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Your Feet On The Street: BPO and Call Center Industry Insights

Curing the Allergic Reaction to Nearshore and Offshore Call Centers (Part 2)

In Part 1 of this article series, we looked at the challenges and common perceptions about nearshoring and offshoring call centers. Let’s continue that conversation by focusing on how to mitigate some of the concerns that bubble up when you are considering outsourced call centers that are located outside of the USA.

Nearshore and offshore price points are attractive, and cost reduction is music to every executive’s ears. However, the allure of improving your bottom line should not damage your brand. When considering vendors with international sites, common questions and concerns come up around business risk, safety and security, the right location(s), actual cost savings, cultural alignment, English proficiency, business disruption, transparency, communication and resource allocation.

These are all valid concerns, and there are many other things that should be vetted carefully. Therefore, when evaluating a global call center vendor, your due diligence should include everything that you would look for in a U.S. vendor, along with some very important nearshore- and offshore-specific considerations including the following:

Your Company’s Level of Cultural Maturity

Early adopters to nearshore and offshore outsourcing are acclimatized to working with global call centers. Organizations that have attained cultural and “corporate” maturity, usually have better processes in place to sustain successful vendor partnerships. If your company struggles internally to streamline processes or collaborate as a team, you might not be ready to work with a nearshore or offshore call center vendor just yet. An untimely decision into a vendor relationship could lead to disastrous outcomes.

Which Countries Should You Consider for English Needs?

This is the million-dollar question...

Philippines

Of course, there is always the Philippines, which is the current de facto offshore country for English language support. But it does take a day and a half to get there from the U.S., and so your vendor management personnel have to be prepared for long travel times and all the logistics that come with “farshore” outsourcing. If your organization wants close collaboration and a frequent on-site presence at your vendor site(s), then it makes sense only to use the Philippines if you plan to outsource enough seats there to make it worth your while, and the vendor’s.

Caribbean and Latin America

What about CALA (the Caribbean and Latin America)? Most CALA vendors are much less expensive than U.S. vendors but generally more expensive than the Philippines. There is a premium that is baked in for geographic proximity to the U.S., closer cultural affinity and better quality English. Many CALA region call centers are filled with expatriates and agents with close ties to the U.S. In one of our vendor sites alone, over 65% of the agents and management are USA expatriates. CALA locations on the upswing for English language support include El Salvador, Guatemala, Nicaragua, Colombia, Belize, Grenada, St. Lucia, Guyana and others. More mature CALA region markets include Mexico, Jamaica, Honduras, Costa Rica, Panama and the Dominican Republic.

Eastern Europe

Eastern Europe is a maturing market for English and multilingual call centers. Countries like Romania, Bulgaria, Hungary, Ukraine, Poland and others are competing for European and U.S. outsourcing contracts. Depending on the country, price points are comparable to CALA, and in some Eastern Europe markets, pricing rivals the Philippines. Due to the influx of business in recent years, the labor market in certain parts of this region is getting saturated, and over time, rising costs could become an issue.

South Africa

Emerging outsourcing markets like South Africa have made a comeback, especially now that the South African currency (Rand) has fallen, making price points as competitive as the Philippines and many CALA markets. The English language quality in South Africa is very good coupled with many other improvements related to infrastructure, telecommunications and quality of the labor force as well as government support for the BPO industry.

Asia

Korea, Japan, China, Malaysia, Vietnam and others have burgeoning BPO markets, but none have proven scalable for English language support. And what about India? Will it ever make a comeback in voice outsourcing?

Emerging or Saturated Outsourcing Global Markets?

For English language voice support, both traditional and emerging outsourcing markets are always in play.

  • Emerging markets can offer benefits to early entrant clients that are willing to reap the rewards of boldly going where no one else is. Some of our clients have us focusing on nascent call center outsourcing markets that are unsaturated and fairly new to the outsourcing industry. Why? Because these clients wanted to be first-to-market in a less saturated location and take advantage of the associated perks. For example, vendors that start call centers in new markets offer special pricing and often fund onboarding and even travel expenses for first-mover clients. And, the labor market is untapped so attrition rates are lower and there is very little competition for agents. In general, clients that use this strategy have a “pioneering” culture and want to get in early long before “me too” call centers come along and saturate the market.
  • Traditional markets have well-established call center BPO industries and a lot more vendors competing for agents. Generally, the more mature the outsourcing region, the greater chance of oversaturation which could lead to staffing challenges, higher attrition and higher costs. However, saturated markets tend to have a greater abundance of “call center ready” trained personnel. And on the flip side, smaller vendors in saturated markets can thrive by offering a more intimate work environment, better career path options, higher pay and other amenities compared to larger BPOs. Smaller BPOs can tap into the trained labor force in saturated markets, so it’s not always a bad idea to set up shop in saturated areas if your strategy is sound.

In-Country Laws Could Impact You!

Get to know the labor laws and other government-mandated social requirements that could impact you. If your nearshore or offshore vendor is U.S.-based, their standard practices in the United States might have to be tweaked for each international location in which they operate. Furthermore, the labor laws can be complicated in some countries, and “dismissing” a call center agent or any employee at any level, for that matter, might not be a routine task.

Evaluating Language Skills & Aptitude

Some argue that English aptitude and proficiency are more important than English “skills.” Focus groups and live call recordings will help you to determine whether the agents will meet your quality standards, provided that the vendor is giving you a valid representative sample and not stacking the deck with their best-sounding agents. If you want to take it a step further, consider tools like the Versant Test, which help to evaluate an agent’s written and spoken English language skills and general aptitude.

Continuous Communication with Site Leaders

Effective communication is central to the success of your nearshore/offshore venture.

  1. Ask vendors where your daily point of contact is located.
  2. If the individual is in the United States, make sure that you also have direct access to experienced site leaders at the nearshore/offshore site(s). Why? Because if you give a directive to your U.S.-based point of contact, sometimes your requirement doesn’t always trickle down to the nearshore or offshore site as you intended or with the same level of urgency. Furthermore, the onsite team is much more in tune with the local community and can better handle staffing issues and other daily blocking-and-tackling activities. From onboarding through launch and beyond, it is critical for leaders at the site level to participate and even lead in communication with clients. You can’t run the risk of anything getting lost in translation.

Starting Slow Can Help Mitigate Risk

Many of our clients start their nearshore and offshore call center journey by outsourcing less complex call types, non-voice work or “low-hanging fruit,” which allows them to dip their toes in the water to get a feel for how to create an ideal working partnership with their vendor. Not a bad way to start. Remember it’s a marathon, not a race. Starting slow is a good recipe for success as you work closely with your vendor on getting the formula just right before you plan for future growth. 

Location Safety Concerns

Safety and security are among the top reasons why companies are hesitant to outsource outside of the USA. This is understandable, and no one wants to endanger their personal safety for business or any other reasons. But suppose you “fall in love” with a vendor in the USA and their best call center is near a high-crime area. Would you avoid going there?

In our 13-year history, our clients have visited our nearshore and offshore vendors hundreds of times in over 20 countries—and all without a single safety or security incident.

I’m not suggesting that we shouldn’t heed travel warnings—we always should. And if a country is deemed unsafe to travel to, then don’t go. At the same time, let’s also try to separate perception from reality.

Information can help to alleviate travel concerns:

  1. Be sure to present your stakeholders with facts about the countries that you’re considering.
  2. Talk with other U.S.-based clients who regularly visit the proposed nearshore or offshore sites and share their insights with your fellow stakeholders.
  3. Work with the vendor to develop an ironclad site visit logistical plan that ensures safety, security and a pleasant experience.

Has the Vendor Done This Before? Due Diligence Is Critical

Not all vendors have the resources or process in place to work with a client who has never outsourced nearshore or offshore before. So it is important to verify in your due diligence of prospective vendors whether they have successfully managed a similar migration for other clients. Every vendor wants a new logo, but not all vendors have the matching resume that you are seeking. In particular, the vendor should be an expert at providing a customized roadmap that alleviates stakeholder concerns and delivers high-quality nearshore/offshore outsourcing performance for companies that have never used non-U.S. call centers.

What Is the Magic Formula?

There is no “one-size-fits-all” strategy for nearshore and offshore outsourcing. We all know companies that have “repatriated” their call center work back to the USA for various reasons. But the inverse is also true. For as many companies that bring work back to the USA, others are outsourcing more and more to lower cost nearshore and offshore vendors.

For many of our clients, their nearshore and offshore vendors outperform USA-based vendors. And the inverse is also true in this case as well—USA-based vendors outperform international sites. There is no groundbreaking formula or scientific study that helps us understand how global vendors will perform against USA-based vendors. It is different for every client and across every line of business.

There are a lot of variables that go into selecting the right location(s) and the best vendors for your outsourcing requirements. Don’t fall into the trap of choosing the lowest priced option because you will get what you pay for. For the best results, make sure that your nearshore or offshore vendor has the exact credentials that you would require in an onshore U.S.-based vendor and try to view the cost savings merely as an added bonus.

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As a call center outsourcing thought leader and president of CustomerServ, Nick Jiwa is dedicated to helping companies find, select and retain the right call center outsourcing partners. Nick’s expertise and contribution to the call center industry started in 1986 – as a call center agent when the industry was still in its infancy. An avid 80s music buff, proud father and soccer fanatic, Nick is passionate about “anything call center”, giving back to the community, mentoring and helping others win!

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