Latin America, The Fastest Growing Outsourcing Destination.

Feb 12, 2015
2 min read

As the global market for offshoring services continues to expand, several new emerging destinations are now competing with the more mature Asian offshore destinations. Latin America outsourcing is an emerging trend and the region has emerged as one with great promise for the global services industry, primarily due to the growing US demand for nearshore services.

The Latin America outsourcing industry has attracted many leading global companies including , General Motors, Intel, Genpact, American Express, Wipro, Citibank and more to invest in call centers, offshore delivery centers, BPOs and shared service centers (SSC). Latin American countries that would previously never have been considered, are now proving to be tempting outsourcing destinations for worldwide buyers.

Main reasons for Outsourcing to Latin America

"When clients look at Latin America they look for Spanish language skills, geographical proximity, and also cost effectiveness. For example, if you look at India which is the most developed sector in outsourcing or shared services, there is a lot of wage inflation going on, and inflation is on the rise every year. In that comparison, Latin America is more stable. If you look at long term in that case, it is going to be probably same cost for some years and these are the kind of things companies are looking at. So, probably if you have the same cost, if you have the same talent and it takes you the same to go from Europe to India or from Europe to go to Latin America, then Latin America is also a good option."

Reasons for Latin America outsourcing:

Cost-effective pricing structure: Latin America has not caught up with inflation with regard to total cost, and so promotes a very strong value proposition of having the ability to provide cost-effective services.
Spanish language skills: When it comes to Spanish and Portuguese language skills, Latin America is probably the only region in the world that offers the combination of language skills at scale plus cost savings. This works in favor of US markets due to the huge Spanish population present in the US.
Similar time zone: Latin America is very well positioned and is more or less in the same time zone as US and Europe. This helps in easy implementation of 'agile development' by buyers, if needed.
Domestic opportunities: Global companies gain several regional and business opportunities, especially in large countries like Brazil and Argentina where the domestic market is also fairly large (nearly 60-70%).