By Tarun GeorgeSince locating to Nicaragua in 2008, Sitel has aggressively ramped up its delivery centers and employee numbers in the capital city of Managua. In Part two of this special Q&A, Mel Vance, Sitel’s Senior VP for Central America, lays out his plans for a large scale hiring spree in the country starting with the addition of 450 more seats last month. However, high level English proficiency will become an issue in coming years. Read on for more.
Why did Sitel pick Nicaragua over all the surrounding countries? Why are you continuing to expand in the country?
Vance – In this case it was actually client demand for the location. Sitel doesn’t build facilities in an area and then bring clients there; instead we always build new facilities with specific clients in mind. This was a request from one of our banking clients to go into Nicaragua. Around three years ago is when we first entered into the market, and we didn’t know to what extent we wanted to grow in Nicaragua. So we went in under a joint venture through a sliding scale partnership. That partnership has been so successful that we’ve now gone out and built our own facility which is twice the size. It’s been nothing but green lights in Nicaragua so far.
It was mainly that client’s request that pushed us in here, but when you look at other factors like the growing GDP, English proficient workforce, low cost of infrastructure, etc, Nicaragua really does make sense as a destination.
High caliber English is definitely something that needs to be produced in larger numbers. There’s already a lot here and it does exist, but I’m talking in terms of sustainability over the coming years.
You’ve got about 3000 agents in Nicaragua with the new center. What are your plans for the country? Are you looking at further expansion in the near future?
Vance – We’re certainly looking at further expansion in terms of employee numbers. One of our buildings (our first entry point in Nicaragua) is an eight-storey tower and we occupy one floor with around 1000 workers. We’re in discussions over whether to take over another floor. But our main emphasis is now on our newest location in Managua, which is an embassy building in the old US embassy compound. There are actually a series of buildings there that we’ve converted over.
From a Nicaragua footprint standpoint, it doesn’t make sense for us to move into new separate facilities. But right now we have ample coverage across Managua, and our recruitment parties are attracting people throughout the country. So we’re going to be ramping up hiring, and we’re shooting for the 5000 mark right now.
Are you looking at regional expansion outside Nicaragua in the coming year?
Vance – For the moment we’re sticking to Nicaragua, simply because it offers us the best deal in the region. On the Caribbean side what we’re finding is that the English has a harder accent than what we would like, while for many of the surrounding Central American countries, the infrastructure is just not where we need it to be.
That being said, we do send teams out into the region to recruit talent.
What are the challenges you’re facing in Nicaragua? What must the country overcome to be a better sourcing destination?
Vance – High caliber English is definitely something that needs to be produced in larger numbers. There’s already a lot here and it does exist, but I’m talking in terms of sustainability over the coming years. It’s estimated that around two or three thousand students are graduating from universities on an annualized basis. That’s enough for two, possibly three, of the major call center providers located here. However as the market becomes more saturated and additional competitors come in, it becomes more difficult to find that skilled English proficient labor.
What’s going on here is similar to what the Philippines experienced a few years ago. I spent some time there when the industry was in its infancy, and they did a very good job of centralizing everything with the Department of Education, offering scholarships, having call center focused training curriculums, etc. These are things that we’ve suggested to ProNicaragua, and they’re now slowly implementing those programs.
Have you had difficulty finding that high caliber English labor yet in Nicaragua? Are there any hints of workforce saturation?
Vance – For now we’ve had zero issues, but we’re concerned about a year to two years down the road as we do our projections. The advantage we have is that we were one of the first into the market here, so we’ve been able to develop a good relationship with the workforce demographics that we’re after, which helps with hiring.
We’re constantly being asked for high value Tier 1 and Tier 2 technical support work, which we’re able to find in small numbers, but when you get into Tier 3 and Tier 4 work, then you really have a hard time finding that skill set with the English fluency that the client is expecting. So from a future growth standpoint, it’s important to maintain and enhance the training programs that they have here to supply the industry’s demand. I think there will be scalability issues in future if ProNicaragua and the government don’t change things, but for now we haven’t had any problems.
Take a look at Part One of this Q&A where Mel Vance discusses the impact of labor unions and Daniel Ortega’s government on call center outsourcing in Nicaragua.