Nearshore Americas

Jamaica Endures and Adapts as Crisis Sends BPOs into State of Upheaval

The BPO industry in Jamaica is going through an unprecedented period of upheaval and, as is the case in many other popular Nearshore destinations, how things will look when the crisis abates is very difficult to forecast.

For more than a decade, the Business Process Outsourcing Industry in Jamaica has been seen as a ‘crown jewel’ for succeeding administrations, growing to become second only to tourism as a source of employment and taking third place – behind remittances – as a source of foreign exchange. Jamaica currently ranks fourth in the Caribbean in the number of Covid infections.

As of Tuesday this week, Jamaica had 473 infections, with a reported nine deaths attributed to the virus. Most of the infections are linked to an Alorica facility where over two hundred workers and their relatives have tested positive, say Ministry of Health sources.

This development has triggered waves of disruption across the island. The government shuttered call center locations in St. Catherine, where Alorica is located, for two and a half weeks, and also assigning a new task force to look into how closely BPO centers were adhering to health regulations.

But, even before the Alorica crisis, the government had been calling on call centers to enable workers to do their jobs from home, in a bid to reduce virus spread.

Widespread Impacts

In the crosshairs are workers who have been furloughed for as many as three months [local laws permit suspension of employment without pay for three months] and others who remain in limbo at home, not sure yet if they will secure the coveted work-from-home arrangement from employers.

Nearshore America has learned that most workers are not paid when on furlough, however many have been allowed to retain health and life insurance benefits.

Colette Roberts Risden, the Permanent Secretary in the Ministry of Labour and Social Security (MLSS)

Colette Roberts Risden, the Permanent Secretary in the Ministry of Labour and Social Security (MLSS) in Jamaica, which monitors both wage issues and health and safety conditions in the workplace,  told Nearshore Americas that “the BPO sector in the island has been severely impacted by the novel coronavirus.”

The sector comprises 69 companies that employ an estimated 43,000 workers or approximately  3% of Jamaica’s employed labor force. BPO has, over the last two years, played a pivotal role in boosting youth employment.

An April 2020 survey conducted by the Global Services Association of Jamaica, representing 54 of the registered companies, has revealed a fallout of 6,485 workers,  laid-off [furloughed] for up to 120 days due to the downturn in business since the COVID-19 pandemic.

The MLSS reported that workers who are laid-off in some instances are re-engaged on a rotational basis and receive 60-80 percent of salary and maintain other benefits, including health.

Roberts Risden told Nearshore Americas, “this strategy is following the Employment Termination and Redundancy Payments Act. The labor legislation does not require notice or payment in lieu of notice for workers that have been laid-off.”

Employers have been advised that workers may voluntarily apply for vacation leave; it, however, constitutes a breach of the Holidays with Pay Order, where workers are mandated to take vacation leave as a strategy to reduce the real numbers at the worksite, Roberts Risden said.

Another factor is whether client organization agree to permit work from home at all. Some clients have security requirements that cannot be met by workers, who must have their own, un-shared room to operate. This produces a risk to the protection of customer data, a key issue in managing work-from-home transitions.

On the matter of pay, one  call center agent explained, “Unfortunately I won’t be paid while at home. They told us that we had to use our vacation days, or we would not be paid. [But] If we want to use any sick days we have, then we would have to send in a sick note.”

The government has rolled out a social intervention program intended to cushion the impact for workers who have been laid off, however, for workers such as this, they will be unable to apply until their employment status is resolved. Meanwhile, they have no income.

Work-from-home Transition

Roberts Risden told Nearshore Americas that work-from-home arrangements were being pursued as a means of ensuring the continued viability of most companies and also to provide an income cushion for workers while reducing the numbers at the physical worksites.

Approximately 11,320 (31%) of the remaining workforce are involved in the work-from-home arrangement.

In early April, under the Disaster Risk Management Regulations, the Jamaican government mandated the closure of all non-essential work in the BPO sector, given the spread of the coronavirus at the Alorica center.

With this action underway, approximately 9,300 workers were left active in the sector,  according to data from the Global Services Association of Jamaica.

Roberts Risden notes that the companies that remain open presently provide support services for banking and finance, logistics, and healthcare include the COVID-19 hotline established by the Ministry of Health and Wellness.

BPO wages in Jamaica, as reported by workers to Nearshore Americas, range between US$2.50 per hour and the US $3.00 per hour. However, one worker who makes reservations for hotels in her role reported receiving J$17,000 weekly plus incentive (the equivalent of US$117.24).

Those who are still employed feel lucky. Another worker who has secured a job to work from home says she is optimistic, even though bonus payments attached to salary have been reduced.

“I’ve been working from home around a month now. It has its ups and downs. First, I’m still getting the same hourly rate. But as far as my bonus is concerned, it’s really harder to get it now,” she said.

“If you have power outages and the internet goes down, these are things which are outside of your control, but it affects my bonus and other persons too,” she added.

The worker added, “I think they make it look like it’s a  privilege for us to be working from home because we could have been laid off or lost our job, but the truth of it all, it’s really mentally stressful.”

Nearshore Americas spoke with one other worker who is in limbo, hoping to get an assignment to work from home. She has been home for a month with no pay. However, the company has allowed herself and other co-workers affected to keep a lunch card, which can be used at food stores. They also retain life and health insurance.

In Montego Bay, a worker who was furloughed for three months has been trying unsuccessfully to get a job working from home. She bought a lap-top on hire purchase in anticipation of securing employment. However, she remains without a job since being laid off on March 10.

Robert Risden, at the  Ministry of Labour and Social Security, said the Ministry continues to monitor the labor-related issues of this sector and encourages the continued cooperation of all stakeholders as the industry implements its recovery strategy.

BPO firms, from their side, are noting that mitigation strategies are adding to increased operational costs.

Jimmy Griffiths, Vice President and CFO, Advanced Call Center Technologies

Jimmy Griffiths, Vice President and CFO, Advanced Call Center Technologies, LLC (ACT), told Nearshore Americas, “Since the beginning of the crisis, the company estimates the incremental expenditures directly related to addressing the crisis is approximately $1 Million USD.

“These costs include additional payroll/transportation costs due to curfews and shutdowns, additional staffing and cleaning related supplies and investment in the technology and related licensing cost to convert qualified agents to a remote working environment.”

ACT provides outsourced customer service solutions to significant telecom and financial service companies.  The company currently has approximately 5,500 employees and operates through 14 facilities in the United States, Jamaica, and Guatemala.

Among the current challenges under COVID in Jamaica, he said, is the effort to “work with our clients to manage volume with reduced staff to 30 percent onsite based upon the curfew hours and related government restrictions.”

There is also the challenge of working with clients and internal teams to implement remote connectivity to allow those agents with adequate home internet connections to work from the remote environment.

Disinfecting and Social Distancing

Finally, the company is challenged by the work involved in implementing all of the necessary COVID-19 defense procedures, from a disinfecting and social distancing perspective for both onsite location and transportation partners.

These included (i) increasing cleaning crew by 300 percent for hourly cleaning throughout the site; (ii) maintaining enough supplies for the employees such as masks, hand sanitizer and meeting social distancing requirements; and (ii) monitoring throughout the day for arrivals, breaks/lunches and meeting additional transportation requirements for those allowed to work onsite.

Griffiths said he believed the government of Jamaica has focused on working together with the BPO companies “to keep agents employed and keep them safe at the same time.  We have been very impressed with how the government is handling this crisis.”

For ACT, the continued negative impact on revenue is due to limited staffing. “Only 25 percent of our staff is allowed to work onsite and 25 percent working from home due to internet limitations.  Therefore our operations are currently generating revenue at approximately 50 percent of pre-crisis levels,” Griffiths stated.

One-quarter of staff have been left out of work arrangements due to limited internet availability, or their service does not meet minimum requirements of system connectivity.

Griffiths said wages had been adjusted under COVID conditions, noting, “We are providing a monetary incentive plus their base pay for those coming into the call center. No employees were laid off.”

He said that for workers who have been furloughed, they are currently receiving 50 percent of their pay or utilizing their paid time off.

“We are working very hard for those working on-site to keep our employees safe.  The Ministry has inspected our facilities many times and is extremely pleased with how we are handling the crisis,” Griffiths said.

Conduent, which has multiple locations in Jamaica, declined to discuss expenses attached to COVID conditions but reported to Nearshore Americas that the company has “taken extensive measures at all of our sites to keep employees safe, including implementing work from home where feasible, adjusting workspaces for social distancing where onsite presence is required and increasing the frequency of cleaning and sanitizing work locations.

The company added in an emailed response, “We have also modified operating hours, split and staggered shifts, assigned and spaced seating – all of which minimize the number of personnel at our facilities across Jamaica at any given time. Moreover, we are in compliance with guidelines and directives issued by the Government and local authorities.” From Jamaica, Conduent delivers mission-critical services and solutions to approximately 40 clients and the millions of end-users who count on them, management said in their response.

Conduent has more than 4,200 employees in Jamaica that are based at three locations –Kingston, Portmore, and five buildings in Montego Bay. Operations support the banking, insurance, healthcare, telecommunications, airline, and automotive industries. Approximately 45 percent of employees in Jamaica are now working from home.

“While some customer work requires onsite employee presence, we have put in place the infrastructure and processes to allow as many employees to work from home as possible while safeguarding those employees at our facilities,” Conduent reported.

Cliff Skelton, CEO of Conduent

Cliff Skelton, CEO of Conduent, said, “We remain focused on providing best-in-class delivery for our clients and their end-users while focusing on the health and safety of our 67,000 associates….Like many other companies, we are seeing an impact on our clients’ volumes and, thereby, our global operations as a result of COVID-19. We expect that lower volumes could impact 2020 in several of our businesses resulting in lower revenue and profit.”

For Alorica, the hardest hit BPO in Jamaica, the company has made a ‘multi-million dollar’ investment to deploy new equipment and scale technology for work-from-home, activated new procedures to protect employees, and managed the logistics of execution, said Alorica’s Chief Marketing Officer, Colson Hiller.

On total revenue impact, he answered, “We have not released any specific financial guidance, but we are experiencing a re-balancing of the portfolio, many clients are experiencing abnormally high volumes while others have seen reduced volume.”

Alorica reports that it has been able to convert more than 60 percent of its global workforce to work-from-home and more than 80 percent in North America within the past two months during COVID-19.

The company, which employs around 100,000 workers globally, provides a host of services—from customer care to financial solutions and digital services—to clients across industries of all kinds, many of whom are on the Fortune 500. Its contact centers and operation hubs span the globe with locations in 14 countries.

“The challenges [under COVID] have been similar to that of most organizations—ensuring that our employees have the equipment, connectivity, and training they need to work at home under these circumstances quickly. We have made every effort to provide them with what they need, so they can earn a living while staying home,” said Hiller.

Pay for workers had been increased based on demand for work-from-home and demand for more advanced skillsets that may have been done in captive centers in the past. “There is also a shift toward more work at home in the US, which carries higher wages than other markets,” he remarked.

Furloughs, Layoffs, and Clarifications

The Alorica executive said the company is trying to avoid permanent lay-offs and “have mainly moved some employees to a furlough type of arrangement (temporary suspension of their employment contract).

Colson Hillier, CMO at Alorica

Hillier noted, “As a matter of clarity, the term “furlough” is not always the correct terminology when we put an employee on a suspension status (temporary suspension of their employment contract, but without termination).”

He explained, “For example, furlough in Jamaica is called a lay-off, while in most of the other countries in LATAM it is just called a contract suspension. We have had to put employees on “lay-off” in Jamaica, but again we are referring to a temporary suspension of their employment contract. It’s a small population of our workforce that we’ve had to put on this temporary hold and only in some countries we operate. The period varies, but on average we have given notice to employees that we’re anticipating a four to eight week period.”

He said many employees were given the option to receive pay during their furlough through their accrued vacation days and other leave to which they are entitled.

“In some sites/countries, we have provided some level of salary continuation for those unable to work while we continued our WAH efforts. We have also committed to covering health insurance benefits while employees are on furlough,” Hiller said.

Yoni Epstein, founding chairman and CEO of Itelbpo, said the company has had to lay off about 400 employees temporarily, “but they will start coming back to work in the coming weeks as they have been moved from our travel accounts to other clients.”

Yoni Epstein, Founder and CEO of Itelpbo

“Getting 1,100 team members used to work at home has been tough. Lastly, the government has been doing a tremendous job in my eyes, but they have to make decisions in order to protect the nation even if they aren’t the most favored. However, they’ve done a stellar job,” Epstein told Nearshore Americas, addressing the challenges of the Jamaican situation.

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Itelbpo has offices in Kingston, Montego Bay, and in the Bahamas. The company provides services to many industries, but the ones that have been considered essential are telecommunications, utilities, healthcare, banking & financial services, and logistics, the CEO outlined. Just over 2000 employees work in these segments.

Epstein said the company’s expenditures have risen on the side of cleaning and sanitation, electricity costs, and transportation costs.

“This has significantly affected our P&L, but right now it’s about preserving jobs,” he commented. “So far, we’ve seen a drop in revenues of about 25 percent, but that reduces to about 15 percent in the months to come, and we don’t see that getting back to normal until the end of the year.”

Some 1,100 of  2,100  staff have been shifted to work from home in Jamaica.

The CEO said the challenges have been “the speed in which we had to do it, with agents forced to getting used to not having support right there,  and problems of internet stability & power stability.”

However, he said, after an agent has been home for 2-3 weeks, “we see the curve back to stronger productivity happen.”

Itelbpo has carried reductions in salary for support staff  and upper management “in order to account for the challenges of the times,” Epstein said, but, he states, “we aren’t reducing frontline employee salaries.”

He notes that while the BPO firm has laid off about 400 employees,  there are training schedules that will get most back to work in May and the rest in June.

Epstein said all team members laid off to continue to receive their benefits, and some have decided to use vacation time.  “Managing this crisis has been tough for the entire team, but they’ve come together stronger than ever, and we will come out of this a much more powerful organization,” Epstein added.

View from the BPIAJ

Gloria Henry, President of the BPIAJ reported that among the most significant challenges posed by the spread of COVID-19  to industry members were the sudden implementation of GOJ restrictions and the stigma which came about because of one workplace infection (there are some reports of taxi drivers refusing to carry BPO workers following the Alorica expose, while other segments of society have been calling for BPO to be shuttered).

Gloria Henry, President of the Business Process Industry Association of Jamaica

The Jamaican government, however, she notes has been supportive throughout. “The Ministry of Health was involved with the Association very early and has been very helpful.  The Prime Minister has been very responsive and supportive.”

The association head said expenditure relating to crisis management, for the sector, ranges from 25 percent – 50 percent of general facilities management cost. “Some persons have CAPEX cost as well to purchase new equipment for work-at-home of up to US$500,000,” she also stated.

For sector members projected revenue fallout because of COVID  ranges from 20 percent to 50 percent decline in projected revenues for 2020, the BPIAJ head said.

Henry sees work-from-home as a process that is still in a development phase, with about 12,000 workers now engaged. She was slowed by the effort to get approvals to move out of the Special Economic Zone where most BPO firms operate and the need to get client approvals (to allow work at home) took some time; as well as extensive efforts to comply with Ministry of Health stipulations.

As regards changes to worker’s pay under COVID conditions, Henry said, “Only marginal adjustments were made, mainly for management and executive staff.” She said that due to the temporary lockdown in St. Catherine, many non-essential workers had been laid off for the two weeks – about 45 percent of the workforce for 14 days.

Avia Ustanny-Collinder

Avia Ustanny-Collinder is a senior editor at Nearshore Americas and an award-winning business journalist residing in St. Catherine, Jamaica.

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