Call Centers in Costa Rica Employ 16,000 People While Developing A Middle Class posted by on May 21, 2012
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Call centers are often linked to telemarketing, but this is just one of the many business functions performed by call centers. Call centers may focus on one of the following business functions, or operate campaigns that cover many different functions:
Inbound sales, where customers are responding to an advertisement.
Outbound sales using client provided call lists.
Lead generation through qualifying customers calling about a sales promotion.
Market research by conducting surveys.
Processing of product orders from customers.
Customer support through providing help desk functions.
Technical support for particular products.
Appointment setting.
Credit and billing problems, including collections.
Cellphone activation.
Fundraising for charities.
Cause related marketing.
Direct response to TV / Radio marketing.
Sports booking.

Call centers essentially perform any business function that involves person-to-person contact over a voice connection. Costa Rica is the home of a number of corporate call centers, including Bank of America, HP, IBM, Proctor & Gamble, and Western Union. Independent call centers range in size for super call centers, such as Sykes Costa Rica with 3200 employees, to operations run from a home with one or two employees. There are no statistics regarding the number of call centers in Costa Rica. Richard Blank (CEO of Costa Rica’s Call Center) estimates that there may be as many as 300 call centers operating in Costa Rica. With just over a 100 seats (employees actually making the calls), Costa Rica’s Call Center represents a mid-sized call center.

If the number of call centers is hard to estimate, the number of workers employed by call centers is even more difficult to determine. According to the Costa Rican Investment Promotion Agency (CINDE), the offshore service sector employs 1.4% of the Costa Rican labor force, with contact centers employing about 50% of this offshore service sector. With a total work force of 2.3 million in Costa Rica, this results in about 16,000 workers being employed by call centers. The CINDE report “Costa Rica Human Capital Cost – Services Sector” (PDF download) estimates the average wages for call center workers, as follows: Job Position Monthly
Average Monthly Average +
Mandatory Benefits
Call Center Clerk $533 $717
Contact Center Manager $4323 $5814
Contact Center Quality Inspector $1320 $1775
Contact Center Team Leader $1623 $2183
Intermediate Bilingual Agent $981 $1320
Junior Bilingual Agent $952 $1281
Spanish Agent $767 $1032
Senior Bilingual Agent $1019 $1370
Workforce Coordinator $2317 $3116

The above table reflects the average salaries for September 2011, when the exchange rate was 510 colones equaled one US Dollar. The Mandatory Benefits includes the Christmas Bonus, which is equal to one month of pay.

The A.T. Kearney Global Services Location Index for 2011 ranks Costa Rica as #19 in the world for outsourcing, and #4 in Latin America. The GSLI report points out that cost competitiveness is becoming a major challenge for Costa Rica. Nearshore Americas, in their article “Latin America’s Ranking Reflects, ‘Intensifying’ of IT, BPO Skill,” points out that El Salvador and Honduras are leveraging their lower labor costs to attract nearshore business. While price competition presents a serious challenge, Costa Rica still holds an edge according to CR Technology Insight, which points out that Costa Rica is #1 for innovation in Latin America, #3 for network readiness, #3 for property rights index, and #4 for high technology exporter.

The recent article on smartphone growth statistics illustrates the growing importance of smartphones on purchase decisions by consumers. The smartphone shortens the time between seeing a product of interest and acting on the decision to purchase the product. Once the consumer fills out a request, or contacts an 800 number, the call center comes into play. The call center acts either as an order processing center, or qualifies the lead. The qualified lead is then passed to either the client, or another part of the call center operation. Marketing to a potential customer, who has expressed an interest in a product, generates far more sales than attempts at marketing using “cold call” lists.

Internet forums and discussions on social media services, such as Facebook, created a self-help culture. This phenomenon reflects the frustration of many consumers, whose contact at a help desk does not speak good English. Consumers want an answer, and want one that they can understand. In many cases, the self-help groups may solve the problems. Without the presence of an official company representative, these forums may also give misinformation. In these cases, the work for the help desk representative is more complicated, as they must correct the misinformation, and then provide the correct solution. Help desks will remain as a vital operation for call centers, as they are the official company representative, who can also take corrective actions, such as authorizations for return, or corrections to billings. In both quality of English language speakers and understanding of technology, Costa Rica has an advantage over call centers located in the Philippines and India.

In terms of outsourcing, call centers are part of Business Process Outsourcing (BPO). BPO includes many other business process, such as accounting, back office operations, and payroll. BPO, itself, is part of services outsourcing. Other services outsourcing areas are Information Technology Outsourcing (ITO), and the new area of Knowledge Process Outsourcing (KPO). There are Costa Rica businesses involved in all areas of service outsourcing.

I wish to thank Richard Blank of Costa Rica’s Call Centers for sharing his knowledge of call centers in Costa Rica, and for acting as a soundboard for my ideas on this article.

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Call Centers in Costa Rica Could Face Competition from Unpaid Workers posted by on May 14, 2012

At any given time in Costa Rica, tens of thousands of Ticos take calls from consumers in other countries who are in need of service and support. These agents work in call centers mostly located in the Central Valley, and the majority of the calls are handled in English -although demand for Portuguese-speaking agents is growing.

What would happen to the economy of Costa Rica if an army of unpaid workers decided to gleefully take over customer service and tech support from them? According to a recent article in The Economist, the new trends of “unsourcing” and peer-to-peer support could become a thorn on the sides of the outsourcing and call center economies of India and the Philippines. Should Costa Rica be worried as well?

According to the article in The Economist, more customers are helping each other when it comes to getting tech support on devices or software:

Instead of speaking with a faceless person thousands of miles away, customers’ problems are answered by individuals in the same country who have bought and used the same products. This happens either on the company’s own website or on social networks like Facebook and Twitter, and the helpers are generally not paid anything for their efforts.

The potential of unsourcing should prove attractive to executives and operations managers, and it’s already happening. Here are the examples cited by The Economist:

  • GPS maker TomTom saved $150,000 and solved around 20,000 tech support queries in just two weeks after the company turned the function over to its social media channels.
  • One Logitech customer has fielded 45,000 tech support tickets related to webcams without being paid.
  • A British virtual mobile operator, similar to TuYo Movil here in Costa Rica, entices its customers to go online and work on open tech support tickets in exchange for points that can shave off pence from their montly phone bills.

Other companies considering unsourcing include electronics retail giant Best Buy in the United States and laptop manufacturer Lenovo. An example of a close-knit community in Costa Rica that provides mutual tech support on Facebook is the mapping and traffic information app Waze.

Foreign companies are attracted to set up their call centers in Costa Rica due to the availability of skilled workers and cost efficiency. Costa Rica has become a hub for outsourcing in the last few years, and recent trends point towards near-shoring and third-party outsourcing, whereby firms in India that have been contracted by American and European companies unload their excess work onto Costa Rica.

Near-shoring in Costa Rica is attractive for American companies with customers who are not used to Hindu accents on the phone, but are more receptive to Hispanic accents. There is also the issue of perceived familiarity. Customers sometimes ask call center agents where they are located, and upon learning that they are talking to someone in Costa Rica, the customer is bound to say something like: “Really? My cousin was just there with her husband on vacation and they loved it!”

Costa Rica is betting on its workforce to attract more foreign investment and boost economic growth, particularly in the high-tech sector, but the call centers are still significant. Should unsourcing and peer-to-peer customer support grow, Ticos who work in call centers may have to look for other jobs.

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