There is no disputing that Colombia ranks as one of the best performing Latin American countries for Nearshore service delivery. That fact has been made extremely clear over the last five years as tens of thousands of Colombian professionals have been hired to support a growing roster of global and local companies offering software and digital innovation, bilingual customer service and solutions within the ever-expanding realm of intelligent automation.
Colombia sets itself apart from many members of Nearshore’s top tier – countries like Costa Rica, Peru, and Uruguay – by offering a whole menu of metropolitan areas to choose from. Concerned about saturation risk in Bogota or Medellin, then try the less-traveled path to Bucaramanga or Cali. Looking for a mid-range option, consider the ‘coffee axis’ region featuring cities like Pereira and Manizales.
If those options are not the perfect fit, then it may be time to take a more ambitious step into arguably the most promising and also the most uneven BPO territory in Colombia today – sitting closer to the United States than any other part of the country, and possessing within its borders a proven case for Nearshore reliability and also a generous portion of rough, untested potential. This, of course, is the “Colombian Caribbean” region, comprised primarily of the departments of Bolivar, Magdalena, and Atlantico, and featuring the primary cities of Barranquilla, Cartagena, and Santa Marta. Those cities and their associated suburban areas comprise a population pool of 4.5 million residents, not counting close to another million living in the interior of Bolivar.
Barranquilla has emerged as the superstar of the region, boasting the highest concentration of English speakers in the country and attracting over 28 domestic and global BPO operators that support close to 10,000 jobs, translating to about 5% of the total BPO worker population in Colombia, according to ProBarranquilla. The city takes English development very seriously with the local government backing a broad “Barranquilla Bilingual” initiative which aims to accelerate English proficiency across all age groups. Clearly Barranquilla is making certain it retains the title of Colombia’s English-speaking front-runner.
Cartagena and Santa Marta both sit at the other end of the spectrum, having seen little serious investment in Nearshore operations and little to no energy put behind strategies to compel BPO operators to examine those locations. That situation, though, is likely to change in the near term. In addition, there has been a “robust, supportive entrepreneurship community” working aggressively to put Cartagena’s start-ups on the map.
For Juan Carlos Hincapie, Teleperformance’s CEO for IberoLatam, recognition of the viability of the Colombian Caribbean is “just a matter of time.” He is confident that the levels of English in Cartagena are adequate to support BPOs. TP, in fact, has begun a work-at-home testing process comprised of about 50 agents around Cartagena to evaluate skillsets.
“I think it will be a no-brainer. I see the Colombian Caribbean, with Barranquilla, Santa Marta, and Cartagena as a very good possibility to develop our business. And yes, it will happen in time,” he said.
At Nearshore Americas, we have identified four reasons why we see strong upside for the entire Colombian Caribbean. Here they are, in no particular order:
For the longest time, two of the three pillars supporting the argument for Nearshore were getting the lion’s share of attention, that being cultural compatibility and time zone alignment. The third pillar – proximity – has always been there and was always valued but never as much as it is now, in the era of COVID cautiousness. Proximity’s benefit, of course, is that when one must conduct face-to-face business, nearer is better than farther. Decision-makers will opt for shorter flights as opposed to long hauls, and the efficiency of less time traveling results in less time being exposed to health risks. The Colombian Caribbean is a factor in such considerations because it is simply faster to get to from major hubs like Miami or New York than it would be to travel to Medellin or Bogota. In very rough terms, with all things being equal, travelers will shave close to an hour of travel time by arriving in Cartagena or Barranquilla over the larger cities. The fact that Cartagena is a well-established international tourist destination means more flight options, allowing for more flexibility for business travelers.
Outcome: Greater efficiency in transit and travel, equating to a potentially smoother framework for operational oversight.
The cost of leasing office space for BPOs in Barranquilla is – on average – less expensive than the costs providers will incur in Bogota, Medellin or Cali, according to 2019 data compiled by ProBarranquilla. The cost of BPO labor in Barranquilla, across five job titles, is generally less expensive than Medellin and Bogota, while similarly priced to Cali. Investment agencies did not supply specific data for Cartagena on these points. In some of the pitch-deck presentations we reviewed, comparisons for BPO investment typically excluded Cartagena, indicating that up to this point, most of the promotional love in the Caribbean region has been lavished on Barranquilla. BPO vendor interest in Cartagena and Santa Marta appears to be catching ProColombia a bit off-guard as the vast amount of attention goes to the more marquee destinations. Again, this may well change in the near-term as awareness increases and more probing questions are asked that, for many, will seek to validate an expectation that Cartagena’s costs are lower than most other options in Colombia.
Outcome: BPO organizations will likely need to do more independent analysis in the Bolivar department (where Cartagena is situated) compared to other locations in Colombia, but the payoff may well be richer in the long run.
3. Lower Site Concentration
The trio of Medellin, Bogota, and Cali account for over 40% of the call center site locations operating today in Colombia and employing close to 70% of the BPO workforce, according to ProColombia. Meanwhile, just 11% of the sites are located in Barranquilla and Cartagena. When opting to open new BPO delivery centers in Colombia, Bogota has stood up as the longstanding ‘safe bet.’ More than 70% of the country’s bilingual professionals live in Bogota, and the city stands heads and shoulders above the others in terms of volume of college graduates in popular majors like economics, accounting, and technology, according to ProColombia. Many of the more highly educated professionals in Bogota, not surprisingly, have a host of employment possibilities with many global and Colombia-based corporations. Meanwhile, the proliferation of BPOs in greater Bogota creates competition for those workers who are bilingual and have little to no college experience, and thus lower salary expectations. The volume of those professionals is large, but so is the competition for hires.
Outcome: Given current conditions, saturation appears to be a far-off concern for the Colombian Caribbean – compared to the more mature BPO locations in the interior.
4. An Extroverted Culture
There is little doubt that Nearshore locations that exhibit cultural openness, friendliness, and upbeat attitudes are more apt to be long-term winners for Nearshore clients and operators. (Montego Bay, San Pedro Sula, and San Jose, are strong cases in point.) The embedded touristic warmth of Cartagena could provide the raw material to nurture professionals in global services fields. Barranquilla already markets itself with similar tones, recognizing that many clients might prefer a refreshing alternative to the big-city chill of locations like Bogota. One of the more sought-after data points currently is the number of tourism industry professionals living in Cartagena and Santa Marta who would be well suited to transition to BPO. Again, getting accurate answers requires some legwork. One cautionary tale: Similar sounding reasoning was used in an attempt to cultivate a BPO hub in the far-flung Caribbean island of San Andres back in 2011. Transcom failed in its attempt to create a sustainable center in that location, which, to be honest, was a challenge to begin with given San Andres’s small (100,000) population.
Outcome: Capitalizing on cultural warmth is a gift that can keep on giving for newly arriving operators, as long as appropriate amounts of leadership, training, and investment are applied and re-applied over time.