The pandemic shook the foundations of global outsourcing. Market giants like the Philippines saw their total dominance falter, while minnows were given the opportunity to grow. Saint Lucia Prime Minister Allen Chastanet believes that the pandemic was a watershed moment for the outsourcing industry in the Caribbean nation.
“The coronavirus outbreak produced a big opportunity for us. The health protocols adopted in Saint Lucia worked well, particularly for call centers,” the PM told Nearshore Americas recently in an exclusive interview. “Jamaica struggled at the beginning of the pandemic and many companies wanted to diversify out of Jamaica and countries in Asia as well. At that point, we were able to leverage our previous success and things fell in place pretty quickly.”
Government’s Role in Growth Promotion
Even before Covid-19, the BPO industry was a a significant GDP contributor and employment creator in Saint Lucia, with companies including Itelbpo and Ojo Labs expanding their operations there recently.
But it wasn’t always this way.
In 2015, Saint Lucia had a youth unemployment rate of 50.91% . For Prime Minister Chastanet, this was a clear indication that the island’s government needed to be fully invested in job creation in the private sector.
“It was difficult to try to find an industry that young people would find appealing and would be successful at. A lot of younger people don’t want to get involved in the hospitality sector, they don’t want to repeat what their parents did and they’re looking for something new. The significant upsurge in mobile phones and new technology in Saint Lucia made BPO a good fit for us,” he said.
“If we’re going to fulfil our potential, it is about output per square mile” — Prime Minister Chastanet
Prime Minister Chastanet become personally involved in the development of various BPO operations in Saint Lucia. “I had the opportunity of meeting with David Rubin, who was the founder of Ojo Labs. I went to Austin at the beginning of Ojo and convinced them to start Ojo’s operation here in Saint Lucia. It was a clear success,” he said.
By attracting Ojo Labs, the Saint Lucian government was able to introduce the artificial intelligence (AI) sector in the island and strategically position it in the southern part of the country, which didn’t have previous developers at the time.
With the arrival of the pandemic, and the collapse of the island’s hospitality industry, the need to generate further economic diversification and correct latent shortcomings was brought into sharp focus.
For many years, conventional thinking around the BPO sector said that industry decision makers are not particularly attracted to countries with small populations. Saint Lucia, with an estimated total land area of 236 sq. miles and a population of just 183,627, is making progress to reverse those beliefs by boosting its workforce through the efficient use of its limited space.
As a part of this effort, the government has been rehabilitating old warehouses built during the 1970s and 1980s for the Caribbean Basin Initiative as offices for BPO operators.
The country’s large diaspora in places like Miami, Toronto or London presents a great opportunity to expand the talent pool
“If we’re going to fulfil our potential, it is about output per square mile. We had to find the way to monetize the potential in a limited space and call centers and outsourcing in general was a great place to begin. Relatively speaking, when we fix these old warehouses, it is a nominal capital investment for the state. There is an investment of a couple of million dollars to fix each one of these buildings. But then the buildings are now being used 24/7, like in the cases of Ojo or Itelbpo, and this is maximizing employment and space through the shift system,” said the prime minister.
The island is also trying to adapt its immigration policies to attract qualified workers. At the same time, the country’s large diaspora in places like Miami, Toronto or London presents a great opportunity to expand the talent pool.
“Young people are now anxious to come back home. We have to capitalize on that and make sure we have the right opportunities for them to come back to,” said Prime Minister Chastanet.
For Chastanet, the positive actions taken by BPO companies to maintain the environment and conditions to support employees during the Covid-19 pandemic has improved the public perception of the sector. Saint Lucia’s government is hopeful that this reputation, built on good salaries and career opportunities, will intrigue many Saint Lucians abroad to come back to the island.
The government is now looking to build more BPO centers to attract more business to various communities to Saint Lucia
“The salaries people are getting in the industry are comparable and perhaps better than those of the hospitality sector. Many people have taken the opportunity presented by Covid-19 to migrate from the hospitality sector. We’ve seen an extremely positive experience in Saint Lucia. Every single time that these companies open up a recruitment phase it ends up oversubscribed,” he said.
Second Look at Taxation
In the past, Saint Lucia has been criticized for not providing strong incentives for the BPO sector. More recently however, the government has been working to attract international jobs and facilitate investor entry into the island. An example of this is the Headquarters Act, introduced by the Chastanet administration, which helps facilitate companies setting up headquarter operations in Saint Lucia.
“We’re allowing companies to open up an international or regional services headquarters in Saint Lucia. They pay no corporate tax, no work permits required and their employees, foreigners and locals, don’t pay any personal income tax. We stole the model from Switzerland, where the UN has 40,000 people working in Geneva under those same circumstances,” the prime minister explained.
“We recognized that the BPO industry as a very vibrant sector and one that can contribute significantly to the economic development of our country” — Prime Minister Chastanet
Saint Lucia is looking for businesses that can generate greater output in a smaller space, and the country is ready to offer the right motivations. The PM believes there is greater potential down the road, and the government is now looking to build more BPO centers to attract more business to various communities in Saint Lucia.
“We’re looking to expand,” he said. “We recognized that the BPO industry as a very vibrant sector and one that can contribute significantly to the economic development of our country. The BPO industry is massively attractive to produce greater output per square mile.”