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The outsourcing sector continues to evolve, with stakeholders now recognising three distinct revenue streams. However, these areas are very diverse resulting in the authorities being able to […]
The outsourcing sector continues to evolve, with stakeholders now recognising three distinct revenue streams. However, these areas are very diverse resulting in the authorities being able to […]
The outsourcing sector continues to evolve, with stakeholders now recognising three distinct revenue streams. However, these areas are very diverse resulting in the authorities being able to capture only incomplete data for the sector, one of its spokespersons has said.
“We want more reliable data to better advocate for the sector,” Anand Biradar, president of the Global Services Association of Jamaica, GSAJ, formerly known as the Business Process Industry Association of Jamaica, BPIAJ, told the Financial Gleaner in an interview.
The GSAJ, the outsourcing sector’s lobby group, and Jampro, the investment marketing arm of the Government, want to improve the methods of collecting data on the sector, prior to the industry hitting US$1 billion in annual revenue. The solution devised to solve the data collection problem involves hiring a consultant to tally the revenue and employment contribution of all the players in the widened sector. The methodology will then be shared with the Statistical Institute of Jamaica.
Some 85 per cent of the sector is represented by GSAJ but the work of the consultant will also track those entities outside the group, Biradar said. “The GSAJ is data driven, so we are happy for this development,” he noted.
Jampro indicated in a procurement document seeking a suitable consultant and published by the government information arm, the Jamaica Information Service, that information on the economic impact of the outsourcing sector is now limited and mainly from anecdotal sources. The agency stated that one of the issues relates to the industry being split into three main activities: business process outsourcing, BPO, knowledge process outsourcing, KPO, and information technology outsourcing, ITO.
“Therefore, the sector’s contribution is not shown in the standard reporting format in STATIN’s publications,” Jampro said in the document.
“The consultant is expected to provide technical support to STATIN for the delivery of annual GDSS (Global Digital Services Sector) supplementary tables as well as support the publication of the first GDSS supplementary tables,” according to Jampro.
The consultant will have 12 months to produce the deliverables of the job. The deliverables include the establishment of the mapping of companies undertaking GDSS activities, classifying these establishments by industrial activity and employment size. and calculating GDP estimates and its components (such as output, intermediate consumption, value-added revenue). The job includes measuring training, compensation, taxes on production consumption of fixed capital and operating surplus, and aggregating estimates of BPO, KPO and ITO as distinct segments.
The outsourcing sector has grown at an annual rate of about 16 per cent since 2012 with the pandemic further accelerating its growth in the past two years. Its annual revenue in 2022 grew to US$780 million from US$230 million in 2012, according to Jampro. But not everyone agrees with that figure. Biradar thinks it is closer to US$850 million. “Yes, the sector needs better statistical economic data,” he added.
Biradar explained that the main challenges include identifying the players, quantifying the income and streamlining the way entities report employment and revenue. The sector employs roughly 50,000 persons, with plans to grow that figure to 70,000 by 2025 as part of the public and private sector development strategy.
The sector remains on the path towards US$1 billion in annual revenue within five years. However, it’s said to require improved infrastructure and remote work policies to catalyse that growth. The sector wants a permanent work-from-home policy. Nearly half the staff or 20,000 work remotely from home since the pandemic. This is said to have put pressure on workers, many of whom are young, to set up dedicated office space at home. Other challenges have been identified as including the relatively high price of electricity and the fluctuations in internet speeds which put the sector at a disadvantage when compared to competitors in Latin America.
“Companies within the Special Economic Zone are supposed to work from within the confines of the office,” the outsourcing sector representative said, adding that outsourcing firms were given a temporary waiver during COVID-19.
Source Financial Gleaner