The BPO industry in Latin America is still in its infancy, but what everybody agrees is that it has a great potential to grow to the height of its peers in the East. There are many success stories, though there are also some concerns about wage inflation, recruitment woes, and other hidden costs. Telus International, the services division of Canadian telecoms giant Telus, is among the first firms who tested the water by investing in Latin America’s BPO sector. Telus made its foray into the market in 2008 when it acquired Transactel. The Canadian company has since doubled its workforce in the region.
Nearshore Americas (NSAM) sat with Jeff Pruitt of Telus International to know his take about Latin Americas outsourcing industry and future evolution.
NSAM: We admit that we never realized that Telus International is such a big player in the region. Can you comment on your profile?
Puritt: We believe that brand recognition with the local labor pool is absolutely critical to the success of our operations. When we acquired Transactel in 2008 we inherited operations in Guatemala, El Salvador, and Panama. The company had a strong reputation with local employees so we didn’t see the need to upset the balance through rebranding. Since 2008, we have expanded our operations from 3,400 employees to over 7,000 across the region.
We also have operations in other countries particularly in the Philippines. In total, Latin America makes up about 50 percent of our workforce and we’re very excited to continue growing in the region.
We continue to look for new locations but what we’ve also recognized is that (aside from voice functions) there is great opportunity to diversify into new services and market segments
NSAM: So it sounds like you’re more than satisfied with your investment in Latin America?
Puritt: I cannot stress enough when I say that our investment has proved well beyond our wildest imagination. We continue to hear great things coming from our clients and from our employees. A big success factor when compared to our operations in the Philippines is that our agents don’t have to work on night shifts to service our U.S. customers. This keeps attrition levels lower. One unanticipated outcome was our ability to service other languages including Portuguese and French for our Canadian clients. In total, we have 500 agents with multilingual (other than Spanish and English) capability. We have shut down our operations in Panama but are now expanding our operations in Jamaica, Barbados, and St. Lucia.
NSAM: You’ve doubled your headcount in four years, have you reached saturation in Latin America?
Puritt: Based on our current perspective we’re not even close to saturation. We continue to look for new locations but what we’ve also recognized is that (aside from voice functions) there is great opportunity to diversify into new services and market segments. Thirty percent of our revenue now originates from non-voice functions such as data cleansing, and we hope to push further into the application management and IT support business. The domestic Spanish market is also a growing market opportunity for us. Currently about 80 percent of our business goes to servicing bilingual clientele but we could see that mix shifting more towards Spanish speaking markets.
NSAM: What is your perspective on the future sustainability of the industry?
Puritt: Cost savings are a big part of the equation but the wages we offer are up to three times more than the prevailing wage in other industries. We consider the industry an immense help in creating wealth and new opportunities for these economies. We also consider ourselves customer experience experts which means that we subscribe to the new outsourcing paradigm focused on value creation. We’ve moved away from metrics like average handling time per call and more toward first-call resolution and customer satisfaction scores. Our Latin America operations have done well in this respect, which consequently improves the region’s overall value proposition. The buyer community has also become smarter in vendor selection considering total cost and impact to customer experience. In the early days it was all about cost where firms would even resort to reverse auctions to bid down suppliers.
Today it’s a partnership between vendors, buyers, but also local stakeholders to ensure that the proper investments in education and infrastructure are being made, so that these markets can continue to evolve with the industry in offering higher-value services.