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A Nearshore Niche in Nicaragua
Two new call centers offer bilingual agents, lower operating costs, and closer-to-home comfort to U.S. companies.
For the rest of the July 2006 issue of CRM magazine please click here
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Good morning," says Kendra Bordas in her best American-accented English. "I'm calling from Q Pharmacy in San Antonio. May I speak to Ms. Cortez?" When the elderly Ms. Cortez comes on the line, she answers in her native Spanish. So Bordas, switching effortlessly into Spanish, politely reminds Ms. Cortez that it's time to refill her prescription for her cholesterol medication. Two minutes later, Bordas is calling Mr. Rodriguez in suburban Alamo Heights, TX, to inform him about an upcoming doctor's appointment. During the course of an average day, the cheerful, 21-year-old Bordas--who goes by the name Sandra because it's easier for Hispanics to pronounce--will make 150 such calls and receive 30. "Nobody ever asks me where I am," she said in a recent interview. "Most people assume we're in the doctor's office." Well, not exactly. Kendra Bordas has never been to Texas. The little blue cubicle she occupies from 8 a.m. to 5 p.m. every day is located about 1,430 miles southeast of San Antonio in a modern office complex in Managua, Nicaragua. Bordas, like her 102 coworkers at Almori S.A., sits in front of a double-screen computer, outfitted with a wireless headset and a photocopied map of San Antonio pinpointing the location of all eight Q Pharmacy outlets. Besides making appointments and reminding patients to refill their prescriptions, Almori employees also process data, collect payments from insurance companies, and push new products to their customers. Thanks to her bilingual skills, Bordas makes the equivalent of $520 a month--$800 a month with benefits. That's only a third of what her U.S. counterpart would earn doing the exact same thing, but still a great salary by Nicaraguan standards. "Getting a job in Nicaragua is hard, and I'm still a student," Bordas says. "It's a good job for someone without a degree. They don't make me stay after work, and I get to practice my English." A recent report states that about 21,000 people now work in call centers in Central America. Critics in the U.S. see these call center operations as some of the magnets that lure jobs away from America. In dirt-poor Nicaragua, however, they often mean the difference between poverty and prosperity. "You have qualified people here who can give you the levels of productivity you need," says Alvaro Montealegre, founder and president of Almori S.A. "The people doing these jobs have a higher level of education [than their counterparts in the States], but because of the job market here, they're more hungry."
Indeed, young women like Bordas represent the newest economic hope for Nicaragua, which aims to have at least 3,000 call center employees over the next three years, up from only 500 today. These jobs are like gold for Nicaragua, which suffered a devastating earthquake in 1972, and a 1979 revolution that kept the country in the economic doldrums for years and forced thousands of people into exile in the U.S. But that exile also created a large class of bilingual professionals. And unlike the 2 million refugees from El Salvador who fled to U.S. shores during the 1980s to escape that country's civil war, the 700,000 or so Nicaraguan exiles were for the most part better educated and from high-income families. Many have since returned to Nicaragua with their families and are looking for work. And despite continuing problems like endemic corruption, political bickering, and rampant unemployment, optimism seems to prevail, fueled by Nicaragua's 4 percent economic growth rate last year and its 5.1 percent GDP growth in 2004, the highest in Central America. "We have high expectations," says the country's ambassador to the U.S., Salvador Stadthagen. "We could have tens of thousands of people working in call centers within a couple of years. And we are committed to bringing this type of business to Nicaragua, because it is strategic." On May 3, President Enrique Bolanos and other Nicaraguan dignitaries inaugurated Contact Center, a $3.8 million venture that ranks as the country's largest call center. Stadthagen says that under Nicaraguan law, the country must invest 6 percent of its annual budget in higher education. "Our university system is inefficient, but it has turned out 100,000 young graduates who would like to find decent jobs," he says. "Even though it's not equivalent to a bachelor's degree in the States, it's more than high school, and these people are very trainable. They have the basic skills, and they'd be perfect for the call centers." Roger Pena is president and founder of San Francisco--based GVSource, which is building the center on behalf of Corporacion de Zonas Francas S.A., an autonomous government entity that owns 100 percent of the project. He says the newly inaugurated Contact Center, housed in a gleaming blue glass building on the edge of Managua, will employ 460 agents and 65 administrative personnel, and will comprise 2,670 square meters of work space on two floors. Pena, who spent 32 years in the U.S., helped build call centers in Australia, Europe, India, the Philippines, and South America before realizing his own country's potential. "This is considered a class A center in a class A building," he says. "We're going after Fortune 100 companies, bringing brand names into this country so others can follow. India started with General Electric and American Express. The rest is history." Pena says he's currently in negotiations with five companies, but declined to name them because of possible fallout from critics. "Nicaragua will be competing against El Salvador, Costa Rica, Panama, and the Dominican Republic." He adds that the D.R. has "serious issues" when it comes to call centers. "They have consumed all their bilingual resources. All the bilingual people in the Dominican Republic are already employed, and there are no more available. So if you establish a call center there, you'll have trouble filling the jobs. Also, I do not believe the Dominicans can compete with Nicaragua, because of their accents. Nicaraguans have a very soft Spanish accent." Another country that Nicaragua won't compete with is India, he says. "India does not have what Latin America has: bilingual services. The largest consumer of BPO services is the United States, and by 2020, the U.S. will have 63 million Hispanics. Only 47 percent of the Hispanic population speaks English at home." India already has 800,000 people working in call centers, many of them in the high-tech Bangalore metropolis. But Pena says India has already become too expensive. "Somebody who's been working for an American company for a year and a half has been trained to speak American slang. He's going to ask for more money. In India, a good-quality employee will earn $2.80 an hour. Here in Nicaragua, with all the benefits, it would be around $2.35. Here, there is no competition. People are willing to work harder. That's the way it is. Nicaragua is a very poor country." Montealegre started Almori S.A. in July 2003 with three employees and an investment of $500,000. Within 16 months, he was already making a profit. In a recent interview at his Managua office, Montealegre said the wages he pays are 20 to 30 percent higher than what the average Nicaraguan earns. "Looking at the U.S. healthcare industry, we found there was a need for greater levels of interaction with the customer. But to do that, you need a higher level of education. There's a talented pool of university-trained, computer-literate people in Nicaragua. We saw this as an opportunity to train people so they could understand how to manage long-term customer relationships." According to Montealegre, his company doesn't do outsourcing; rather, it is the back office for his San Antonio pharmacy operations. Almori S.A. is owned by San Antonio's Muro Healthcare Management. He says the call center will soon expand to Miami and New York. "We have a dedicated data circuit between Nicaragua and the United States that connects our office here with our office there, so when you pick up the phone in Managua, it's really like an extension." Phone costs are negligible, coming to less than one cent per call. The average call lasts 3.5 minutes, he says, and Almori employees make between 60,000 and 70,000 calls a month, 70 percent of them outbound. "Our patients in San Antonio are bilingual, but the older Mexicans speak only Spanish, so we need our people to speak both languages," Montealegre says. Because of certain cultural nuances, Almori employees are taught to adapt themselves to Mexican culture, using the local word for pharmacy, botica, rather than the more generic farmacia. "We spend one month of training, and one month of coaching. The learning curve is six to eight months. We evaluate our employees every July, and give raises of 10 to 15 percent," he says. "We have very little turnover here. Those who leave go on to study." Montealegre says that his company receives no subsidies or help from the government. "I have decided not to participate in any government-sponsored support. We can't live off the government." He predicts that he'll double his workforce to 200 within a year. A somewhat different call center project has been proposed by Corporacion Roberto Teran G., a major Nicaraguan conglomerate with interests ranging from Internet access to auto distribution to photo processing. The $4 million project is called Press Two, as in "press two for Spanish." "We want to be the premier Spanish-speaking provider of BPO services to the customer," says Ricardo Teran, the president of Corporacion Roberto Teran G. "We're planning large alliances so that, for example, when you call American Airlines, you'll press two for Spanish and they'll answer in Nicaragua." Teran says his company and T 26 A.S., a Danish technology supplier, are putting up 52 percent of the capital. The remaining 48 percent will come from Denmark's Industrialization Fund for Developing Countries. "This industry is exploding, because people are realizing how much they can save by having these operations done by outside countries. When you've got a problem in India, it's a four-day trip there and back. Here, we're only two and a half hours from Miami." Press Two, which will initially have 1,000 seats, is to be located on about 17 acres along the Pan-American Highway, three kilometers from Managua's international airport. The property, which belonged to a car dealership, will be developed into a 6,000-square-meter technology park. "We have safety and stability. We have excellent connections. Our property is located 20 meters from where the Arcos-1 submarine fiber optic cable ends. This makes it the same as if we were located at Miami International Airport." Teran says call center jobs will come to Nicaragua first because of connectivity and second because of low wages. "In neighboring countries labor costs have risen because they're saturated. We're starting to hear people who are very concerned with the problems in Costa Rica." Teran states that Press Two will be making money by the end of 2008, and adds that success is assured because "the Nicaraguan government, from the president on down, is totally committed to making this work." Potential investors might be wise to heed the words of Contact Center employee Elsa Lopez, who thanked President Bolanos and other dignitaries at the ribbon-cutting ceremony for making jobs like hers possible in an uncertain world. "On behalf of the working class I would like to say a few words. The wealth of a country resides in its citizens, their qualifications, and their willingness to work. Today, worldwide investors still believe in Nicaragua. Although the political scene might be discouraging, Nicaragua has been changing over the last few years, and today we see more investors coming. "Nicaragua can hardly go back to the past. We are not expecting to be fed for a lifetime. I would encourage investors to take a closer look at the Nicaraguan labor market. Provide us with dignified jobs. We have what you need." Photojournalist Larry Luxner specializes in Latin America. Visit www.luxner.com
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