Shared Services Sector Making a Major Impact
Planning Institute of Jamaica (PIOJ) Director General, Dr. Wayne Henry, says the global shared services (GSS) sector, of which business process outsourcing (BPO) is a part, is a key pillar in the country’s economic growth and diversification strategy.
Dr. Henry said marked growth in the BPO labour force is one area in which the sector’s impact has been most evident, noting that there are about 60 firms now operating locally that employ approximately 26,000 persons, according to data from the Business Process Industry Association of Jamaica (BPIAJ).
Additionally, he said information from Jamaica Promotions Corporation (JAMPRO) shows that the industry generated an estimated US$400 million in revenue in 2016, pointing out that the sector is “on a growth trajectory”.
“The real estate, renting and business activities industry, which contains a subset of the BPO sector, has grown from 7.6 per cent in 2006 to 10.3 per cent in 2016 as a share of the services industry,” he noted further.
Dr. Henry, who was speaking at the 2018 Labour Market Forum at the Terra Nova All-Suite Hotel in St. Andrew on Wednesday (April 11), said the positive trends are also evident internationally.
Citing Deloitte Touche Tohmatsu Limited’s 2017 global shared services survey, he said 73 per cent of respondents reported productivity increases of five per cent, up from 70 per cent of participants in 2015.
The report also found that while transactional processes remain predominant within the sector, the adoption of more complex knowledge-based processes is on the rise, which, according to the survey, has doubled, and in some cases tripled, since 2013.
Additionally, Dr. Henry said the survey indicated that the number of operators executing more than three functions continues to rise, moving from 20 per cent in 2013 to 31 per cent in 2015 and 53 per cent in 2017, and that organisations are increasingly emphasising proximity to existing operations or headquarters, as cost remains a top priority when establishing or relocating activities.
In this regard, he said, Jamaica’s proximity to North America is viewed “favourably” by local BPO investors.
“It is, therefore, evident that there is strong potential for the global shared services sector to support both domestic and global growth. We recognise that advancing the development of global shared services within Jamaica, while ensuring integration with other sectors and concurrent improvements in the quality of labour available to the sector, is critical. This cohesive approach is evident in the Five-Year National Strategy for the Development of Jamaica’s Outsourcing Industry, which was approved by Cabinet in 2015,” Dr. Henry said.
Permanent Secretary in the Ministry of Economic Growth and Job Creation, Audrey Sewell, who also spoke at the forum, noted that the strategy targets, among other goals, doubling the sector’s employee complement by 2020.
Among the initiatives, which she said have been undertaken to successfully implement the strategy are (a) establishing an Information and Communications Technology/Business Process Outsourcing (ICT/BPO) Task Force, and appointing a National BPO Coordinator to drive and oversee implementation and updating of the industry’s development work plan; and (b) recruiting an in-market broker to ensure that all elements, which will guarantee the industry’s success, are in place.
Mrs. Sewell explained that the in-market broker works with the task force and oversees the sector’s activities and performance to ensure that Jamaica is competitively BPO-ready and attractive in all aspects.
This, she pointed out, includes strengthening the enabling environment, particularly in relation to the policy and incentive framework; labour market enhancement; infrastructural development; and market penetration.
“These initiatives have paid off, as the sector continues to enjoy a high employment growth rate and has outperformed many of the other (industries),”
Mrs. Sewell said.
This year’s 10th staging of the Labour Market Forum was held under the theme ‘Enabling Growth and Development: Unlocking the Potential of the Global Shared Services Sector’.
It was jointly organised by the Planning Institute of Jamaica and the Labour Market Information Technical Advisory Committee, with support from the Inter-American Development Bank.