How to Scale Up BPO Operations in the Nearshore

As a medium-sized BPO, Collective Solution has approached its strategy to scaling up in and across geographies in the Nearshore by focusing on its existing footprint and moving into new countries where demand exists. It has operations in Honduras and Jamaica and is now moving into Mexico.

“Having presence in each market allows us to have a bigger source of talent pool – for both bilingual and English speakers, redundancy in coverage and diversity, which results in having an enriched and empowered organization,” says Luinell Florentin, Senior VP of Operations.

In the current context of Covid-19, the core factors driving such a strategy need to consider more than just cost savings and return on investment. For Florentin, the key drivers are availability of talent pool, cost effectiveness, and the government response to Covid-19 and guidelines. “With the blended set-up that we now have too, it is critical to also evaluate the strength of the ICT and energy infrastructure,” she says.

“Mexico immediately became one of our top choices given that the BPO industry in the country is among the largest and most mature Nearshore markets” — Luinell Florentin

Mario Marmol, Senior Operations Manager in Honduras who has been with the company for 10 years, adds that it is important to consider location in relation to existing operations. He says that the right location reduces traveling time and operational cost. “It helps to have more streamlined operations and allows business to direct their resources toward their core functions,” he says, adding that cultural and geographical closeness to customers should also be considered.

While there are shared strengths across the Nearshore, each geography offers its own benefits and limitations, which need to be understood before the decision to scale into that geography or to scale up existing provision in that area.

Increasing Value Through the Talent Pipeline

For Marmol, Honduras’ strength in terms of the BPO industry lies in its ability to deliver great value through cost-efficient solutions. He adds that it is a great source of talented and bilingual support. In San Pedro Sula, the industrial capital, nearly 41% of the literate population is bilingual.

“Honduras provides the benefit of the same language and time zones with the clients. As a result, it is easier to collaborate with the outsourced project, and the teams’ development is more easily able to integrate with in-house resources,” he says.

Jamaica has the advantage of being the largest English-speaking country in the Caribbean and is well-positioned to serve the BPO industry, as it is equipped with all needed modern infrastructure within both the BPO hubs and satellite locations.

“The tourism capital of the Caribbean, Jamaica offers business travelers countless opportunities to unwind and have a mini vacation on weekends,” Kaestner Pryce, site leader in Jamaica, says. Pryce adds that currency devaluation trends allow for fewer US dollars to be spent despite increased inflation.

“At a time when hiring in the US is becoming more challenging and more expensive, Tijuana presents an accessible solution for US first scaling at half the cost of a fully loaded FTE in the US” — Josh Nutter

There is a dedicated government agency created to provide potential investors with the requisite support and exposure to the local industry to aid in a positive informed decision. The agency also provides options for investors who are seeking other business opportunities to invest in to diversity a company’s portfolio

The decision to expand into Mexico was driven by business continuity needs. “Mexico immediately became one of our top choices given that the BPO industry in the country is among the largest and most mature Nearshore markets,” Florentin explains, adding that its huge talent pool, geographic proximity, and similar time zone in the US are also plus factors.

Josh Nutter, VP of Business Development, adds that Tijuana was chosen for its unique value proposition of a labor force who understand the US culture with a majority of job seekers previously having lived or worked in the US. “At a time when hiring in the US is becoming more challenging and more expensive, Tijuana presents an accessible solution for US first scaling at half the cost of a fully loaded FTE in the US,” he says.

Addressing Challenges in Changing Circumstances

Scaling up is not without its challenges, though. BPOs need to consider factors such as the relative control of attrition. Pryce stresses the importance of location, noting that, if not located in the hub of the BPO sector, companies could easily outgrow the availability of qualified employees in their segment.

It is also important to identify leadership talent to support growth. “Succession planning and having an attractive compensation package is key,” he says. 

Pryce notes that the ability to identify available sites/buildings to grow the operations is equally crucial, adding that the recent trend is for companies to build their own facilities. “Be sure to check the scalability of the suppliers to meet your growing demand. Not all areas deemed commercial are fully configured to meet unplanned demands.”

Florentin adds: “With Covid-19, we have also found that it’s important to look at each of our site’s government response to the pandemic and the guidelines that come with it.” 

Strategic selection of sites on this basis, combined with consideration of the core business continuity needs makes scaling up easier.