Business cluster looks to expand Kern’s outsourcing industry

Efforts are afoot locally to boost Kern’s profile as a provider of business process and “second office” outsourcing services to major markets outside the county.

A cluster of Bakersfield companies that already sells such services around the country came together in 2020 and 2021 as part of the B3K Prosperity economic development collaboration. Competitors in other respects, they forged a list of priorities, including marketing and workforce development initiatives, before running up against a lack of money.

More recently, the project has won grants from a pair of national banks and an offer to institutionalize the endeavor as a standing council of the Greater Bakersfield Chamber of Commerce, reinvigorating an effort seen as having the potential to generate and retain good local jobs.

Soon the focus will be on signing up large organizations within the county that might contract with locally based business service providers. Success there could drive a later campaign for recruiting customers in places like Los Angeles, San Diego and San Francisco, where costs in Kern compare favorably.

The effort has illustrated an aspect of the B3K process that previously received little attention — the need for setting aside competitive impulses to achieve mutual gain. While some participating companies have shared customer referrals for years, discussions had to take place before members of the group ultimately lowered their defenses and collaborated on a project they came to see as benefiting them all.

“If you can keep that in mind and play nice together, everyone wins. Because every client has to be taken care of,” said work group participant Chris McGlasson, CEO of LANPRO Systems Inc., a Bakersfield-based managed service provider serving small and midsize companies.

Progress has come more slowly in the business services cluster than it has in other opportunities highlighted by B3K, such as aerospace and cultivation of local entrepreneurship, both of which have met initial milestones. Participants in the second office group attribute their group’s delays to a shortage of financial and policy support.

After going months without a group meeting, they were delighted to learn this month that Bank of America has donated $33,000, and Wells Fargo $20,000, specifically in support of the cluster effort. Chamber President and CEO Nick Ortiz said the money will allow his organization to hire staff that will help make Kern County a go-to for business services in California.

When B3K launched in early 2020 with assistance from the Washington-based Brookings Institution, Kern’s so-called second office cluster was identified as an opportunity industry partly because it trades outside the area, meaning it has clients in other areas instead of depending on only local sales.

Executives in the industry locally, working with Brookings staff and an assistant professor at Cal State Bakersfield, came up with a series of proposals for taking the cluster to a higher level as a way to increase local employment in jobs that pay well and offer upward mobility.

One idea was a digital marketing campaign establishing Kern as California’s best place for automated processing and back-office support, somewhere with a relatively low cost of living and a convenient time zone.

Another proposal the work group came up with was sharing customer referrals among the local cluster’s membership.

Work group co-chairman Jim Damian, CEO of Bakersfield business process outsourcing company Stria LLC, said that already happens to a degree and that a concerted effort to do more of it may “expand market share locally by collaborating.”

Also of interest to the work group, Damian said, was creation of a so-called passport program guiding future employees through job skills they need — how to build a database, for example, and efficiently use off-the-shelf software — before applying for an entry-level position within the industry.

Sumita Sarma, who teaches management at CSUB, said by email she is particularly enthusiastic about the passport idea. Local educational institutions are already working to fill training gaps in data analytics, programming and what she called growth mindset, she wrote, adding the goal is to “address these accordingly in a way that (workers) find satisfying high-quality jobs within Kern.”

Ortiz at the chamber listed three initiatives he expects to see happen by the end of this year.

Local business service companies need to be catalogued and their areas of focus highlighted, Ortiz said by email. Additionally, strategies must be identified for fostering digital skills as a workforce development effort, he wrote.

Plus, Ortiz said efforts should be made to persuade large public and private organizations in the county to contract with businesses in the local cluster.

Big-market promotion work will be part of the strategy, Ortiz wrote, “but our initial goals will be to really set up the internal/local supports for the sector before launching an external-facing campaign.”

Work group co-chairman Michael Hansen said he hadn’t been aware of the bank grants or the chamber’s plan to hire staff in support of the effort; he called both developments great news. He agreed with the plan to do an internal campaign to “make sure that we’ve got some traction and practice before we go national.”

Hansen, president of Bakersfield-based records management company Advanced Data Storage, expressed hope the B3K’s business services initiative will help reverse the trend of trained employees leaving the area in search of advancement opportunities.

“I think it’s got a lot of potential,” he said.

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