As global BPO giant Sitel advances its presence in the Nearshore region, the challenges of managing distinct local differences in the region’s many countries become much greater, particularly when it comes to talent availability and ease of doing business.
In this one-on-one interview, Raul Navarro, Sitel’s Chief Operating Officer – Americas, shares his view on two juxtaposed countries, Colombia and Brazil, shedding light on how each nation’s challenges are impacting the company’s strategies and the BPO industry in general.
Nearshore Americas: Considering Colombia’s reputation for limited English talent, how does Sitel view the market, and what steps is the company taking to address this?
Raul Navarro: Sitel is the most tenured BPO player in the Colombia marketplace, first arriving back in 2010. We’re serving 15 different clients with around 1,500 English-speaking agents. We’ve also shifted from a local Colombia approach to focusing completely on US nearshore, making it like our Nicaragua, Panama, and Mexico locations – management and support is 100% English language.
We do this by design: our year over year growth is around 12% and Nearshore is roughly a US$2 billion market we have targeted and want to be in. We’ve always felt that you have to be at the high end of the market. You have to be a premium player, run your “people first” initiates, care for your people, and keep it fun. That drives a good outcome. The key is making sure that when clients query your price point, you justify it with your high-end position, which enables you to attract the people and retain them.
We currently have two sites in Bogota and one new site in Cali, which has 100 English speakers working with a client in the financial sector. This client is impressed with the service and wants to ante up for additional growth.
Colombia is a competitive market, no doubt about it. Many of the Latin America “pure play” competitors have seen the strength of the market, so whether the focus is English or US Hispanic, it’s a good market from all perspectives. You’ve got to have internal initiatives and good connections with country agencies to make use of additional pipelines for English.
There are great government programs for English, which, combined with our FLIP (Foreign Language Improvement Programs) initiatives, will get people trained to proficiency. If someone is just short of the standard, then we train them up and hire them, again driving retention and loyalty.
Nearshore Americas: How is Cali positioned to become a stronger location for higher value BPO services?
Raul Navarro: The provision of higher value services needs to be proven in Cali. The city was an enormous banking area, and there are still a number of solvent banks there. It’s a highly educated area too and the educational infrastructure remained strong, despite a short drop off caused by the government.
Even so, the first client we have in Cali is an accounts receivable management (ARM) client, and the site leader is licensed and registered to handle US state interactions in this field. So our first impression is that, yes, it can support more sophisticated or specialized work. It’s early for us, but we see potential.
Nearshore Americas: Shifting the focus to Brazil, what’s the current status for BPO on the ground? What is Sitel’s position in the market?
Raul Navarro: Brazil’s in a holding pattern until it can alleviate some of the economic and political concerns, which are the big issues for BPO. A negative GDP for the last four years and a critical level of unemployment has created a situation where there is very little recovery in sight, which affects all your clients. In our situation, we had a number of consumer products clients, and if they’re not selling products they’re not servicing.
There are also a lot of discussions on taxes. There have been some new tax burdens that have been passed that are affecting the BPO industry, which is clearly impacting the profitability of virtually every BPO company.
Even so, it’s a strong consumer market. The mega trend will come when they get organized and solidify their leadership with the elections, having a leader that is more focused on business, the economy, and reducing corruption, then the country could quickly recover.
Nearshore Americas: Does that level of unemployment and talent availability in the country not benefit the BPO industry? How is Sitel leveraging this?
Raul Navarro: While I was there for six years, unemployment was very low, so it was hard to find folks for specific positions. Today, the Brazilian skill sets and capabilities are almost outmatched in Latin America, especially in IT and high-end BPO, so you can find whatever you need. I suspect it’s very easy to recruit management positions.
It will never be an English-language support front. The beauty of the Brazilian culture is that it’s fairly insulated – no-one feels compelled to learn English. In other nations, people understand that you can double your personal economic value by just learning English, but in Brazil that necessity doesn’t exist.
Having said that, here are a ton of entries like Netflix, Apple, and Uber that have blossomed down there. US companies have gone down there, but largely as domestic business. I used to run Latin America in my role, but Brazil always stood on its own. As we picked up the Americas, our primary focus was on Nearshore, so we broke off the Brazilian organization for that reason.
We learned very quickly that we don’t want to be in the high transactional area in Brazil, like some of the telcos, as the volumes and risks are massive. The big transactional companies are going to get hurt; the people on the low-end, low margin side of the business, will stand to lose out. We have positioned ourselves with higher skill sets, so we do a lot of tech support and credit card and high-end billing support, giving us a nice position. The hiring will fall into place as the country remains in this deep unemployment situation.