Bianca WrightThe Philippines’ loss has been Latin America’s gain when it comes to call center growth in the past year. Expansion into nearshore Latin America increased 53% over the previous year, according to Site Selection Group’s Global Call Center Location Trend Report 2019. The report found that more than 25,000 jobs were created at 34 announced projects in Latin America and the Caribbean. The growth was driven largely by the need to consolidate pan-Latin American projects and to serve customers in high-cost locations such as the United States.
But King White, CEO of the Site Selection Group, says that the region is benefiting from the Philippines’ decreased growth. “The Philippines has become extremely mature, so a lot of the growth we once saw in the Philippines is now migrating a bit to Latin America,” he says.
Jamaica was the shining star for the Caribbean, according to the report, experiencing significant growth over other locations. White explains: “Their exchange rates have been consistently going down over the last five years. So their labor costs have really come down significantly and that, combined with the excellent English speaking talent, has resulted in significant growth.”
In Central America, Guatemala, Honduras, and Costa Rica continued to draw attention from the contact center industry. White noted that Costa Rica’s growth was primarily in higher end projects, rather than traditional call center ones. Guatemala and Honduras have not seen the same volume of deals as other geographies, but they have had one or two large deals, resulting in their climbing the ranks in the region.
“Mexico has had a real comeback,” White says. “Clients are looking for something even closer to the US, nearshore is possible, and there is a new level of comfort with Mexico.” Mexico and Jamaica were the largest in terms of growth. White believes that Colombia will have a big year and be a real hot spot in 2019. “There’s a lot in the pipeline that I think has not been announced yet.”
Demand for onshore facilities also saw an increase, with the report finding that 153 call centers were expanded or opened in the previous year, creating close to 50,000 jobs. The figure was down a quarter over the growth in 2017, though, when more than 66,000 jobs were created. In the U.S, it was the Southeast and Southwest regions that saw the majority of the expansion, which the report put down to “more attractive labor conditions, lower operating costs and availability of economic incentives.”
Business process outsourcing (BPO) was the biggest growth sector, drawing in more than 107,000 new jobs announced in 2018, with financial services and retail/ e-commerce completing the top three. Technology, healthcare and telecommunications were also in the top six for job creation in the industry.
The report hinted at the potential impact of artificial intelligence, but White says they are seeing a lot slower adoption rate than anticipated. He likened it to the same hype seen when home agents were first introduced. “There is a huge demand for quality customer service and AI is not going to solve that in 2018 or 2019,” he says. “
White says that the real impact is likely to be significantly further in the future than initially anticipated. “Offshore is going to be the first to get hit, because the easier calls are being routed offshore, and AI is clearly going to answer easier call types first.”
To continue its growth and avoid the potential negative impact of AI, White advises that Latin America and the Caribbean needs to “look at moving up the food chain with more shared service center activity and the handling of level 2 and level 3 call types. They are not there yet. Jamaica, for example, is mostly handling level 1 and level 2 call types.”
Nice article! Dominican Republic as well is a great destination for call center operations.