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Nicaragua vies for lucrative call-center jobs
The Washington Diplomat / June 2006

By Larry Luxner

MANAGUA — "Good morning," Kendra Bordas says in her best American-accented English. "I'm calling from Q Pharmacy in San Antonio. May I speak to Ms. Cortéz?"

When the elderly Ms. Cortéz comes on the line, she answers in her native Spanish. So Kendra, switching effortlessly into Spanish as well, politely reminds Ms. Cortéz that it's time to refill her prescription for Zocor, a cholesterol medication.

Two minutes later, Kendra is calling Mr. Rodríguez in suburban Alamo Heights to inform him about an upcoming doctor's appointment.

During the course of an average day, the cheerful, 21-year-old Kendra — who goes by the name Sandra because it's easier for Hispanics to pronounce— will make 150 such calls and receive 30.

"Nobody ever asks me where I am," she said in a recent interview. "Most people assume we're in the doctor's office."

Well, not exactly.

Kendra Bordas has never been to Texas. The little blue cubicle she occupies from 8 a.m. to 5 p.m. every day is located about 1,430 miles southeast of San Antonio in a modern office complex in Managua, Nicaragua.

From 8 a.m. to 5 p.m., Kendra, like her 102 co-workers at Almori S.A., sits in front of a double-screen Acer computer, outfitted with a Plantronics Bluetooth wireless headset and a photocopied map of San Antonio pinpointing the location of all eight Q pharmacy outlets.

Besides making appointments and reminding patients to refill their prescriptions, Almori employees also process data, collect payments from insurance companies and push new products to their customers.

Thanks to her bilingual skills, Kendra makes the equivalent of $520 a month — $800 a month with benefits. That's only a third of what her U.S. counterpart would earn doing the exact same thing, but still a great salary by Nicaraguan standards.

"Getting a job in Nicaragua is hard, and I'm still a student," says Kendra, who's studying marketing at Managua's Catholic University. "It's a good job for someone without a degree. They don't make me stay after work, and I get to practice my English."

While critics see these call-center operations as magnets that lure jobs away from American shores, in dirt-poor Nicaragua they often mean the difference between poverty and prosperity.

"You have qualified people here who can give you the levels of productivity you need," said Alvaro Montealegre, founder and president of Almori S.A. "The people doing these jobs have a higher level of education [than their counterparts in the States], but because of the job market here, they're more hungry."

Indeed, young women like Kendra represent the newest economic hope for Nicaragua, which aims to have at least 3,000 call-center employees over the next three years — up from only 500 today.

These jobs are like gold for Nicaragua, which suffered a devastating earthquake in 1972, and a 1979 revolution that kept the country in the economic doldrums for years and forced thousands of people into exile in the United States.

But that exile also created a large class of bilingual professionals. And unlike the two million refugees from El Salvador who fled to the U.S. shores during the 1980s to escape that country's civil war, the 700,000 or so Nicaraguan exiles were for the most part better-educated and from high-income families. Many have since returned with their families and are looking for work.

And despite continuing problems such as endemic corruption, political bickering and rampant unemployment, optimism seems to prevail, fueled by Nicaragua's 4% economic growth rate last year and its 5.1% GDP growth in 2004 — the highest in Central America.

"We have high expectations," says the country's ambassador in Washington, Salvador Stadthagen. "We could have tens of thousands of people working in call centers within a couple of years. And we are committed to bringing this type of business to Nicaragua, because it is strategic."

Stadthagen said that under Nicaraguan law, the country must invest 6% of its annual budget in higher education.

"Our university system is inefficient, but it has turned out 100,000 young graduates who would like to find decent jobs," he explained. "Even though it's not equivalent to a bachelor's degree in the States, it's more than high school, and these people are very trainable. They have the basic skills, and they'd be perfect for the call centers."

On May 3, President Enrique Bolaños and other Nicaraguan dignitaries inaugurated Contact Center — a $3.8 million project that ranks as the country's largest call center.

Roger A. Peña is president and founder of San Francisco-based GVSource, which is building the center on behalf of Corporación de Zonas Francas S.A., an autonomous government entity that owns 100% of the project. He said the new Contact Center — housed in a gleaming blue glass building on the edge of Managua — will employ 460 agents and 65 administrative personnel, and will comprise 2,670 square meters of work space on two floors.

The Nicaraguan-born executive, who spent 32 years in the United States, helped build call centers in India, South America, Australia, Europe and the Philippines before realizing his own country's potential

"This is considered a Class A center in a Class A building," he said. "We're going after Fortune 100 companies, bringing brand names into this country so others can follow. India started with General Electric and American Express. The rest is history."

Peña said he's currently in negotiations with five companies, but he declined to name them because of possible fallout from critics.

"Nicaragua will be competing against El Salvador, Costa Rica, Panama and the Dominican Republic," said Peña, though he said the Dominican Republic has "serious issues" when it comes to call centers.

"They have consumed all their bilingual resources. All the bilingual people in the Dominican Republic are already employed, and there are no more available. So if you establish a call center there, you'll have trouble filling the jobs. Also, I do not believe the Dominicans can compete with Nicaragua because of their accents. Nicaraguans have a very soft Spanish accent."

Another country that Nicaragua won't compete with is India, he claims. v"India does not have what Latin America has: bilingual services," Peña said. "The largest consumer of BPO [business process outsourcing] services is the United States, and by 2020, the U.S. will have 63 million Hispanics. Only 47% of the Hispanic population speaks English at home."

India already has 800,000 people working in call centers, many of them in the high-tech Bangalore metropolis. But Peña said India has already become too expensive.

"Somebody who's been working for an American company for a year and a half has been trained to speak American slang. He's going to ask for more money. In India, a good-quality employee will earn $2.80 an hour. Here in Nicaragua, with all the benefits, it would be around $2.35. Here, there is no competition. People are willing to work harder. That's the way it is. Nicaragua is a very poor country."

In Kendra Bordas' case, she said, "I sent in my resume and they called me a month later. The next thing I knew, they told me I got the job."

Montealegre started Almori S.A. in July 2003 with three employees and an investment of $500,000. Within 16 months, he was already making a profit.

In a recent interview at his Managua office, Montealegre said the wages he pays his employees are 20-30% higher than what the average Nicaraguan earns.

"Looking at the U.S. healthcare industry, we found there was a need for greater levels of interaction with the customer. But to do that, you need a higher level of education," said the 46-year-old entrepreneur, who studied economics at Brown University. "There's a talented pool of university-trained, computer-literate people in Nicaragua. We saw this as an opportunity to train people so they could understand how to manage long-term customer relationships."

Montealegre said his company doesn't do outsourcing; rather, it is the back office for his San Antonio pharmacy operations. Almori is owned by Muro Healthcare Management Inc., which is based in San Antonio. He says the company will soon expand to Miami and New York.

"We have a dedicated data circuit between Nicaragua and the United States which connects our office here with our office there, so when you pick up the phone in Managua, it's really like an extension," he said. Phone costs are negligible, coming to less than one cent per call.

The average call lasts 3.5 minutes, he said, and Almori employees make between 60,000 to 70,000 calls a month, 70% of them outbound.

"Our patients in San Antonio are bilingual, but the older Mexicans speak only Spanish, so we need our people to speak both languages," he said. Because of certain cultural nuances, Almori employees are taught to adapt themselves to Mexican culture, using the local word for pharmacy, "botica," rather than the more generic "farmacia."

"We spend one month of training, and one month of coaching. The learning curve is six to eight months. We evaluate our employees every July and give raises of 10-15%," he said. "We have very little turnover here. Those who leave go on to study."

Montealegre adds that his company gets absolutely no subsidies or help from the government, and that this is by choice.

"I have decided not to participate in any government-sponsored support because I think our business model makes sense. We can't live off the government," he said, predicting that he'll double his workforce to 200 within a year.

In the meantime, a somewhat different call-center venture has been proposed by Corporación Roberto Terán G., a major Nicaraguan conglomerate with interests ranging from Internet access to auto distribution to photo processing.

The $4 million project is called Press Two, as in "press two for Spanish."

"We want to be the premier Spanish-speaking provider of BPO services to the customer," said company president Ricardo J. Terán. "We're planning large alliances so that, for example, when you call American Airlines, you'll press two for Spanish and they'll answer in Nicaragua." AA, he said, would easily save 40-50% by having their reservations center in Managua instead of Dallas-Fort Worth.

Terán said his company and T 26 A.S., a Danish technology supplier, is putting up 52% of the capital. The remaining 48% will come from Denmark's Industrialization Fund for Developing Countries (IFU).

"We are very excited about this opportunity," he said. "This industry is exploding because people are realizing how much they can save by having these operations done by outside countries. When you've got a problem in India, it's a four-day trip there and back. Here, we're only two and a half hours from Miami."

Press Two, which will initially have 1,000 seats, is to be located on a seven-hectare property along the Pan-American Highway, three kilometers from Managua's international airport. The property, whch used to belong to a car dealership, will be developed into a 6,000-square-meter technology park.

"We have safety and stability. We have excellent connections. Our property is located 20 meters from where the Arcos-1 submarine fiberoptic cable ends. This makes it the same as if we were located at Miami International Airport."

Terán said call-center jobs will come to Nicaragua first because of connectivity and second because of low wages.

"In neighboring countries, labor costs have risen because they're saturated. We're starting to hear people who are very concerned with the problems in Costa Rica. They expect a strike that will shut down the country at any moment."

El Salvador has its limitations too, he said, because the country recently dollarized its economy and has therefore priced itself out of the low-wage labor market.

Terán predicts his Press Two venture will be making money by the end of 2008, adding that success is assured because "the Nicaraguan government, from the president on down, is totally committed to making this work."

Potential investors might be wise to heed the words of call-center employee Elsa López, who publicly thanked President Bolaños and other dignitaries at the May 3 ribbon-cutting ceremony for making jobs like hers possible in an uncertain world.

"On behalf of the working class, I would like to say a few words. The wealth of a country resides in its citizens, their qualifications and their willingness to work. Today, worldwide investors still believe in Nicaragua, although the political scene mightbe discouraging, Nicaragua has been changing over the last few years, and today we see more investors coming," she said.

Nicaragua can hardly go back to the past. We are not expecting to be fed for a lifetime. I would encourage investors to take a closer look at the Nicaraguan labor market. Provide us with dignified jobs. We have what you need."

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