Santo Domingo’s Strengths Outweigh Talent, Legal Drawbacks

Santo Domingo was the first European settlement in the Americas, and since the days of Columbus it has grown to become the largest city in the Caribbean. In recent years, development has continued, with the past decade witnessing the capital of a country best known to people in the United States for tourism and baseball transform into a destination for IT services, BPO, and call centers.

The biggest draw of Santo Domingo, a city with a metro area of nearly 3 million people, is its large population of high-level English speakers. This was the decisive factor that drove Thomas Oronti, CEO of Nearshore Call Center Services, to set up his call center in the city nearly 10 years ago. “The reason we chose Santo Domingo over places like El Salvador, Jamaica, and Costa Rica was due to the high quality of English that is available,” said Oronti.

His call center has 3,200 seats in the city and does a little bit of everything — customer service, technical support, sales, lead generation, and collections. And outside of Belize, there is nowhere in Latin America that offers better English speakers. “We have some clients that are very specific about accents and we can give them agents with no accents,” said Oronti. “They sound just like an American.”

He says that this is leading to a boom in medical translation services, which even more people can do. Many people he interviews end up failing the final, verbal test since they are not fluent enough to handle calls. But they can read and write very well, so the translation area is perfect for them.

Santo Domingo’s Ties to the United States

What makes the Dominican Republic unique is incredibly close ties to its northern neighbor. Despite the nation only having a population of 10 million, nearly 1 million Dominicans live in the United States. As a percentage of the population, this gives it an even deeper cultural affinity than Mexico can offer. Almost everyone in the capital has family or close friends living in Florida or the Northeast, with New York being a Mecca for immigration. In the early 2000s — when Dominican baseball stars Pedro Martinez, Manny Ramirez, and David Ortiz all played for the Red Sox — the Dominican-dominated neighborhood of Washington Heights featured more Boston hats than the familiar Yankee caps seen throughout the rest of the city.

“People are basically immersed in the U.S. culture.” – Henri Sas, president of business development at Teleperformance

After software developer Intellisys, which is based in Santiago a few hours outside of the capital, beat out an Argentine company for a contract, the client told CEO Christian Corcino that it was because of these close ties. The company’s two biggest clients, media giants CondeNast and Hearst Corporation, are both in New York and this is true of many of his partners. This is in part due to Corcino’s personal business relationships — he lived in NYC for 16 years — but it also speaks to the incredibly close cultural affinity between the D.R. and the city.

He thinks it is a big reason that the whole nation, not just Santo Domingo, is taking off as an IT location. “We have been sold out for the past three years,” said Corcino. “We get new clients but we have to hire new people. I don’t know if that means we’re good. But the market is pretty hot right now. Even an idiot could get hired.”

Teleperformance also sees the benefits of the nation’s ties to the United States. “In the areas of customer care and technical support, we definitely feel very comfortable that higher levels of complexity can be handled in the D.R., especially because the cultural affinity is very strong with the U.S. market,” said Henri J. Sas, president of business development at Teleperformance.

It’s not only all of the Dominicans who have lived in the United States or have family there. He cites the number of Dominicans playing Major League Baseball as one indicator as well as the general familiarity with U.S. movies, television shows, and general way of life. “People are basically immersed in the U.S. culture,” said Sas. “Especially when it comes to a voice call, when you’re trying to relate to the person who is calling in with an issue, it’s particularly strong in the D.R.”

The Struggle to Find Managers and Programmers

Teleperformance, which already had extensive operations in Mexico, Colombia, Central America, and Jamaica, entered the Dominican Republic in 2012. It has been a great market for the company, which has more than 1,000 employees there doing customer care and related work in verticals including transportation, logistics, wireless carriers, and healthcare. Sas praises the city for its good education, skilled young population, and dedicated workforce, which sees the company as “an employer of choice in the market.” This is a big reason that nearly 50% of the office’s workers come from employee referrals.

The company has had trouble finding mid-management-level talent, however. The company has had to bring outside workers in — from Mexico or Costa Rica — or spend a lot of time and money on training. Overall, they transferred around 30 managers from other locations, and Sas recognizes that if the company wasn’t already a major player in the Latin American market since 1996, this challenge would have made it very difficult to get operations running smoothly and quickly. “For companies that do not have that [advantage], the level of mid-management talent in the outsourcing arena is probably a challenge. You definitely have to be able to build the level of management talent to support the programs the right way.”

“If you are looking for bilingual programmers, Dominican Republic is definitely not the place to go.” – Thomas Oronti, CEO of Nearshore Call Center Services

Finding programmers can also be difficult. It took Oronti a long time to find and develop the few programmers that work in his company. He is very happy with his employees, but overall he does see the market being held back by the lack of passion for the craft in the Dominican Republic. “Programming is not a 9-to-5 job, and here they try to make it into a 9-to-5 job,” said Oronti.

One close friend of Oronti who runs shops with more than 100 programmers in New York and India tried to set up a business in Santo Domingo. But despite searching far and wide, he could never find enough talent to make the venture worthwhile. “He just wanted 25 to 30 high-level programmers, and he gave up after two years,” said Oronti. “You can find good programmers but not in volume — and not bilingual. If you are looking for bilingual programmers, Dominican Republic is definitely not the place to go unless you’re happy with only 5 to 10. Maybe in 10 years time it will be different.”

The Dominican Republic’s “Antiquated” Labor Laws

The labor laws are an even bigger problem for Oronti. “It’s still antiquated here,” he said. “There are a lot of countries in South America now that are changing and becoming more pro-business. But that is not going to happen for another year, at least, over here. That’s political suicide, supposedly, to try to change the labor codes, and they are not really conducive to something like call centers.”

He says this wouldn’t matter as much in an industry with lower labor costs, like manufacturing, but it has been a major hurdle for Nearshore Call Center Services, which can spend some $2,500 to lay off an agent that has been working at the firm for less than two years. Then there is always the potential of going to court over a termination, and the results are never predictable. He says that they have had cases that couldn’t be clearer — multiple, documented no-shows in one month in violation of the employee’s contract, for example — in which one judge will rule differently than another despite all the facts being the same.

It is so bad that, despite all the potential work in the city, he is no longer pushing to expand any further. “That’s the most frustrating aspect,” said Oronti. “We’re not looking to grow anymore in Santo Domingo mainly because of that…I’ve not come across worse labor laws aside from Brazil.”

Santo Domingo’s Bright Future for Investment

Steven Ferber, managing partner of Golden Gate BPO Solutions, sees way more positives than negatives in the city. He has been able to find SQL developers and Microsoft-certified programmers to do BPO work and says “you don’t get any better English in Latin America.” He also loves the large population of Santo Domingo for its wide array of age and education profiles. And the cultural affinity is so high that he says you can even find Americans, who may be living in the capital because their husband or wife is Dominican, sometimes working in call centers.

“The market is pretty hot right now. Even an idiot could get hired.” – Christian Corcino, CEO of Intellysis

But he does admit that this can have some drawbacks as well since the population can be so transient. “You have a lot of people coming in and coming out and then spending six months in New York and then coming back,” said Ferber. “And when people want to get a job, they’re not going to say they are about to go back to New York in six months. So you’ll have a lot of attrition.”

Still, the downside of that reality is more than made up for by all the other benefits in his eyes. Santo Domingo is a great place to work and has the talent to get great results.

Teleperformance is very happy it entered the market and only plans to put down deeper roots. “We’re definitely looking to increase our investments in the Dominican Republic,” said Sas. “It’s definitely a market that will continue to grow. The clients really like traveling to the location, and it delivers very high quality.”