November 2002

By James Beatty, NCS International

According to IDC, the Framingham, Massachusetts research firm, 'worldwide customer-care services represented a U.S. $34.9 billion market in 2001.' Several experts expect that figure to exceed U.S. $90 billion by 2006. What may be of even greater economic importance, as reported by The Sacramento Bee in its July 2, 2001 publication, is that 'while the multibillion-dollar call center industry is growing in the United States, it is also growing abroad.'

These figures, as well as pressures from globalization, falling agricultural prices in world markets and persisting uncertainty in the hospitality sector, have spurred interest by Caribbean governments and companies to accelerate their efforts in expanding jobs and growing profits in the information communications and technology (ICT) area according to a report recently issued by the Zagada Institute. The Institute is part of Zagada Markets, which is a consultancy focused on strategy and innovation in the Caribbean.

The report is an effort to quantify the size and potential impact of the call center industry in the Caribbean and is the main source of my information. The study identified corporate call centers that are owned and operated by regional and international corporations in order to satisfy internal needs; however, the main focus was on commercial call centers that operate as a standalone business unit serving third- party clients.

The Caribbean claims 44 call centers varying from 7 to 800 agents per center with seating capacity ranging from 10 to 1,000. More important, the industry has created over 11,000 agent jobs with a gross domestic product exceeding U.S. $270 million in the countries of Jamaica, Trinidad, St. Lucia and the Dominican Republic. 

Labor Costs
When one considers the U.S. hourly, daily and annual wage scales in these specific countries as outlined, this figure should be viewed as substantial.

 Labor Costs - By Country

In fact, when comparing these wages to the most commonly targeted call center wages used by many U.S. economic development professionals of $10 per hour, one can clearly see the potential labor savings, which could be substantial.

Labor Costs - U.S.

*Based on 2,080 hours

Companies that have a Caribbean presence include Atlantic Telenetwork, Apple Vacations, AT&T, Cingular Wireless, Verizon, FedEx, FoneMed, SITEL, Fujitsu, West Corporation, Technion, ACS Business Solutions, Teleservices Direct, Overdrive and Neal & Massy.

This certainly is not to suggest that one would establish a call center just for the wage savings, but it certainly cannot be ignored, especially in light of the implementation of excellent training programs and enlightened human resource practices and techniques in the Caribbean.

Telecommunications
As stated in the report, it costs an average of 7 cents to call major European capitals from the U.S.; calling the Caribbean from the U.S. is often 10 to 15 times that cost, with calls from the Caribbean just as high. Consequently, telecommunications policy in the region needs increased liberalization and increased competition in order to mitigate the high costs.

The figures as stated in the report were derived with the assistance of the following agencies: Jamaica ' JAMPRO/Jamaican Promotions Company; Dominican Republic ' OPI-RD/The Dominican Republic Office for the Promotion of Investment and The National Free Zones Council of the Dominican Republic; Puerto Rico ' PRIDCO/Puerto Rico Industrial Development Corporation; Trinidad ' TIDCO/Trinidad and Tobago Development Company; Barbados ' BIDCO/Barbados Information Development Corporation; Grenada ' GDC/Grenada Development Corporation; St. Lucia ' NDC/St. Lucia National Development Corporation. In the countries previously listed, information was derived from call center executives and consultants in those specific areas.

Caribbean Call Centers - Parameters By Country

The countries of Haiti, Belize and Surinam were contacted but indicated an absence of a viable call center industry. In addition, the Dutch-speaking islands of Aruba, Curacao and Bonaire were reported to have a number of call centers serving the gaming industry, but this information could not be substantiated.

Worldwide Implications
What are the implications for economic development groups worldwide, whether they are in Tennessee or in India? One clear implication is that you best be careful and know that you are on shaky ground if you sell your area on the low cost of labor. It may sound absurd, but I have been in too many meetings and on too many phone calls in which I have heard the phrase 'We have cheap labor.' Not only do I find that demeaning of the labor force in that area, but it is not true, as seen from the chart previously listed. It also demonstrates that economic development groups selling their area on a pure cost basis just don't get it. They should be selling their areas on a value basis, emphasizing the potential productivity and return on investment that can be realized. If you sell cheap you will be beat. If you sell productivity and value, you then have better positioned your area as the place to choose from among the many locations available to call centers.

Another point I would emphasize to economic development groups is that you are competing worldwide, not just with the town or community 60 miles up the road. Your knowledge of your competition must reflect that fact because whether you acknowledge it or not, I assure you the call center executive and most certainly the site selection consultant will compare your area to others worldwide. The adage of 'think locally, act globally' has never been truer. The Caribbean is just one of several areas in the world that have embraced the call center phenomena, and they won't be backing off their marketing efforts any time soon. So to all economic development organizations, know that the gloves are off and as they say, 'It's on,' meaning that you must be ready to promote, protect, defend and, most important, sell your area.

I would like to express my thanks to the Zagada Institute for sharing this information with me and to Nortel Networks for sponsoring this report. For more information about the Institute and its work, visit www.zagada.com.

I thoroughly enjoy all of your comments and questions, so please continue to send them to me at jbeattyncs@aol.com and look for information on call center locations at www.callcentersites.net.

James Beatty is president of NCS International, Inc., which specializes in corporate site selection, community analysis and marketing.

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