Montego Bay, on the Brink of a Major Upgrade?

Montego Bay is one of Jamaica’s premiere locations for the global services industry. The so-called “Second City” is known worldwide as a great vacationing spot, but Jamaican business strategists have been working to maintain momentum as the destination seeks recognition as a genuine global business services (GBS) hub. 

Enough service providers have seen success in Montego Bay. Teleperformance, itel, ADS Global and ContactPoint 360 are but a few of the firms that have done well in the city. Such levels of success have turned “MoBay” into the second most popular destination for BPO investment in the island, surpassed only by Kingston. 

As well as MoBay has done, though, there is still room for improvement. Jamaica is at the tail-end of an island-wide, US$15 million upgrade to its GBS sector. This upgrade comes amidst an accelerated transformation in the BPO industry and its higher-value equivalents, making the plans of the Jamaican authorities even more urgent.

For Montego Bay, the trend towards higher value services in GBS, plus the search for alternative delivery locations beyond capital cities and other main metropolitan areas, present a chance to elevate its profile as a premier destination for GBS even further.

The next frontier

Tier-2 and tier-3 cities have become the talk of the town among many sourcing executives in the business world. High demand and climbing rates have made it desirable to establish alternative geos which provide access to a fresh labor force, lower costs and, in some cases, a different set of technical and human skills.

Jamaica is no exception. Service providers are testing sites outside of Kingston. Sagility, for example, recently expanded to Angels –a city just outside of Spanish Town and less than an hour’s drive from Kingston– just last year. And the company is already eyeing Mandeville and St. Thomas for its next move.

Montego Bay is the best positioned city in Jamaica in terms of alternatives to Kingston. As mentioned earlier, several big and medium-sized BPO providers have a successful record in the city to prove its credentials. Itel CX CEO Yoni Epstein has been quite open about his preference for MoBay. Conrad Robinson, Global Digital Services Manager at JAMPRO (Jamaica’s investment promotion agency) once refered to MoBay as “the next frontier of development in Jamaica”.

But MoBay has its detractors too. Sagility’s Delivery Head in the Americas, Anand Biradar, described the city as “too spread out” and dominated by tourism.

“There’s a lot of tourism there [in Montego Bay]. During the peak tourism [season], you make more money in tips than what you make in the global services industry,” Mr. Biradar told NSAM in an interview. “There is a seasonal churn in Montego Bay which is non-existent in Kingston.”

The tourism sector is one of the main sources of employment for young an inexperienced workers in Jamaica. These characteristics are common in the pool from wich traditional BPO providers source their talent, making the tourism industry one of main competitors when it comes to BPO recruitment. Add to that an expected boom in Jamaica’s hospitality industry and you got a recipe for a tighter labor market.

Some service providers argue, nevertheless, the profile of BPO/GBS workers has been trending towards more a specialized skill set.

“The tourism industry job market is much different than the positions we offer from the standpoint of the hours of operation and work requirements,” said Randy Arellano, VP of Global Sales & Marketing at CX vendor DATAMARK. “Compared to the tourism industry, our team members must demonstrate a higher level of education, and they enjoy being in more of a corporate setting with a professional culture that provides measurable career advancement opportunities, whereas tourism may not.”

Moving up the value chain

Back in 2019, Jamaica launched a US$15 million program –funded by the Inter-American Development Bank (IDB)– to increase employment in the global business services sector and elevate the capabilities of the local workforce to higher-value segments, namely knowledge process outsourcing (KPO) and information technology outsourcing (ITO).

The advent of AI has made this move towards higher-value services more urgent. Generative AI brought a new wave of automation that’s expected to hit considerable segments of the workforce if no upskilling is done to incorporate them into a new paradigm of service delivery. 

In 2015, Jamaica’s BPO industry directly employed 17,000. By early 2023, the number had surpassed the 60,000 mark, according to data from JAMPRO. Jamaica’s GSS program aims to employ 70,000+ people in the global services industry by 2025.

If the Jamaican authorities succeed in their GSS program, Montego Bay might end up with a talent pool that’s sizable and market-ready enough to meet the demands and challenges of the global services sector. 

That upgrade won’t come without its challenges, though. The IDB itself has warned about the prospect of vulnerable groups being left behind in the jump to higher-value services within GBS. For Jamaica in particular, the more concerning threat comes from a widening of the gender gap.

The Global Services Association of Jamaica (GSAJ) estimates that about 71% of the people employed in global services in the island are women, with the rest (29%) being men. The GSAJ divides the GBS industry into three sub-sectors: business process outsourcing (BPO), knowledge process outsourcing (KPO) and information technologies outsourcing (ITO). In Jamaica, the vast majority (96.7%) of workers are employed in BPO. Employment in KPO and ITO –which require more sophisticated processes and knowledge– represent 1.52% and 0.82%, respectively.

Women dominate Jamaican GBS if one accounts only for sheer employment numbers. Yet, the female workforce remains mostly relegated to jobs that are less valued by the market. When taking a look at the KPO and ITO industries, which are more STEM-oriented and better paid, the workforce is mostly male.

This means that female GBS workers are considerably more exposed to the impact automation than their male counterparts. As Jamaica seeks to move up in the value chain, it will have to make sure that its female workforce is not left behind.

Jamaica seems to be moving forward in its effort to position itself globally as a proven source for high-value GBS. As it does, MoBay could already be shining in the eyes of potential investors as their destination of choice.