The Hispanic market is one of the fastest and strongest-growing in the US, and its momentum is expected to continue over the coming decades. Nevertheless,the same can’t be said about one of its defining characteristics: speaking Spanish.
As of 2020, there were over 62 million Hispanics living in the US, with 41 million –or 13% of the total US population– identified as Spanish speakers, according to Census Bureau data. The Hispanic population has grown 23% over the past decade, more than five times the pace of other population groups (4.3%) over the same period, and it is expected to reach 111 million by 2060.
Nielsen has identified Hispanics as the largest minority market with buying power, contributing US$1.9 trillion to the US economy in 2020. A recent report by the Latino Donor Collaborative stated that the population’s contribution to US GDP would make US-residing Latinos the fifth largest economy worldwide.
The U.S. Hispanic population reached 62.5 million in 2021, up from 50.5 million in 2010. The 19% increase in the Hispanic population was faster than the nation’s 7% growth rate, but slower than the 23% increase in the Asian population. https://t.co/t57mwWuaxX pic.twitter.com/vjDpflhvTm
— Pew Research Center (@pewresearch) September 23, 2022
In other words: the Hispanic population is growing not only in sheer volume, but also in potential profitability for all sorts of brands. Market experts recognize the relevance of servicing this segment of the US population, and doing it in their language of preference.
Few industries are more aware of the relevance of the Spanish-speaking market in the US than customer support. Industry experts estimate that between 10% and 15% of the total client base of specific businesses or brands speaks Spanish and prefers to be attended by CX agents in their language. The biggest segments of this market concentrate in California and Texas, two of the strongest state economies in the country.
CX services for this population are provided almost entirely from Nearshore hubs like Colombia, El Salvador, Costa Rica, Nicaragua and, to a growing extent, Mexico, where CX vendors can find not only native Spanish speakers, but a wide labor pool of bilinguals.
Yes! Let's say it louder for those in the back.
It should be common knowledge. Our GDP reports are to make sure it is. #LatinoGDPReport
— LDC Latino (@LDCLatino) October 26, 2022
According to an industry source –who preferred to remain anonymous–, onshore CX operations for the Spanish-speaking market in the US are “very rare”, mostly limited to highly regulated industries, such as health services.
“There’s no reason to have customer support operations for Spanish speakers in the US when you can be more competitive sourcing from other labor pools,” the source stated.
Although the Hispanic market remains profitable for Nearshore providers of customer service, and the Hispanic population overall is expected to grow even larger within the US, hopes for the Spanish-speaking portion of the population might not be as high.
Less and Less Español
The percentage of overall Latinos residing in the US –5 years and older– that speak Spanish at home has been declining over the past two decades, according to the latest data gathered by Pew Research.
The portion was around 75% in the early 2000s. As of 2021, the number fell to 68%. English proficiency, on the other hand, rose from around 60% to 72% during the same period.
For US-born Latinos, English-proficiency has seen a sharp increase over the past 20 years and now stands above 90%, while Spanish use at home has been declining at a similar pace down to 55%. Among foreign-born Latinos, Spanish-use at home has remained stable in the 93% range, and English proficiency has climbed slowly from the lower 30s towards 37%.
This phenomenon can be explained by a shift in the dynamics of immigration and Latino births in the United States. Two decades ago, the majority of the Latino population in the country were first generation immigrants. Now, US-born Latinos surpass immigrants by far. Throughout the 2010s, around 1 million Hispanic babies were born in the country each year, while annual immigrant arrivals only reached 350,000.
“The predominance of new births over immigration as a source of Hispanic population growth in the 21st century is a reversal of historical trends […] In 2020 and 2021, virtually all Hispanic population growth has come from births,” Pew points out.
“It will keep growing [the Spanish-speaking market for CX], no doubt, but it will become more sophisticated”
Pew expects immigration from Latin America to pick up once again with the removal of pandemic-related restrictions. In fact, numbers have been on the rise under the Biden administration, which removed several of the restrictions imposed by the Trump White House for migrants and asylum seekers.
Nevertheless, it has yet to be seen whether the volume of migrants coming from Latin America into the US will reverse the trend for Spanish-use in the country to where it was over two decades ago.
What To Expect
Even as the number of Spanish-speaking households in the US keeps winding down, CX vendors that attend that segment of the market show little signs of concern.
Sources consulted by NSAM expect Spanish-speaking households to remain a staple of the US market, even when English becomes the language of preference for second generation Hispanics residing in the country.
Hope in the industry is that immigration will keep feeding that segment of the market. Worst case scenario: the number of Spanish speaking households in the US will plateau without disappearing entirely.
The outlook within the industry points to a diversification and sophistication of the Spanish-speaking market.
“It will keep growing [the Spanish-speaking market for CX], no doubt, but it will become more sophisticated,” stated an industry source. “It will keep growing because immigration rates keep climbing, but those will reach a ceiling due to subsequent generations being more proficient English speakers and making more use of it than Spanish.”
In other words: change is happening, and customer support providers will have to adapt to the new forms that arise.