Panama calling: Panama is fertile ground for call centers, but it needs more people fast

Latin Trade, April, 2005 by Andres F. Velazquez

When a customer in Latin America or the United States calls computer giant Dell to buy a product or to resolve a technical problem, the person who answers the phone is probably in Panama. It doesn't matter if the client speaks English or Spanish, the Texas computer giant's 1,900 call--center employees are bilingual.

The trend toward outsourcing call centers to Latin America is increasing. According to market-research consultancy Datamonitor, the number of people in Latin America employed by such contact centers will rise to 730,000 in 2008 from 336,000 in 2003. That's an annual growth rate of 17%, the fastest in the world. Leading the trend are Mexico and Brazil, where 86% of all call-center employees in the region are found.

Although Panama is just getting started in this industry, the small, Central American country--population 3 million--has since 2003 turned itself into an attractive choice for call centers, creating 5,000 jobs so far. The reasons are several. Aside from geographic location, Panamanian society has been exposed to the United States for many decades, which has helped many people become bilingual. What's more, the government cut the tax on international calls from US$1 per call no matter the length to 12% of the cost of the call.

All this, along with Panama's political and economic stability, and the fact that the five main undersea telecom cables--set up during the dot-com boom, and originally meant to serve growing regional Internet needs--pass through its territory, creating all the right conditions for a thriving call-center industry.

Aside from Dell, there are currently three other large call centers operating in the country: National Asset Recovery Services (NARS), a U.S. company that collects unpaid bills for a variety of clients; Sitel, also from the United States; and Starcontact, a Panamanian company. Spherion recently closed a call center for strategic reasons.

Marcos Vallarino, the vice president of NARS, until less than a year ago worked for the government in the effort to attract international investors. He says the call-center industry took off between 2002 and 2004, just after the law lowering taxes on calls took effect at the end of 2001. "During this period, the number of jobs tripled," he says.

Nevertheless, the fact that the legislative environment for call centers is favorable was not the determining factor in drawing NARS to set up shop in Panama, according to Vallarino. It was the way people talk. "The good thing about the Panamanian accent is that it's pretty neutral in both languages," Vallarino says. "We don't have a weird vocabulary, and even though you hear the Spanish accent in English, it's not as strong as the accent from some other countries."

Despite the favorable environment Panama offers, there are worries that the industry might hit a ceiling because of the lack of qualified people to man the banks of phones. "The expectation is that the call-center industry will keep growing, but this is going to depend on the availability of labor, which is more and more scarce every day," says Vallarino. "I don't know how much more the Panamanian market can grow without reaching the point where we're stealing employees from each other."

The government is aware of the problem, and officials say that they are working quickly to educate more workers. "For this reason we're making a big effort to promote training in English," says Manuel Jose Paredes, Panama's undersecretary for trade and industry. "To take advantage of our geographic location, we need to have bilingual people."

Leader. Even though the availability of qualified workers is limited and turnover is high, Panama appears to be leading its neighbors as a country of choice for customer-contact centers, in large part because of all those telephone lines. "Because of the telecommunications infrastructure, it's cheaper to set up shop in Panama than it is in Costa Rica or El Salvador," Paredes says.

Working in a call center is ideal for college students, other young people or anyone who has a good knowledge of English. Visiting Dell's call center--located in the old Howard Air Force Base, once the most important U.S. military installation in Panama--one is surprised to find such an advanced corporate culture: Dell employs any qualified person, regardless of race or age. The employees, whose monthly salaries start at US$500, range in age from 17 to 77. The company even hires physically challenged people--something uncommon for a company based in Latin America.

"Dell is a meritocracy," says John Hood, chief executive of the company's call center in Panama. "What's important to us is the ability of the person to attend to our clients. That's the winning spirit of Dell."

ANDROS F. VELAZQUEZ * PANAMA CITY