U.S. businesses are beginning to look to Mexico and other Central American areas for customer service agents as the domestic Hispanic population rises.
Posted Apr 13, 2006
Mexico will gain importance as an outsourcing location to U.S. businesses thanks to a growing United States Hispanic population and a rise in household incomes among Hispanics. Call center agent positions within Mexico are expected to rise from an estimated 33,500 to nearly 80,000 by 2010, representing an 18 percent increase year over year, according to the Datamonitor report "Mexico: A solution for the U.S. Hispanic Market?"
Driving this growth will be an increasing domestic market in Mexico, as well as demand from the U.S. for multilingual, commercially sophisticated agents, according to Peter Ryan, outsourcing and offshoring analyst at Datamonitor. "Mexico is one of the most mature offshore locations in the contact center outsourcing world, yet it is still posting high levels of annual growth," Ryan says. "There is a lot of demand coming from U.S. firms that wish to service their Hispanic-American customers." Ryan also says that Mexico's recent move toward market liberalization has increased the country's consumer class, thereby necessitating more agents to serve domestic demand.
An exploding Hispanic population in the U.S., combined with Hispanic Americans making more money, has not gone unnoticed by American businesses. "U.S. firms understand they cannot afford to ignore this market segment and are determined to offer customer care services in their maternal tongue if at all possible," Ryan says. Mexico also presents a nearshoring option, as some U.S. businesses are looking to avoid the transatlantic trek and horrific time differences associated with outsourcing to India or Asia. This same reason also gives Mexico a leg up on its South American competition.
The report alludes to U.S. businesses looking toward other Spanish-speaking markets, such as Argentina and Chile, as well as smaller countries, including Costa Rica, the Dominican Republic, and Panama. "You cannot beat the location from the perspective of distance," Ryan says. "While locations in South America can be up to 15 hours travel time, accessing major centers in Mexico can be done in less than half the time."
Ryan says lower operating costs are another important element in Mexico's positioning. Both labor and commercial property in Mexico is significantly less expensive than overheads in the U.S. or Canada, according to the report.
Ryan says U.S. companies that are serious about Mexico must realize it will be in their best interest to migrate their higher-end Spanish-speaking customer service work to Mexico over the long term. This is due to new locations in Latin America likely being able to compete for mass-market business at lower costs. As for U.S. companies already invested in Mexico, according to Ryan, they must examine the possibility of offering services to domestic customers, a segment that Datamonitor forecasts will grow rapidly.
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