qualfon in Guyana.

“Our Guyana team has instituted a number of safety measures on campus, including an onsite clinic with a registered nurse, wash sinks before entry, temperature checks at the main entrance for everyone coming on campus, sanitizing stations in the main hallways and program areas as well as enhanced janitorial services,” he said.

Currently, the company has just under 20 percent of its employees at home, which also helps minimize the number of team members on site.

“Both campuses are climate controlled and equipped with modern cassette-type air conditioning units allowing the easy flow of fresh air throughout the building,” Carey said.

Asked specifically about the cost of restructuring under Covid, Carey said: “Our space is unique as we have two large buildings on our campus. Every program has solid separating walls offering additional cubicles to limit occupancy and allow for social distancing. WFH was deployed using computers that were already available, allowing for minimal costs.”

Batista said Iterum BPO Services follows strict hygiene protocols.

“Everything from having to disinfect peoples shoes as they walk into the site, thermal camera temperature monitoring, hand-washing breaks, acrylic partitions in common areas, continuous testing of personnel and incident reporting and tracing when positives are found,” he noted.

He said operating expenses have increased due to hygiene concerns and occupational health monitoring. But he added that social distancing was by far the most expensive measure. Capacity on sites has been reduced to almost 30 percent of its total maximum occupancy. That has a significant impact on the operational cost of the BPO.

As far as WFH, he said his company has increased investments in additional remote monitoring, co-working and performance management. The company, Batista, has also had to deploy solutions for information systems security to prevent security breaches during WFH.

Switching to WFH

Companies which already had WFH-based business continuity plans avoided the rigors of building new infrastructure or implementing new cleaning protocols.

“We are operating business-as-usual using a WFH model with more than 5,000 people working properly and with no impact on business results,” said Fabian Saavedra, the General Director of DirecTv Telecenter PanAmericana and the Vice President of Customer Care – DirecTv Latin America. Saavedra said his organization’s IT infrastructure meant they were able to maintain the service that they offer to clients in Latin America without disruption.

Even before lock-downs were implemented in Colombia and other countries in the region, DirecTv had begun their business continuity plan. In less than 72 hours, they helped a total of 4,000 people adapt to a WFH model, Saavedra said.

In Honduras, “regulations are every strict,” said Jerry Oversen, SVP at GoGo Internet, a Chicago-based company which works with Startek, a global services company with centers in the Caribbean and Latin America. However, Oversen said the company switched seamlessly to WFH, thanks to a business continuity plan which was already in place.

“A couple of years ago, when civil war broke out, we implemented a disaster recovery plan featuring WFH. So, when Covid hit we were able to transition. Most of our interactions are online chats, which are less risky to do from home. It was pretty simple.”

According to Startek President Rajiv Ahuja, the BPO has a large footprint across Honduras, Jamaica, Peru and Argentina with over 7,000 employees.  “At Startek, the safety, health and welfare of our people is our top priority,” he said.

“We are working with our clients on identifying core services, required volumes, staffing requirements and cross-skilling activation. We’ve identified business processes that are being impacted across each of our campuses in Latin America.”

Adaptation

Alejandro Ossa, Executive Director of Invest Pacific, points to data his agency collected on 85 foreign companies operating in the Colombian city of Cali and other towns of the Valle del Cauca.

The data shows that 70 percent of these companies expect their operations to be normalized by October.

The survey shows that nearly 80 percent of the companies in the region have been able to protect employment or even increase it, through multiple strategies such as credit acquisition, government subsidies or financing from their headquarters.