t's been 26 years since the World Bank first coined the term "emerging markets"
as a broad marker for countries where per capita gross national income falls below
a specific threshold, currently set at $10,725. Emerging markets constitute 80 percent
of the global population and 20 percent of global output. Identifying the key countries
for global business growth within the vast emerging market group has become a major
ongoing research project for international banks, investment houses and consultancies.
A.T. Kearney notes that many global companies are no longer
choosing between Asia and Latin America but building operations in both. Sitel Corp.,
headquartered in Nashville, Tennessee, is a good example. With large facilities
in India, the Philippines and other Asian locations, Sitel is one of the many BPO
companies expanding rapidly into Latin America for lower labor costs and broader
client offerings. Sitel pulls in $1.8 billion in revenue with 67,000 employees spread
across 27 countries, including Mexico, Panama, Colombia and, most recently, Argentina
and Chile.
"The top three expenses for any customer care contact center
are labor, real estate and IT," says Amit Shankardass, Sitel’s senior vice president
for solution planning, who carries substantial responsibility for site selection.
"If you include benefits and taxes, labor accounts for approximately 60 percent
to 75 percent of the cost, depending on the location. In addition to the financial
cost, the availability of a labor force and its work ethic must be considered in
the overall labor cost."
Sitel’s site selection research includes in-depth evaluations
of unemployment and underemployment rates; labor costs, including the average starting
wage and retail wages; major employers in the region, including competitors, and
their wage rates; educational institutions and graduation rates; and the available
workforce, including the population within a 20-mile commute. It also evaluates
real estate and associated costs, taxes and potential support from the local, state
and national governments.
Sitel pulls in a number of resources to gather the data required
to make site selection decisions. These resources include state and local economic
development agencies, brokers, site selection consultants and the local American
Chambers of Commerce. Sitel uses focus groups drawn from the local labor market
to determine U.S. cultural affinity, work ethic, education levels and other workforce
characteristics.
To manage attrition and wage-inflation issues, Sitel takes
a multifaceted approach. "Typically, we evaluate internal processes and review the
site from an operations perspective to ensure that we are doing everything that
needs to be done to retain valuable human capital," Shankardass says. "Also, external
forces that are out of our control, such as wage inflation, necessitate creativity
when trying to remain the ‘employer of choice’ in the given region."
ASIA HOT AND WARM
GDP growth, inflation rates and salary increases for professional and
technical workers, variable bonuses as a percent of base salary and
turnover rates in select Asian emerging markets, 2004-2007 |
| |
2004 |
2005 |
2006 |
2007 |
|
China |
|
|
|
|
| GDP |
9.5% |
9.90% |
11.10% |
11.00% |
| CPI |
3.90 |
1.80 |
1.70 |
3.00 |
| Salary
increase |
7.40 |
7.79 |
7.80 |
8.10 |
| Variable
bonus |
15.00 |
14.67 |
15.10 |
10.39 |
| Turnover |
13.90 |
14.20 |
14.18 |
12.90 |
|
India |
|
|
|
|
| GDP |
7.10 |
8.50 |
9.40 |
8.50 |
| CPI |
3.77 |
4.20 |
6.20 |
5.90 |
| Salary
increase |
12.10 |
12.00 |
11.20 |
15.00 |
| Variable
bonus |
20.00 |
31.96 |
35.21 |
30.00 |
| Turnover |
5.50 |
12.00 |
14.20 |
16.50 |
|
Philippines |
|
|
|
|
| GDP |
6.07 |
5.00 |
5.40 |
6.00 |
| CPI |
5.98 |
7.60 |
6.30 |
2.90 |
| Salary
increase |
8.60 |
8.21 |
9.17 |
9.20 |
| Variable
bonus |
16.00 |
22.00 |
26.00 |
20.00 |
| Turnover |
5.50 |
19.00 |
12.00 |
12.00 |
|
Vietnam |
|
|
|
|
| GDP |
7.74 |
8.40 |
8.20 |
8.40 |
| CPI |
7.79 |
8.30 |
7.40 |
7.20 |
| Salary
increase |
8.00 |
8.00 |
10.67 |
8.74 |
| Variable
bonus |
9.80 |
4.00 |
13.53 |
16.46 |
| Turnover |
10.00 |
9.00 |
9.79 |
9.20 |
|
Source: Watson Wyatt Worldwide |
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