Call Centers and the Generation of Formal Employment

In the 1970s, 80s, and 90s, the free trade zones in the Dominican Republic were, with few exceptions, synonymous with textiles—that is, assembly-line factories full of people doing the same tasks. Today, the reality is completely different.

This sector has experienced remarkable diversification over recent years. In 2010, as a reference year, apparel and textiles accounted for 53%, while now they represent only 19%, according to export value.

Medical and pharmaceutical supplies, which seven years ago accounted for 7%, now represent 26%, while electrical products and appliances rose from 12% to 16% during this period. Tobacco and derivatives, as an activity, increased from 6% to 14% between 2010 and 2017. Jewelry, however, lost ground, dropping from 10% to 7%.

In this diversification process, call centers entered the scene, born from the emergence of a new need between companies and their customers.

The National Council of Export Free Zones (CNZFE) recorded 20,177 direct jobs generated by call centers by the end of 2017, which are undoubtedly an entry point into the labor market for young people who often have no prior experience. In most cases, these are graduates of the English immersion program run by the Ministry of Higher Education, Science, and Technology.

Call centers give young people the opportunity to become productive, independent contributors to their households. Just consider what it means for a family not to have to subsidize their children’s education. This, of course, translates into a better quality of life and greater purchasing power.

According to official figures, the Dominican Republic has 72 call center companies, all operating under the free trade zone regime. They represent 5.4% of the total accumulated investment and generate 12.2% of the direct jobs in that economic sector.

Regarding their direct contribution to the economy, they generate around RD$1,518.6 million in payments for electricity services, Infotep, water, social security, and telecommunications. Approximately 50,000 people are employed in these companies.

For José Manuel Torres, executive vice president of the Dominican Association of Free Zones (Adozona), the best business the country can make as a state is to invest in the development of this sector, as it has been proven to return RD$7.00 for every peso counted in incentives.

An Adozona report states that the Dominican Republic is among the leaders in formal job creation in Latin America with 165,724 jobs, surpassing Honduras (146,000), Nicaragua (115,050), Brazil (87,851), Costa Rica (82,086), El Salvador (74,000), and Colombia, which employs 67,605 people in the sector.

Dominican free trade zones also lead in export volume in the region with US$5.695 billion, surpassing Costa Rica (US$4.729 billion), Chile (US$3.710 billion), Colombia (US$3.093 billion), Puerto Rico (US$3 billion), Nicaragua (US$2.752 billion), and El Salvador, which exports US$2.521 billion. Whether through call centers or any other sector, formal job creation is always healthy for an economy.