The nearshore industry is experiencing consistent growth, with a yearly growth rate of around 6.7% (Frost & Sullivan, 2017). As a result, many U.S. companies are considering nearshore locations as part of their outsourcing strategy for contact center or software development operations.
Nearly 80% of companies in North America are actively considering nearshore call centers (Ryan Beene at Bloomberg, 2022). When you delve into the reasons why, it becomes clear why this trend is gaining traction.
The advantages of nearshoring go beyond the obvious factors such as cultural alignment, bilingual capability, proficient English skills, similar time zones, short travel distance, and labor cost savings.
However, there are also less apparent reasons why top U.S. companies opt for nearshore locations for their business needs, concerns, and priorities. In this article, we will explore these factors.
Offshore is Not Performing as Expected
In the past, numerous U.S. companies shifted their contact center operations to offshore call centers to reduce costs. However, they soon realized this strategy did not result in the desired savings. In fact, it led to high travel expenses, customer complaints, and agents not coming up to the mark due to cultural and language barriers, hurting customer satisfaction. These warning signs prompted them to explore alternative options.
That's when many CEOs started considering nearshore call centers as their outsourcing partners because, more often than not, they outperformed offshore call centers thanks to the ability to provide proficient English or bilingual support and cultural alignment.
Additionally, nearshore call centers offer greater control thanks to their geographical proximity, as we have always emphasized when discussing outsourcing services.
U.S. Companies are Nearshoring to Have Redundancy
U.S. companies increasingly turn to nearshore in Latin America or nearby countries to ensure redundancy and minimize risk. By diversifying their locations, companies can support their in-house operations in case of any issues.
Opening another location within the U.S. or onshore solutions can be expensive, which is why nearshoring presents an attractive option for these companies. Nearshore offers a cost-effective solution with minimal upfront investment while remaining geographically close to their main business operations.
Struggling with Agent Retention Rates
Highly skilled agent retention rates in the U.S. have become a significant concern, while many Nearshore locations are known for their exceptional long-term workforce stability.
This can be attributed to the promising career growth and abundant opportunities available within the contact center industry.
Additionally, U.S. companies find it more cost-efficient to incentivize their Nearshore agents due to the cost advantage in products and services in these countries compared to the U.S.
It is no wonder that decision-makers are increasingly drawn to the opportunity to build a highly skilled, long-term call center team in Latin American countries.
Strong Government Support and Favorable Economic Situation
Thanks to the fast pace the Nearshore Industry is growing, governments are supporting the sector by providing a favorable environment for Foreign investment and, incentivizing U.S. companies to invest in their countries, making it highly beneficial for all parties involved.
For example, Mexico has 14 Free Trade Agreements, including the T-MEC with the United States and Canada. It is among the ten countries that receive the most Foreign Direct Investment, which is why the government invests in infrastructure, technology, and workforce preparation.
Nearshore countries also focus attention on the educational sector to provide a talented workforce. There are numerous English and customer service-related classes and courses available, along with part-time high school and college programs, for working individuals who wish to continue their education.
Moreover, the economic factor is also favorable for companies looking to Nearshore their call center operations due to the stable exchange rate that greatly benefits U.S. firms.
Other Blue-Chip Companies are Nearshoring
Big companies are embracing and expanding nearshore operations, including Tesla, Honeywell, Mattel, and Unilever. These industry giants set the tone for market trends and serve as role models for other large and mid-size companies. They have decided to invest in nearshore operations because of their experience and capability to invest in new opportunities without huge risks.
As we witness the success of this strategy for them, it becomes evident that it can work for you too. To remain competitive, it is crucial for many businesses to follow this trend and explore nearshoring opportunities.
Those are some of the reasons why top U.S. companies are increasingly opting for Nearshore. They recognize the importance of a reliable outsourcing strategy that can offer competitive advantages to their operations while maintaining service quality and management control. It's evident that more and more companies are shifting their offshore operations to nearshore as it becomes more competitive for their changing needs.
At Call Center Services International, we specialize in Nearshore Contact Center solutions and have over 15 years of experience, during which we have helped numerous clients achieve success. contact us to learn more about this opportunity and explore our range of call center solutions.
Sources:
Frost & Sullivan Nearshore is All Grown Up Hot BPO Delivery Destinations
Frost & Sullivan Analysis of the Latin American Contact Center Outsourcing Services Market, Forecast to 2022
Ryan Beene at Bloomberg U.S. Factory Boom Heats Up as CEOs Yank Production Out of China