In a year of shake-ups for Latin America, Colombia stands out as one of the countries that felt most shaken. Following months of mass protests against former President Ivan Duque’s policies, the country elected Gustavo Petro as its next head of State, putting power in the hands of the left for the first time in Colombia’s modern history.
Results have been mixed. Petro has yet to prove himself to the voters that bet on him as an agent of change, while convincing the markets that he’s not an all-out radical that plans to reshape Colombia’s economy, sledgehammer in hand. Hopes are high, but uncertainty remains, with it turning into bursts of fear every now and then.
And yet, Colombia made it to the top of the latest Offshore BPO Confidence Index, outmatching industry giants such as India and the Philippines with a confidence score of 85.1%.
The BPO Confidence Index –developed jointly by Ryan Strategic Advisory and Cognitive Copy– scores the levels of confidence that industry executives attribute to specific countries. To do so, survey respondents evaluate factors such as the robustness of the labor market, the health of the local BPO ecosystem, security and the levels of political/economic stability.
This year’s report underlined the growing relevance of stability as a differentiator in the BPO industry. After a couple years of navigating stormy waters, companies are searching for spots of serenity that will let them heal and grow.
“Among the study’s principal findings is the emergence of stability as a critical differentiator. It has become more important than ever for BPOs to operate in a location unencumbered by political, economic or public security disruptions,” states the report.
Colombia scored relatively decent marks on stability-related metrics within the index. It ranked third overall for political stability (with a score of 76.7% confidence) and fifth in economic stability (scoring 71.1% confidence). The latter was, alongside security, the country’s worst performing metric.
The report attributes the lower marks on stability for Colombia to the new political landscape. Though investors know better than to be outright alarmed by Petro’s presidency, doubts remain on whether his administration will be able to successfully navigate the tough economic landscape that lurks above all of Latin America.
“It has become more important than ever for BPOs to operate in a location unencumbered by political, economic or public security disruptions”—Offshore BPO Confidence Index
In other words: Colombia managed to inspire the most confidence among BPO executives in spite of their qualms about political and economic stability. How did that happen?
Colombia Wins on Talent an Ecosystem
Colombia’s performance in the BPO Confidence Index –which evaluated 17 territories– was outstanding across the board, managing to remain in the top five for all categories. It outperformed everyone in two, though: local labor market and BPO ecosystem.
The labor market category measured the availability of talent –from agents to executives– for hire, the presence of voice and non-voice agents and the push for language and CX skills coming from the public education system. Given the profile and needs of the BPO industry, and the tightening of the labor market suffered through the years of the pandemic, it’s no surprise that the report underlined its relevance for confidence in 2022.
“The availability of talent at a time when BPO-oriented labor is tighter than ever is a crucial determinant in the success of different offshore and nearshore locations,” reads the document.
Colombia was praised in the report for its “capacity to provide CX managers, executives, supervisors and front-line agents”, especially for digital skills. That’s high praise, considering that talent availability has become a major driver of Nearshore BPO investment, surpassing even location-related factors.
Nevertheless, the report added a caveat: the Colombian government has yet to prove that its education system can deliver solid results in English training. For the moment, industry players remain “lukewarm”.
Colombia also gained praise for the strength and health of its BPO ecosystem, with the report making special mention of the country’s investment promotion agency, ProColombia, as well as the local industry associations that lobby in favor of BPO investment and development.
🇨🇴 @Colombia exceeded US$2.6B in BPO sales in 2021, representing 19% of the total transactions in the region, occupying the 1st position at the regional level and surpassing other markets.
— PROCOLOMBIA (@PROCOLOMBIACO) October 21, 2022
The latter speaks to the relevance of organizations –public and private– that push for the industry from within. Top performers in the BPO ecosystem category include long-time industry hubs, such as India and the Philippines, as well as emerging players, such as South Africa.
It remains to be seen how the new government will affect ProColombia’s approach to the country’s BPO industry. Former diplomat Carmen Caballero was named as the IPA’s new president, and her profile points to tourism as a foreign investment priority. Meanwhile, the country’s BPO association has already reachead out to Petro’s government.
Don’t Discard Stability
Although Colombia achieved top ranking in the BPO Confidence Index in spite of qualms over its political and economic future, the importance of stability cannot be discarded outright.
The report underlines how the turmoil of the last couple years affected the spirit of industry players. The COVID-19 pandemic, the supply chain crunch, high inflation and, more than anything, the Russian invasion of Ukraine, have painted a disquieting picture of the future in the minds of BPO executives.
“The implications of this war [in Ukraine] have dramatically shuffled the cards, causing significant impacts on the delivery of business services into key demand markets from overseas locations,” states the report.
With that in mind, stability emerged as one of the most relevant factors for confidence in the industry, boosting the profile of those countries that were able to maintain it. The Dominican Republic, for example, ranked third in the overall BPO Confidence Index thanks in great part to its top performance in political and economic stability.
“This year’s results show that BPO managers have high confidence in countries where the industry has been flourishing for the past two decades”—Offshore BPO Confidence Index
India, the Czech Republic and South Africa also ranked high –within the top 10– thanks in part to a good performance in one or both stability metrics.
The Old and the New
This year’s index saw the usual suspects solidify their status as top players in the BPO industry. Nevertheless, contenders are emerging amidst the global chaos, hunting for opportunities to position themselves as preferred locations, if not major industry hubs.
“This year’s results show that BPO managers have high confidence in countries where the industry has been flourishing for the past two decades, but several emerging locations are agitating for leading positions in the 2022 rankings, signifying that length of service is not necessarily a determinant of success”, the report points out.
India, the Philippines and –to a lesser extent– Colombia have for long proven their credentials as destinations for BPO investment. Nevertheless, 2022 saw the emergence of new contenders, such as South Africa, which ranked sixth in the overall index, above the Philippines, Romania and Mexico.
In spite of mediocre to low scores in infrastructure and security, South Africa made it to the top 10 thanks to strong performances in its BPO ecosystem (second) and economic stability (third). It’s no surprise then that industry players are eyeing the country with increasing interest, feeding its reputation as a potential hub.
Though the landscape won’t change overnight, the report points to the opening of possibilities for 2023, prompted by the (sometimes unpleasant) surprises seen in the past couple years.
“Moving into 2023, the extent to which outsourcers can drive delivery excellence in newer, dynamic offshore destinations has the potential to shuffle the proverbial cards even further,” the document points out.