The Dominican Republic continues to hold the title of the Caribbean’s call center champion, edging out rival Jamaica and earning continuing praise from major in-country providers. With over 65 call centers, it is the second industry in growth after tourism, generating 40 percent of revenue for the overall DR economy. The call center industry has created around 22,000 direct jobs and there are hopes that as many as 100,000 new jobs will be added in the next five years.
In 2008, $7.2 million was driven from services exports and the country attracted $2.8 million in investments.
An Affinity Play
“Our affinity with the United States of America as well as location and telecommunication infrastructure are benefits aside from the low costs for the industry,” says Veronica Ogando, Investment Promotions Specialist for CEI-RD.
CEI-RD helps facilitate tax exempt status for providers, whether or not they are in an industrial park. The National Free Zone Council backs that proposal providing call center businesses access to the benefits of free trade zones, although this does not apply to the textile or manufacturing industries within the zones.
One of the main features that the DR call center industry counts on is the variety of languages available within the country. Its inhabitants have knowledge of Portuguese, French, English and Italian aside from Spanish. Companies like Stream, which happens to be the top provider in the country, credits cultural affinity as a key feature of the DR’s services industry.
“In the Dominican Republic, we credit not only the exceptional quality of the country’s English-speaking talent base, but also its cultural affinity for the U.S., and highly skilled, educated workforce,” says Rodolfo Salazar, America’s Marketing Director for Stream Global Services.
A Streaming Success
Although countries like the Philippines, Costa Rica, Panama, Guatemala, Venezuela and Colombia are the current competition for the DR, geographical positioning continue to be a primary asset. Stream credits it success with its 80 global clients to the proximity of DR to North America, thus enabling clients to travel to DR sites in a minimum amount of time, addressing any business ventures in one day, if needed.
Another company that is benefiting from the advantages of the free trade zones in the DR is Provitel, a growing and relatively new call center company located in DR’s capital Santo Domingo. With a client base of various Fortune 1000 companies, Provitel sites the neutrality of the government and its low investment costs as key factors for doing business in the DR.
“Because of the saturation of the markets in Argentina, Costa Rica and Mexico it has afforded us an increase in cost and efficiency within DR,” says Ramon Rojas, COO for Provitel. But because there are not enough call centers in the country for the market, there is truly no client competition, but yes a competition of resources and we have ideal human resources.”
“Washington Mutual cited safety as their number one concern in their decision not to relocate to the DR…We have found that when US companies see cities like Bogota, Panama City, Managua or even San Jose, they have a greater comfort level” – Doug Meyer, DRCCA
Despite all the positive feedback some of the main outsourcing companies are receiving, it doesn’t seem to satisfy the Dominican Republic Call Center Association (DRCCA) expectations of what the government needs to apply to make it a better business venture.
According to Doug Meyer from DRCCA, the DR is riddled with difficult labor laws that have pushed mid –to-large call center companies to leave the country. After 90 days, some companies have placed high worker severances to let go of low performing employees, thus creating a lax work environment and poor performance.
Stream Global Services: Global company in 19 different countries in the world
- 34 Global Centers
- 20 percent of clients are global companies
- 17,000 employees worldwide.
- 33 Languages Worldwide
- Largest Multinational Company in the outsourcing business
- 35 percent of clients are in the telecommunications, technology and consumer electronics business
Stream Santo Domingo
- 3 Contact Centers in the city
- 2,000 Employees Total
- Services (English/Spanish
- Largest Call Center provider in the country
Another negative factor that many companies see when looking at the DR as a potential business platform is their placement in hurricane path which in turn becomes a liability when phone lines and streets are flooded, making it difficult for workers to get to their jobs.
The issue of scale, which is an issue that pops out around the globe in the context of developing offshore service centers, certainly has to be considered when working in the DR. According to the Caribbean Contact Center Report (2008-2010) published by Zagada Research, few centers have scaled their operations beyond 1,500 full-time agents.
Wages Remain Stable
Another factor working in the DR’s favor is the fact that wages have not spiked. “When compared with Continental Nearshore Latin American markets, India and the Philippines, wage inﬂation has been rising at a relatively slower rate. This is particularly true in the Dominican Republic,” the report states.
But the number one concern for many investors is safety. Although the local government has made many strides in reducing crime, it still is a major issue for companies and presents a huge loss in the investment sector.
According to the CIA World Factbook, the DR is an illicit drug transition point for South American narcotic traffickers. As well as being a key spot for human trafficking –children, men and women- over to Europe.
There are no current stable statistics on petty theft, pick pocketing, burglary or homicide in the DR since many don’t get filed within the judicial system, but crime rate is an often worry due to its steady increase yearly.
“Washington Mutual cited this as their number one concern in their decision not to relocate to the DR.” says Meyer. We have found that when US companies see cities like Bogota, Panama City, Managua or even San Jose, they have a greater comfort level.”
Despite the safety issues, the DR is current in an “ideal stage of growth for venture capital” according to Zagada. “Consolidation of leading small ﬁrms with several hundred agents into one or two leading indigenous brands could portend well for the market, given the limitation in scale and availability in excess seating capacity.”
The DR is the seventh largest trading partner with the U.S. in the Western Hemisphere and the fifth for Florida. There is little question that if country gets tougher on crime, the upside is very bright.
Karina E. Cuevas is a contributing writer to Caribbean CRM Central. She is based in the Dominican Republic and can be reached at: [email protected]