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The Rapid Growth of the Nearshore BPO Market

At first glance, it may seem like the rapid growth of the nearshore BPO market occurred overnight. But, in fact, the governments of Mexico and its Latin American and Caribbean neighbors spent the better part of the last decade positioning themselves as key BPO players.

Through investments in infrastructure and the education of their labor pool, as well as attractive tax incentives to outsourcing firms, countries south of the US border have been able to leverage their geographical proximity and emerge as the preferred choice for U.S. firms seeking a BPO partner.

The nearshore BPO market experienced a growth spurt of 53% between 2017 and 2018. What precipitated this growth? And most importantly, will partnering with a nearshore BPO improve your company’s customer experience, otherwise known as its “CX factor?”

India Dominates Call Center BPO Industry

In 1998, entrepreneur Pramod Bhasin, started India’s first call center with a novel idea: English-speaking Indians can field customer service calls half a world away for a fraction of what US corporations were currently spending onshore.

General Electric was one of the first corporations to partner with Bhasin. Eventually, several Fortune 500 companies, including CitiGroup, JP Morgan Chase, and Hewlett Packard, jumped on India’s call center BPO bandwagon.

Mexico, Latin America and the Caribbean Stake Claim with Nearshore BPO

Countries to the south of the US border recognized they had an advantage India didn’t. With NAFTA over ten years old, the American public had grown accustomed to and, more importantly, accepted US companies outsourcing to these southern neighbors.

Mexico already had ties to US corporations through manufacturing. Forecasting that the BPO call center industry would grow, governments throughout the region began to position themselves as desirable destinations for BPO call centers.

According to a 2009 report, titled “Nearshore Attraction: Latin America Beckons as a Global Outsourcing Destination,” governments south of the border began to invest in infrastructure, promote education among their workforce, and offer attractive incentives to companies seeking a home base for their BPO.

By 2009, Brazil was already home to 1.7 million BPO workers. Chile offered attractive incentives to BPO investors, such as co-funding pre-investment studies and real estate leases. By 2010, Colombia earned the highest rating in Latin America from the World Bank for “ease of doing business.” And

Costa Rica’s good business environment and stable government meant it already had relationships with important US companies, such as Intel.

Nearshore BPO Call Centers Flourish

Proximity to the US is just the first of many advantages of nearshore BPOs. Businesses can build a more meaningful partnership when leaders can take a relatively short flight to visit their call center location. In addition, being in a similar time-zone as callers helps attract quality workers less likely to take on a shift during odd hours.

Call center BPOs based in Mexico, Latin America and the Caribbean are better positioned to assist the large number of Spanish-speaking customers in the US. And BPOs in the Western hemisphere share a cultural affinity with US callers that’s difficult for operations in farther locations to duplicate.

India’s BPO Inflation Makes Room for Nearshore BPOs

The trail blazers in any industry are sometimes negatively associated with its early challenges. With positive memories of service quality from onshore representatives fresh in their minds, US and UK customers didn’t warm up to Indian BPOs immediately. On their end, BPOs based in India were still educating their workforce on the finer points of call center service.

And while India’s call centers get high marks for quality today, back in 2011, many companies were ready to call it quits on the country’s home-grown BPO industry. Here in the US, companies were ready for another outsourcing location. They started to pay attention to governments in the West that had been promoting their BPO readiness.

Nearshore BPO Delivers Quality Service

Today, nearshore BPOs are competitive and attractive options for US companies looking for a BPO partner.

For the first time, Colombia ranked first in the 2021 BPO Offshore Confidence Index, beating out 11 other countries, including India. The outstanding rating considered factors such as government support, infrastructure, talent availability and economic stability.

But the win was momentous for all of Latin America, Mexico, and the Caribbean. It proved that Americans’ southern neighbors are overcoming the negative bias of the past to become respected competitors in the BPO marketplace.

Are you ready to find a nearshore BPO partner with experience in your industry? Contact Insight BPO today.

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