Call-centres that are closer to home

On a sunny evening in Guatemala City, some of Transactel's employees - in tattered jeans, and with tattoos and piercings - are chilling in the outdoor cafe. Some are playing football on a generously sized pitch, which is wrapped in mesh since they are on the seventh floor of the building housing the call-centre company's headquarters. Inside, some of their colleagues are practising their Rock Band and Guitar Hero skills.

In Guatemala, where some employers have scant regard for workers' rights or welfare, such signs of an employee-centred approach are striking. "Our focus is on our workforce . . . if we retain them they will give a better service. It is as simple as that," says Transactel's co-founder and president Guillermo Montano, a tall 40-year-old who bubbles with boyish energy.

When he first flirted with the idea of setting up call-centres in Guatemala in 2004, few of his fellow Guatemalans thought he would succeed. The prevailing wisdom was that there was no way the Central American country of just 14m people could compete with, say, India or the Philippines, where the call-centre industry was well-established.

In addition, there was no one to learn from, not even any rivals. "We were basically making it up as we went along," says Mr Montano. "We were all alone as we were the only call-centre in the country," he adds, speaking at Transactel's headquarters, situated amid the glass-fronted shopping malls and car showrooms on Guatemala City's wealthy if inelegant Los Proceres boulevard.

"We felt lost," he continues, "but the huge advantage was that you can shape the industry to your standards . . . the bad side is that you cannot learn from others. You can bring in concepts that you have seen abroad, but implementing them was difficult because nobody in your home market knows how to do it."

Now call-centres have become one of Guatemala's most dynamic business sectors, and employ more than 9,000 people, compared with none when Mr Montano and his co-founders started. There is ferocious competition between about a dozen operators that include US-based NCO and Genpact, and France's Capgemini. Even companies with a heavy presence in India, such as 24/7 Customer, have joined the scramble for market share in Guatemala. In­deed, a number of North America-based companies that initial­ly went to Asia for call-centre services are now choosing "near-shore" op­tions such as Guatemala and the rest of Central America.

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In that market, Transactel is the leader. The company employs 4,000 in Guatemala and another 2,200 across the rest of Central America. It has 26 clients, of which 20 are US companies and three are Canadian. Mr Montano declines to give a precise figure but indicates that annual revenues are in the region of $100m.

Mr Montano admits his call-centre business came about almost accidentally. Frustrated by a series of local-hire jobs with multinationals, he and two childhood friends began offering debt-collection services for Bell South, one of the telecoms operators in Guatemala.

"We were working out of our own homes and we were 'eating crap', but at least it was our own business," he says. When Bell South suggested Mr Montano and his friends should offer a full range of telephone-based customer services, they soon saw that Guatemala had advantages over Asia for servicing US companies.

The first is location. Guatemala is on Central Standard Time, making it convenient for US-based executives. When travel is necessary, with about 20 short, direct flights a day between Guatemala and the US, it is a dream for US executives faced with the alternative of a punishing 16-hour flight to Manila, or the dry-eyes-and-swollen-feet, 24-hour run to Chennai or Delhi.

Guatemala's second advantage is its strong association with US culture. With an estimated 2m Guatemalans living in the US, most families have a relative who is living or who has lived in North America. "We're extremely Americanised," says Mr Montano. Roughly 60 per cent of his staff have either resided in the US or visited it.

However, even those advantages could not help Transactel with its first and main difficulty, which was - as for most small businesses in Latin America - establishing credit lines. When the founders were still funding operations with savings and salaries, the banks turned their backs on the fledgling company. "They just said 'no'." The business ran out of money three times. "Being in that position makes you contemplate failure, and fear it. It makes you question whether you made the right choice about your in­dustry, your business model and even about whether you were cut out to be an entrepreneur," says Mr Montano.

Eventually, the founders faced a dilemma. Caoba Capital, a Central American private equity firm, wanted to back the business. It also wanted a share of the equity and took 25 per cent in 2006. Private businesses throughout Latin America balk at this often vital step because of the psychological effect of selling their "baby". But, Mr Montano says: "We realised that large potential customers were looking for a company with a global footprint and that most were looking for a 'one-stop solution'."

In 2008, Caoba and the other partners sold their share of Transactel to Telus International, the global arm of Canadian telecoms provider Telus, leaving Mr Montano as a significant minority shareholder. As well as president of Transactel, he has been appointed president of Telus International Central America. "We always knew that Caoba's involvement wasn't going to be for ever," says Mr Montano. But he argues that the fit with Telus is good because it shares the founders' values and culture.

Meanwhile, Transactel is starting to experience bottlenecks in the local jobs market, particularly for English-speakers, says Mr Montano, who welcomes plans for a government initiative to make English compulsory at all universities.

He adds that the Guatemalan call-centre sec­tor as a whole suffers bec­ause employers are not allowed to hire on an hourly basis. "What that means, in effect, is that you cannot hire people on a part-time basis," says Mr Montano. He believes employees and businesses would benefit from flexibility, and has met with government ministers to discuss the issue.

Overall, Mr Montano has won a reputation in his country as one of Guatemala's brightest and most innovative entrepreneurs - not bad for someone who started out working from home and without any staff.

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