Jamaica ranked 13th out of 17 most popular outsourcing countries

With Jamaica ranked 13th among a field of 17 of the most popular outsourcing countries in the 2022 Offshore BPO Confidence Index, one of the nation’s leading players has mixed views about the assessment, adding that there is not much room for further expansion given the size of the island.

The index, a collaborative research study by business process outsourcing (BPO) consulting firm Ryan Strategic Advisory and editorial outfit Cognitive Copy, assessed the views of 158 country managers in 17 offshore and nearshore locations on the environment from which they deliver their services. The assessment was done under six categories: local labour market, infrastructure, commercial property, BPO ecosystem, political stability, public security, and economic stability.

Jamaica was the only English-speaking nation among the countries, with the others being Bulgaria, Colombia, Egypt, El Salvador, Honduras, India, Mexico, Nicaragua, the Philippines, Poland, Dominican Republic, Guatemala, Romania, Serbia, the Czech Republic, and South Africa.

To calculate the confidence rating for each country, the researchers combined the accumulated points to deduce an average score for each category and the overall ranking.

Yoni Epstein, CEO and chairman of itel/Outsourcing Management Limited, believes a 13th-place ranking for a nation of Jamaica’s size is fair.

“I am not surprised where Jamaica ranks among the countries that were assessed,” Epstein said. “Jamaica is a small country. We have three million people and we are well positioned as an English-speaking country, but when you tap us up against the Philippines, India, South Africa, Colombia, and all the others, we are actually the smallest population among the 17.”

He further reasoned that while a ranking of 13 out of 17 may not seem impressive, “I think we look strong as a small nation to be even mentioned”.

“A 74.2 per cent confidence rating is a strong indicator as to why we have been successful, but what it says to me is that we do not have a ton more room [for improvement], so we need to look at expanding the workforce as well as being more efficient, profitable and unparalleled in service delivery,” Epstein told The Sunday Gleaner.

‘WE HAVE MANAGEDFAIRLY WELL’

The 2022 index noted that BPO managers have high confidence in the countries where the industry has been flourishing for the past two decades, but noted that several emerging locations were jostling for leading positions. Length of service, it added, was not necessarily a determinant of success. South Africa made a strong entry as a new contender in sixth place, above the Philippines, Romania, and Mexico.

Colombia emerged on top on the confidence index, placing in the top five of all categories. The once-dominant India, the Dominican Republic, Czech Republic, and Poland rounded out the top five.

Jamaica’s highest placing was eighth under two categories – BPO ecosystem (79.2 per cent) and political stability (70.3 per cent).

“Jamaica enjoys one of the most committed investment promotion agencies in the Americas. Jamaica Promotions Corporation (JAMPRO) and the Global Services Association of Jamaica (GSAJ) have nursed the development of the BPO industry over the past decade through a combination of lobbying to ensure agreeable government regulation and data collection,” the report noted.

According to the review, Jamaican politics ensures a baseline of political stability, “but, in the past year, rumbles that the nation could officially leave the Commonwealth have brought a degree of concern about the long-term implications for trade ties with Britain and Canada, among other nations”.

The lowest ranking for Jamaica was 14th place in the categories of Economic Stability (64.5 per cent) and Commercial Property (71.0 per cent).

“I think in Economic Stability, we should be a lot higher and stronger than 14th place, and I believe it is more a lack of understanding on the part of the respondents to what Jamaica has achieved,” said Epstein. “Coming out of the [COVID-19] pandemic, all countries were faced with high inflation and we have managed that fairly well and we continue to see growth as a nation, so I cannot agree.”

Jamaica ranked 12th for Public Security (72.5 per cent), while it was 13th in Local Labour Market (73.3 per cent) and Infrastructure (80.8 per cent).

“With public safety, we have two types of situations that burden and hinder the country,” Epstein said. “There is the overall crime situation, but the more re-emerging one that continues to be a bugbear in this country and plague this industry is lottery scamming.”

COST A KEY FACTOR

Epstein noted that cost is a key factor for investors and could drive business to competing locations.

“We are in a mature state. We have gone from 12,000 [employees in the sector] in 2012 to 56,000, and we have seen significant facilities built out in Montego Bay and the Corporate Area, but facilities being built out are very expensive when compared to other markets,” the itel/Outsourcing Management Limited boss told The Sunday Gleaner.

“Specifically, facility rental cost in Jamaica is at the upper end as to what landlords provide and what lessees pay when compared to other top destinations,” he reasoned. “The Government has done a phenomenal job by allowing developers to access relatively cheap capital to lessen the risk in building these facilities, but at the same time, we are not as competitive as a price per square foot as in Central and Latin America.”

“If you are investing in a country, the question is how large is the scale, how large can you build and how soon will I be able to see some returns on my investment?” he said.

Nevertheless, Epstein sees Commercial Property at a 71.0 per cent confidence level as a just assessment, especially when compared with the high-rise facilities and millions of square feet of space in the major cities of other locations.

SIZE MATTERS

North America, with a population of more than 300 million, is the main source of business for the outsourcing sector, but while Jamaica is popular as a nearshore destination and is the only English-speaking nation among the top 17, because of its size, it does not have much room for further expansion, allowing other nations a greater portion of the business.

Epstein – who has grown his local operation from seven workers in 2012 to employing hundreds across locations in St Lucia, Honduras, Belize, Guyana, Colombia, and the United States – argued that size matters.

“For example, there are 250,000 jobs in the Colombia BPO sector, but only 35,000 are English-speaking; the rest are Spanish. So, Jamaica will never be able to compete with Colombia,” he said.

The report acknowledged that Jamaica enjoys the largest native English-speaking workforce in the American nearshore. But it said that recently, there have been whispers that this fundamental strength is giving way to saturation. Moreover, one respondent noted that the island’s universities offer limited options for BPO-oriented professionals, resulting in challenges finding supervisors and mid-level managers.

“We were touted over the years as one of the most productive industries, but a lot of things coming out of COVID have changed, and a part of my estimation why employment is so low is because productivity is low,” said Epstein, who recently ordered most of his staff back in-house, with only high performers allowed to work from home.

He identified a high rate of sick time, absenteeism, and constant lateness among the counterproductive behaviours seen.

But while he expects that other BPO locations will emerge in the region, he does not expect them to become influential players in the sector, because of their size and scale. Neither does he foresee a flood of new investors for Jamaica, but believes that there will be a few acquisitions of current operations.

mark.titus@gleanerjm.com

Offshore BPO Confidence Index 2022 overall rankings

1. Colombia – 85.1%

2. India – 85.0%

3. Dominican Republic – 82.7%

4. Czech Republic – 80.7%

5. Poland – 80.5%

6. South Africa – 80.3%

7. Philippines – 79.7%

8. Romania – 79.4%

9. El Salvador – 78.0%

10. Mexico – 77.2%

11. Egypt – 75.9%

12. Honduras – 74.3%

13. Jamaica – 74.2%

14. Serbia – 73.6%

15. Guatemala – 72.6%

16. Bulgaria – 69.5%

17. Nicaragua – 65.1%