Pereira’s Perils on the Way to Call Center ‘Promised Land’

By Patrick Haller

Positioned in Colombia’s lush Coffee Triangle region, the city of Pereira has been called “Paradise.”

However, it has probably not seemed that way to some of the local population. In 2009 the city was hit by the highest unemployment in the nation at 24%, despite being home to a Suzuki motorbike plant, Busscor (the main manufacturer of vehicles for Colombian mass transit systems), textile plants and, of course, coffee production. As a possible remedy to that situation, the government of Pereira – like that of its smaller sister-city Manizales – has created a stream of incentives to attract IT companies and call centers.

Starting with Spanish call center Telmark, which established operations there in 2009, the BPO sector has begun to take root, employing 2,000 people from the burgeoning metro area of an estimated one million residents, according to Santiago Angel Jaramillo, Director of Invest in Pereira (IIP). With an average age falling between 25 and 35 years old, a respected higher education system that currently serves 37,000 students, low operational costs, solid infrastructure, and an eager workforce, Pereira would appear to be paradise for call centers.

In addition to the government offering attractive financial incentives such as property tax deductions, waiving of the Industry and Commerce tax for a ten-year period (if certain criteria are met), and employee training credits, Jaramillo points out, the World Bank ranked Pereira as one of the easiest Colombian cities to do business in.

Those are all indicators of a potential outsourcing paradise, but if the location lures more providers, fully bilingual English-Spanish workers are in danger of becoming scarce. Local IT professionals are already in short supply.

English Is a Must

As more companies such as American Assist (formed in Mexico 20 years ago to provide emergency assistance to travelers) show an interest in Pereira, bilingual capability has become an urgent issue. “We have to set up the right strategy to provide the BPO sector with bilingual talent,” Jaramillo says. Part of this strategy is working hand-in-hand with the companies in order to understand their specific needs. IIP is partnering with public schools in order to improve English education at the primary level, and universities to develop specialized courses. “Most investors for call centers need to receive special training depending on the operation (outbound, in-bound, etc.),” Jaramillo says. “SENA normally works on this and we tailor-make the program to meet the investor’s needs.”

The majority of universities in Pereira, including the University Tecnologia de Pereira, considered one of the best in Colombia, already require students to be fluent in English in order to graduate, Jaramillo says. IIP is also studying policies established by other investment agencies like Invest in Bogota, which implemented the Talk to the World program, and ProBarranquilla, which links public schools with the BPOs that work in English to provide intense language training. Jaramillo says that IIP has recently confirmed that a new ITO and a call center have committed to establishing centers in Pereira.

The outsourcing services in Pereira also include IT development and website design. One example: With a staff of 250 (and a target to scale up to 400), UK-based Yell Adworks builds 2,000 websites daily, in addition to ads for yellow pages.

Pereira is open to foreign workers, and has an international population that includes people from North America, Japan, Spain, Venezuela, Mexico, and the UK. Around 1988, the city saw an emigration of its citizens due to the increased violence in the region and the majority of Pereirans went to the Northeast US and Spain. Now, as the economic tides turn, Pereira – and Colombia in general – is seeing a return of those people or their children who have been educated abroad.

Group Effort

American Assist, which has offices in 18 countries, including across Latin America, changed its operation model two years ago when it closed its individual country headquarters and consolidated. An Argentine firm that specializes in call center functions did a study of several countries and advised American Assist to create its new center in Colombia. “Once the decision was taken, we went through various cities in Colombia looking at the possibilities,” says Mauricio Vega, President of American Assist – Colombia, “and it coincided that the best location would be Pereira.”

An accord was signed by the Governor of Risaralda, the Mayor of Pereira, Invest in Pereira, the Chamber of Commerce, SENA, the Technical University of Pereira, ANDI and American Assist’s corporate managers. “Each of these parties brought something to the table,” Vega says. Among the incentives were tax exemptions and specialized training provided by the university and SENA. “An entire city made itself available for the international investment to take place,” says Vega. “One of the Argentine advisors said, ‘This is the promised land.’”

Today the company employs over 400 people in a telemarketing call center where they assist callers from the 18 countries in which American Assist has locations. The center operates out of a 3,500-square-meter building that was adapted to its specifications. Vega said there are plans to fill all 700 workstations and add 300 more by the end of 2012, and to possibly open a second location in Pereira in about four years. The costs are very different than those found in Bogota, and the building is located right next to a Megabus (mass transport) station, making it very convenient for employees.

Sourcing Employees

For now, qualified contact-center workers are available. “It was much easier than we thought to find qualified people,” Vega says. “We needed 20 people who were completely bilingual to attend to US callers and we found them very easily.” Being in a second-tier market also helps from a cost standpoint. “Given the high unemployment, compared to Bogota or Lima, we found qualified people at lower cost.” The talent pool and related costs enabled American Assist to start operations with 100 people and to scale-up from there.

Vega says he has found that the universities and the national training school, SENA, are good recruitment sources, in addition to traditional methods. Most favorably, SENA provides people who have already been trained in call center work. According to Vega, in Pereira the attrition is no higher than 5% whereas in other Colombian cities it is over 20%.

Connectivity and Competition

Connectivity is especially important for a company like American Assist that provides emergency services. Fortunately, Pereira has an extensive fiber-optic network and has redundancy set up in Lima.

“Finding expert technological personnel has been difficult,” says Vega, “but we found professionals from other cities who are happy to move to Pereira. There are no other problems that you wouldn’t find in other cities.”

That said, if more English-speaking call centers enter the market here, the competition for qualified candidates will heat up, putting the pressure on the primary schools and universities to increase their language curricula. The area would be smart to also boost its number of IT professionals, which are already in short supply. If there are not enough people, attrition rates will likely rise, and the ability to scale will be hindered further. Pereira needs to manage the growth of the call center sector carefully in order to avoid falling into a hole that would be difficult to climb out of.