Manoj SharmaGuatemala, the largest economy in Central America, has one of the region’s most vibrant outsourcing ecosystems. However, it still trails Costa Rica, which dominates the high-value services segment by attracting global technology majors running far more than traditional BPO operations. Costa Rica has evolved into a nearshore ecosystem spanning software engineering, finance, and cybersecurity, but Guatemala is tilted toward customer support and back-office operations; although over the years, it has made efforts to expand into niche IT services and digital operations.
Industry stakeholders say Guatemala’s business process outsourcing (BPO) sector has the right workforce that US companies want to run nearshore operations: young, cost-competitive, and geographically close. But it’s still grappling with some of the challenges — most notably a shortage of English-speaking talent — that may have stopped it from becoming the most favoured outsourcing destination in Central America.
Of course, English is a problem… (but) we have the mature talent pool with the right expertise the QA testers companies are looking for…Guatemala remains politically and economically stable. That provides a certainty to businesses.
— Eduardo Arévalo, VP of Talent Acquisition at Allied Global and President of the BPO & Contact Centers sector at AGEXPORT
Guatemala ranks 58th out of 116 countries worldwide in English proficiency, according to the EF English Proficiency Index, placing the country in the moderate-to-low English proficiency range, a clear hurdle for outsourcing companies that require high proficiency to manage international clients.
Eduardo Arévalo, Vice President of Talent Acquisition at Allied Global and President, BPO & Contact Center Sector Guatemala – AGEXPORT, says the Guatemalan ITO and BPO industry is highly mature, noting its proximity to the US, favorable time zones, and strong service-oriented cultural alignment.
“Of course, English is a problem… (but) we have the mature talent pool with the right expertise required for the QA testers companies are looking for…Guatemala remains politically and economically stable. That provides a certainty to businesses,” he told Nearshore Americas.
Some argue that a lack of sufficient English-speaking talent is one of the reasons Guatemala’s BPO and ITO industry is still trying to find its footing, despite becoming one of the most valued and mature hubs in Central America. “The existing workforce offers neutral, easily understood accents, but the overall pool of English-speaking talent doesn’t match countries like the Philippines,” says Joselynne Méndez Rodríguez, Investment Promotion Advisor at Invest Guatemala, the agency that works with the public sector to attract investment and expand job opportunities nationwide.
The existing workforce offers neutral, easily understood accents, but the overall pool of English-speaking talent doesn’t match countries like the Philippines.
— Joselynne Méndez Rodríguez, Investment Promotion Advisor, Invest Guatemala
Strong Fundamentals, Weak English Pipeline
Guatemala’s macroeconomic outlook remains strong. As Central America’s largest economy, the country offers steady economic growth, low inflation, low fiscal deficit, and a large working-age population of 11.8 million. The Guatemala BPO sector serves a diversified portfolio of industries, spanning telecommunications, media and entertainment, manufacturing, financial services, and technology, with the latter being the largest client segment. The distribution of services itself demonstrates the industry’s maturity and diversification.
Telecommunications holds the highest share in the BPO services at 35.2%, followed by media and entertainment (13.2%) and manufacturing, retail and e-commerce (10.7%). Some of the biggest US players, including Concentrix, Conduent, Everise, and Telus Digital, have their BPO/CX operations in Guatemala.
The Central American country has strong exposure to American culture; people consume American TV and music shows. However, the education system doesn’t seem to be equipped to make them English-ready, and a dearth of English-speaking talent remains one of the main challenges for companies. “The biggest challenge is that English isn’t taught as part of basic education. Every year 60,000–70,000 students graduate, and most of them — including public-school and even many private-school graduates — aren’t required by law to learn English (roughly 60% of private education is not English-focused either),” Ninoshka Linde, Board Director and Founder, LatamThrives, a C-Level Advisor on GBS, FDI & Global Expansion, told Nearshore Americas.
Guatemala lacks enough English-speaking high school graduates to support the continued growth of its outsourcing industry, according to industry executives. There are structural issues: one among them is university curricula in Spanish, with very few offering English certifications. Both Mendez and Arévalo point to the same set of root problems: a shortage of English-proficient talent, no requirement of English at the graduation level in either public or private institutions, and a heavy concentration of talent and companies in the capital.
Linde thinks the government’s efforts are not enough, as political will is lacking in making the youth market-ready for international companies. “Every 4 years a new government has to be re-educated on why this matters. There’s a narrative resistance: some officials worry teaching English will drive mass migration to the US, so some scholarships have been blocked. In reality, people prefer to stay — a dignified job and income in Guatemala goes further than migrating. People here are family-oriented and want to stay close to home,” she stresses.
Like Arévalo and Méndez, Linde also believes that despite these structural issues, talent quality is high in Guatemala. “Even with a smaller pipeline, Guatemala attracts top-tier call centers because of delivery quality, not volume. About 90-95% of middle management and above in the industry started as frontline agents: proof of the quality of training and career progression.”
How To Fix Guatemala’s Talent Problem
Despite shortcomings, these experts believe the government’s intentions are in the right place, and that efforts are being made to make young candidates job-ready. “Guatemala has strong engineers, doctors, and nurses — but many lack English. One bright spot: after 10th grade, students can choose a 3-year technical/vocational track, and there are related initiatives like “Guatemala No Se Detiene” offering scholarships, though progress since 2021 commitments is unclear,” Linde maintains.
Arévalo says AGEXPORT has partnered with INTECAP (Guatemala’s Technical Institute for Training and Productivity) to provide scholarships and training courses. There’s a legislative push — currently in its third reading — to make English mandatory for graduation in public and private schools. The government’s Guatemala Moving Forward is attracting new businesses. Talks are on with the government to increase the tax incentives for BPOs from 10 years to 15 or 20 years.
But how long will it take for Guatemala to fully overcome the talent crunch and language problem? Arévalo acknowledges it’ll take time for the policies to have an impact. “I don’t think it will produce immediate results. But within three to five years, we should begin to see meaningful progress.”
The government needs structural change, not surface fixes — starting with mandating English education from the root. This isn’t about isolated players acting alone but transforming a generation the way GBS transformation played out in India and the Philippines, and is now happening in Egypt, Ethiopia, and South Africa.
— Ninoshka Linde, Board Director and Founder, LatamThrives
Call for Structural Changes Amid AI Threat
Guatemala isn’t just an agricultural exporter of coffee, bananas, and sugar, but its knowledge economy is one of the strongest in Central America, generating $882 million in export revenue, as per the latest sector figure published by AGEXPORT. The sector supports around 170,000 people, making it one of Guatemala’s largest formal service employers.
But beyond the talent shortage, AI has emerged as another challenge, and many companies are no longer hiring junior software engineers — a phenomenon that’s prevalent across LatAm. The number of graduates hired by US tech firms has dropped by nearly 50% compared to pre-pandemic levels, according to a study by venture capital firm SignalFire.
Ninoshka believes AI won’t take over everything in markets like Guatemala — it will absorb certain operational parts, but people with different skill sets will still be needed. “The government needs structural change, not surface fixes — starting with mandating English education from the root. This isn’t about isolated players acting alone but transforming a generation the way GBS transformation played out in India and the Philippines, and is now happening in Egypt, Ethiopia, and South Africa.”
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