Sun | Jul 12, 2020

Editorial | BPOs face threat from AI

Published:Wednesday | June 3, 2020 | 12:22 AM

TWO YEARS ago, Richard Byles’ highlighting of the need for upskilling, to ensure better-paying jobs in call centres, upset a lot of people in the industry. But in the wake of the COVID-19 pandemic, the sector’s bosses should, though not necessarily along the lines proposed by Mr Byles, be taking a good, hard look at their business model.

It is a matter in which the Government, too, should have keen interest. For, the technological innovations being employed by firms in the new environment could lead to a flight, or evaporation, of call centre jobs from Jamaica if the country is inattentive, or fails to adjust quickly enough to the development.

Prior to the onset of the coronavirus, Jamaica’s business process outsourcing (BPO) sector, though small by standards of the global titans, such as India and the Philippines, employed 40,000 people, or approximately three per cent of the island’s employed labour force. Its 60 companies, according to Government estimates, grossed over US$600 million.

In other words, the BPO sector, whose job count the Government hoped would double by 2022, is important to Jamaica’s economy, in terms of employment creation and foreign exchange earnings. It is little wonder that when the Government imposed its first lockdown of the economy, it created carve-outs for BPOs to ensure that they continued to serve their clients, mostly in the United States. It was only after a cluster of COVID-19 infections at one call centre that the Government imposed a temporary shutdown of the industry.

The problem for Mr Byles – now the governor and chairman of the central bank, but was the chairman of Sagicor Group when he addressed the issue in 2018 - was that call centres, like too many sectors in Jamaica, operated too low down the global economic food chain. The BPO companies, he complained, delivered mostly telephone-answering-type jobs.

“… We want the BPO business where lawyers are given a part; where accountants are doing work; where paramedics are giving advice,” Mr Byles said then. “We want to be in the high-level BPO business.”

The speed with which Jamaica may have to transition to these higher-levels emphasis of better-paying jobs may be accelerating much faster than Richard Byles, and the industry, imagined. The existing business model, to which Mr Byles referred, and is most common around the world, relies primarily on having, as the industry terms it, “butts on seats” – people in large offices, mostly fielding customer-service-type telephone calls.

A NECESSARY CONVERSATION

COVID-19, and the demand for physical distancing to slow the transmission of the virus, has disrupted this type of operation. Having large numbers of people sitting close together is no longer tenable.

BPO companies, in Jamaica and elsewhere, have partially compensated by downsizing, or reconfiguring, the main offices, and by having staff work from home. The latter arrangement, though, is not always feasible, either because people’s living conditions are inadequate; stable, high-speed Internet is unavailable; or concerns about the security of client information. Internationally, the companies, and their clients, have been seeking workarounds.

So, in some instances, BPO clients have brought the outsourced operation back onshore, hiring staff themselves.

But even before the advent of COVID-19, firms have been increasingly veering to the use of automation and artificial intelligence (AI) technologies, including artificial conversation entities (ACEs), or ‘chatbots’, to take over some of the routine tasks that humans did. This process is accelerating, making jobs in Jamaica’s call centres vulnerable, especially in the absence of upskilling.

This, however, doesn’t mean the death of BPOs. Indeed, some firms are themselves employing AI and ACEs to service clients’ needs and to help enhance the efficiency of their live agents. But survival with a significant number of jobs, in the medium to long term, will clearly demand a climb up the food chain.

It is a conversation that the industry should be having. Indeed, the Government, which has facilitated the industry, including with taxpayers’ money, may want to give it a nudge.