For nearshore providers, many factors go into country selection, with labor availability and quality being among the most critical. Both these factors are present in Honduras, which has a population of about 9.3 million, and which is well-positioned to staff BPO operations big and small.
“Honduras has three million people between the ages of 15 and 35,” says Marcelo Larach, executive director of Century Business Square, in San Pedro Sula. “Most of this labor is in our two main cities, Tegucigalpa and San Pedro Sula. Between them, we have over 400 bilingual schools.”
As a country, Honduras has committed to developing the human capital necessary for a strong BPO sector, given that the industry offers access to reliable employment for young and bilingual citizens. All of this occurs in a country where the birth rate is above replacement, with high labor availability and low wage inflation.
“The average monthly salary in Honduras for a Tier 1 bilingual agent is only $450,” says Larach. “These are agents who have often spent time in the US, and who speak English well, with a clear accent.”
The total labor pool in the Central American country is 3.4 million, with every year bringing an influx of new talent. On average, in Honduras, about 13,000 people a year graduate with a bachelor’s degree, with another 2,500 graduating with engineering degrees. Honduras is a young, talented labor pool that knows the importance of learning English.
“Honduras has the largest number of bilingual schools in the Central America region,” says Larach. “As well, on a per capita basis, the city of San Pedro Sula, where we are located, has many more schools than Mexico City.”
After Tegucigalpa, San Pedro Sula is the second-largest urban area in Honduras. The city has benefitted from the broader, long term strategy on the part of the national government to encourage direct foreign investment.
“With the creation of the Industrial Free Zones system in 1987, Honduras became attractive to many multinational companies,” says Armando Calidonio, the Mayor of San Pedro Sula. “These companies placed themselves in the so-called Industrial Processing Zones (ZIP) and Free Zones (ZL), fine-tuning their labor skills.”
The BPO industry in Honduras has benefitted from this strategy, which has put the whole country on a more competitive footing. According to the Global Competitiveness Report for 2018, Honduras has the highest increase in competitiveness in the region, outperforming all of its neighbors – including Mexico.
“If you make a cost and availability comparison between Honduras and other nearshore countries, you’ll see that we’re the most competitive country,” says Larach. “Labor compensation in Honduras is one of the lowest in the region, as are our energy costs, and the telecom infrastructure is excellent.”
On an annual basis, the country graduates over 10,000 bilingual students. Given the influence of the US broadcast industry, which has a strong presence in the country, many graduates are comfortable with idiomatic speech and articulate English with a neutral US accent.
Case for Sustainability
“We anticipate that the English-speaking labor supply will stay strong,” says Larach. “There is an ongoing commitment on the part of the government and the private sector to support the BPO sector.”
This commitment includes a government plan to have 250,000 people studying English as a second language within the next three years. Clearly, there is support for a healthy labor funnel that’s more than adequate to address demand, without putting any upward pressure on wages.
“At present, there are over 20 BPO operations in Honduras, with about 20,000 people deployed in the industry,” says Larach. “Given that 78.7% of the population is of working age, and that Honduras is a young country – the average age is only 23 – the industry can rely on a solid labor base. That’s a critical factor for any BPO operation.”
As a Nearshore location, a significant part of Honduras’s competitiveness also derives from the time zone alignment with clients in the US. Moreover, flights to Miami and Houston – among other destinations – take only two or three hours. Other significant differentiators include government policy, economics, and infrastructure.
“There are three submarine cables that connect Honduras to the rest of the world, providing a solid backbone that gives redundancy to the call center industry,” says Larach. “We’ve done our research into the industry and other countries. It was clear that Honduras – and specifically San Pedro Sula – was the place to build a state-of-the-art facility for BPO.