The 13th Month Syndrome and Other ‘Rigid’ Worker Protections
March 9th, 2010By Tarun George
We all know that labor market regulations are an important part of the decision to outsource to a foreign country. They standardize the rules for employer and employee, and make factors like labor costs much more predictable. At the same time, consensus is that excessively strict regulations do not allow the labor market to function efficiently.
The question for US companies eyeing the LATAM outsourcing industry is, when do these regulations become too rigid?
The current situation in many Latin American countries could be ‘too rigid’. Enterprise Surveys, a firm that specializes in company-level data collection in emerging markets, conducted a series of surveys done last year across 14 countries in the region to test for the effects of strict labor regulations on the workforce. The subsequent report by David Kaplan, from Enterprise Surveys, states that laws such as high legally mandated severance payments, mandatory retraining of redundant workers, and restrictions on hours worked not only prevent the labor market from operating efficiently, but also cause lower levels of workforce participation, and higher levels of unemployment. He concludes that making regulations more flexible would lead to an average net increase of 2.1% of total employment.
The irony is these laws are often union-driven requirements to protect workers, but they sometimes end up doing the opposite. “We had many employees who legitimately wanted to work two or three 12-hour shifts during the week rather than five 8-hour shifts, but because of the overtime rule we couldn’t allow that” — Maggi Williams, VP Corporate Development, KM2
Cognizant Adds to Argentina – Is Mexico Next?
March 8th, 2010US IT services firm Cognizant (Nasdaq: CTSH) will be expanding services offered from its Argentine delivery center, the company’s country manager for Argentina, Cristián Argüello, told BNamericas.
Cognizant currently focuses on providing business application development, support and maintenance from its center, which is located in Buenos Aires. Argüello said the division will be developing business process and infrastructure management services, primarily for Cognizant’s global clients that are either expanding to Latin America or are looking to the region to complement their existing outsourcing plans.
“We are referring to value-added business processes and also device, network, server, database and operating system monitoring,” he said.
The life sciences, financial and consumer goods sectors represent Cognizant’s main regional clients, with each market accounting for 20-25% of the Argentine delivery center’s revenues. Argüello noted that market consolidation – especially in the life sciences industry – is also helping to generate new IT service business opportunities. Other 2010 …
Global Services Firms Maintain Focus in Wake of Chile Quake
March 3rd, 2010By Karina Cuevas
Despite Chile being a country with a long seismic history, the 8.8 earthquake that devastated its southern region left many disconnected from the rest of the world. A lack of electricity and communication has been one of the primary concerns for business owners whose operations are fundamentally dependent on connectivity to the rest of the world.
The global services industry in Chile appears to be rebounding well from last week’s disruption, working simultaneously to reach out and service those in need and also strive to maintain business as usual.
“Our thoughts and prayers are with those affected by this earthquake. In the wake of this emergency, Sitel’s first priority is the safety and well-being of our associates,” said Dave Garner, Chairman and CEO of Sitel. “The local Emergency Committee is working to contact every associate to determine their situation, get an idea of individual losses, and find out needs and ways we can be of assistance. “
Sitel has enacted a preparedness plan, built for these types of situations. Among other procedures, account teams activated to make contact with customers to minimize the impact on contact center activity.
Sitel’s Investment in Nicaragua “Like Striking Gold”
March 2nd, 2010By Kirk Laughlin
Sitel’s Nicaragua operation has been one of the “biggest success stories over the last 18 months” for the global BPO and contact center organization, Andrew Kokes, VP of Marketing at Sitel, told Nearshore Americas last week.
That’s a pretty bold statement for a company that employs over 60,000 workers in over 140 facilities in 27 countries around the world. But, Kokes says the value of Nicaragua became so apparent so quickly that the company opened a second facility within the first year, which is a rarity for Sitel.
“It’s been a phenomenal experience,” said Kokes. “What made it a tough place to be in the 80s, has changed dramatically… now everyone has come home and they have come back bilingual, and educated.”
In fact, about 75% of the nearly 2,000 person staff working at Sitel’s two in-country facilities …
Contact center agents are problem solvers. And solving problems all day is no easy gig. It can be hard to maintain a positive attitude; as a result, turnover is a major issue. But contact center directors can help to a great extent to keep up morale and improve retention in the process.
Customer care expert Barbara Burke recently spoke with 1to1 Magazine about employee engagement in the contact center. Burke is author of The Napkin, the Melon, and the Monkey: How to Be Happy and Successful at Work by Simply Changing Your Mind, a fable about how a positive attitude can transform a call center agent from flop to star performer. She advocates storytelling as one way managers can help their agents learn new skills and improve their current performance. Here, she provides some additional advice on engaging agents so they stay longer:
Sustaining long-term employee …
Commentary: Brazil Builds Image as an Open Source Software Dev Hub
February 23rd, 2010SOURCE: markkobayashihillary.computing.co.uk
By Mark Kobayashi Hillary
When I was in India recently for the NASSCOM conference I noticed a lot of other countries being represented at the show. In fact, over twenty different countries had delegations there in Mumbai. One of the most prominent was Brazil. Possibly because of the sheer size of the industry there, but also because they have some different views on what makes outsourcing work.
I called up Flavio Grynszpan today to ask him about the Brazil approach. Flavio is well known as one of the leading outsourcing advisors in Brazil and he formerly spent a decade running Motorola there. I asked Flavio first about the lack of recognisable Brazilian IT brands. He said: “It’s important for Brazilian firms to develop their brand internationally, but they should not try to compete in the low cost area. We are not so competitive at the low cost game. We are …
Is the True Measure of Outsourcing’s Value Really About Productivity?
February 19th, 2010By Kirk Laughlin
When companies outsource work to another country there is an implicit understanding that total delivery costs will be lower than they are in the host country. But a much more interesting question is: What is the value of my spend? Or, in other words, what is the nearshore or offshore provider yielding in work produced over a specified period?
For companies, especially those that are relying on outsourcing providers to supply IT services like software development and testing, it’s a crucial question. This was one of the key topics that came up in a call I had today with Jeremy Beck, VP of Business Development at Scio Consulting, a specialty product development and IT services firm, specializing in software-as-a-service applications, with an development facility in Morelia, Mexico. (Based on Jeremy’s description, Morelia definitely qualifies as an up-and-coming …
World Bank Says LATAM has Learned from Past Mistakes, Economies are More Resilient
February 17th, 2010SOURCE: LatinBusinessChronicle
BY PAMELA COX, Vice President for the Latin America and the Caribbean Region
A year ago, things looked pretty gloomy in Latin America. World demand had taken a nose-dive, and exports from Latin America and the Caribbean had dropped more than a third in just six months. More concretely, commodity prices had collapsed. A barrel of oil had gone from $147 per barrel in July 2008 to $42 in February 2009. Prices of soybeans, wheat and copper also dropped dramatically. For a region, where 90 percent of the population resides in net commodity exporter nations, the plunging prices were destined to take a toll.
In human terms, we calculate that the recession added about 10 million to the ranks of the poor and 2.5 million to the ranks of the unemployed in Latin America.
To make matters worse, remittances, while still resilient, have shown some decline. These flows …
Five Years Later, CAFTA Influence on Pro Services Outsourcing is Hotly Debated
February 16th, 2010
By Tarun George
The Dominican Republic-Central American Free trade Agreement (DR-CAFTA) remains a controversial treaty five years after its contentious passage, yet many experts believe that the agreement is only just beginning to show its real impact.
CAFTA-DR forms one of the largest free trade blocs in the Americas, joining together Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. Bilateral trade between the US and the CAFTA countries is valued at over $45 billion annually. But nearly five years on from when it was first implemented in the US, what effect has it had on the trade in services? NearshoreAmericas is taking a look at whether CAFTA has in fact enabled a more productive relationship between US customers and the professional services outsourcing industry in Central America.
Opinion: Brazil’s “Closed Economy” has to Change and Mature
February 16th, 2010SOURCE: Latin Business Chronicle
In a way, Brazil is a jail. Fortunately, it is a beautiful prison, with glittering beaches, exotic flowers and wonderful food. However, it has 190 million Brazilians locked in a closed economy—forced to accept whatever quality of goods and services, at whatever price and quantity.
Despite all of the BRIC hype, Brazil remains one of the most closed economies in the world. Brazil’s exports and imports, as a percentage of GDP, should be 16 percent in 2010. Argentina’s trade as a percentage of GDP will be more than twice as much, and Chile’s trade will be 56 percent of GDP. To put things in perspective, Singapore’s is more than 150 percent of GDP.
The country’s closed economy is the reason why Brazilian firms can charge exorbitant prices for basic goods and services. Automobile prices, for example, are multiples of what they are in other countries. Brazil’s cellular services are the …
