Nearshore Americas

Region’s Evolution Beats Skepticism

A few years ago, when I heard people talking about Latin America as an emerging location for call centers and outsourcing delivery operations for companies in the United States, I was extremely skeptical.

At that time, I was working for a Canadian provincial government trying to attract investment to Canada. Central and South American alternatives were rarely considered by companies considering Canada. Sure, the exchange rate between the U.S. and Canada favored the U.S. then (now, the dollars are at par), and there were major concerns about the quality and capabilities of Latin American workforces.

I believed that Latin America had great potential for Spanish-speaking contact centers, perhaps to respond to the expanding needs of the U.S. Hispanic market, but I doubted there was enough bilingual and English-language talent to meet the needs for those types of agents from the U.S.

I wasn’t aware of the advances in the educational foundations of many Latin countries, and the priority being given to English instruction in some of the schools. Nor was I aware of the development of technological infrastructures that were resulting in the availability of significant pools of technical talent to support the needs of contact centers, IT services providers, software developers, and infrastructure companies.

Now, it is becoming clearer that Latin American countries – and it is hard to generalize about the whole region – are at a level where many can support requirements for significant human capital resources in both the contact/call center and IT services sectors.

Not many Latin countries can meet requirements in both sectors, and the pools of available and qualified resources can’t approach the numbers in India, China, and the Philippines. Critical mass may not be available in any single country for some of the largest applications, but many companies are finding that reasonable levels of resources are available, even in some of the small countries. They are expanding in Latin America to meet their growing business needs in the region and also to support their U.S. and global operations.

Costa Rica Calling

These points were driven home to me by a longtime friend, Tom Rocca, who is president of SupportSeven, a 200-seat call center based in Chattanooga, TN. The company has a subsidiary, Eclipse in Action, in San Jose, Costa Rica, which has recently expanded to more than 450 seats.

Rocca is a veteran call center professional and insider. He’s a past chairman of the American Teleservices Association, a member of the Society of Consumer Affairs Professionals International’s National Board of Directors, and is currently chairman of the Executive Advisory Board for the University of Akron’s Gary L. and Karen S. Taylor Institute for Direct Marketing.

Tom’s ringing endorsement of Costa Rica forced me to recognize that the “Nearshore advantages” once ascribed to Canada alone have carried over to much of Latin America.

While SupportSeven is firmly ensconced in Costa Rica, one of the most politically and economically stable and well-educated countries in the region, much of what is developing there is going on in other countries, to various extents, such as the Dominican Republic, Guatemala, Panama, Peru, Colombia, Argentina, Uruguay, Chile, Mexico, and Brazil.

It was interesting that when I spoke with Irving Soto, Costa Rica’s Director of Investment Promotion, at a recent conference, he wasn’t aware of Eclipse in Action, which after completing its recent expansion will employ more than 650 people in two shifts. Eclipse is just one of a large number of international contact centers operating in Costa Rica. It’s not a surprise that they are not well known inside the country because the sector has grown rapidly over the past few years.

In fact, the services sector in Costa Rica has grown from 5 companies in 2000 to more than 113 in 2010. Companies that have located call centers in Costa Rica include Amazon, Hewlett-Packard, Fujitsu, and UPS. Costa Rica is also a favorite Latin American location for shared services. Third-party providers such as ICT Group, Sykes, TeleTech, and StarTek offer BPO services (primarily contact center) from Costa Rica.

Rocca, whose company focuses on financial services, technology, and telecommunications industry clients, provides both customer service and tech support from Eclipse in Action’s Costa Rica center. He’s enthused by the quality of the workforce. He noted that English language classes are required in schools for students through grade 9 and that the country has invested significantly in English and IT training.

Rocca noted that in his company’s centers, there is no need for automated language screening at the front end of calls. ”There’s no reason to ask a caller to ‘Press 1 for English or 2 for Spanish’ because our agents can switch between English and Spanish as soon as they speak to a caller,” he says.

“We do all our training in English, and having Spanish capabilities is basically a bonus to us. We generally answer most calls with English first.”

Most of his clients are willing to use agents in Central America without great concern after visiting the company’s facilities there. “We’re also seeing companies that are looking for alternatives to distant offshore locations such as India or the Philippines,” Rocca says. “One of the key reasons for them is cost. It’s not as much a concern about customer satisfaction.”

He finds that the companies prefer being served by agents who are closer to the companies’ headquarters, in a similar time zone, whose non-English language is more useful and practical for business purposes in the U.S., and who are likely to have a greater affinity for western cultures and practices.

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In other Latin American countries, the specifics may be somewhat different; some, such as Brazil, may have larger populations with a greater capacity for significant IT projects, while others, like Jamaica and Barbados, may be more ideal for smaller, English language customer service programs.

But the arguments in favor of Nearshore service extend beyond sectors and across borders. If given a reasonable opportunity to leverage a qualified workforce at a competitive cost, many companies will prefer to locate their services closer to home in locations easier to access and on the same work schedule.

In many cases, it’s common sense and better business.


Eric Hochstein is Managing Director of Highstone Associates, Inc., a Barrington, IL-based business and economic development consulting firm, focused on strategy and business development, site selection, and marketing for public and private sector organizations involved in technology and knowledge-based commerce. Between 2003-2010, Highstone Associates represented the province of Ontario for investment attraction in the US in the business services and financial services sectors, including outsourcing.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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