Beyond Borders: The Art of Selecting the Best Countries for Outsourcing

Mar 12, 2024 Jana Lewis, VP of Sales

In 2023, the worldwide business process outsourcing industry (BPO) was estimated at $731 billion, up from $246 billion only two years earlier. According to Deloitte, 52% of companies overall make outsourcing part of their business strategy. And a report by Clutch reports that 90% of small enterprises are planning to outsource their customer service needs, an increase of 80% from the previous year.

Historically, outsourcing has been a proven strategy for lowering costs, reducing market volatility risks, and leveraging world-class technology and processes. More recently however, companies are partnering with BPOs like ACT to help them with their digital transformation and call center automation initiatives, to better coordinate cross-channel customer experiences, to better integrate systems, improve cross-silo data visibility, and to help prevent fraud and cybercrime. 

Outsourcing also allows companies to tap into talent pools that would otherwise be inaccessible. When doing so, organizations have the choice of selecting where their teams are located, generally categorized as Onshore, Nearshore, or Offshore. While locations such as India, the Philippines and Mexico have historically been popular, market oversaturation is causing companies to look to greener pastures such as Jamaica, Guatemala, and South Africa.

This blog explores key considerations in this decision-making process, providing insights into factors ranging from cost efficiency to cultural compatibility.

Key Considerations for Selecting the Best Countries for Outsourcing:

Determining which destination is best for you depends on several factors.  Labor supply, skill set, global economic and geopolitical forces all influence the attractiveness of contact center locations. Below is a list of considerations to weigh when determining which location(s) are best suited for your needs:

  1. Cost Arbitrage: Each country offers differing labor costs and is the basis of the ‘labor arbitrage’ that made outsourcing so popular in the first place. For example, across all industries and employers, the average call center agent hourly rate in the United States is $18 – 35 / hour. You can reduce labor costs by outsourcing Offshore (50-70%) and Nearshore (30-50%), depending on industry and type of role. 
  2. Skill Availability and Expertise: History has proven that different countries offer different skill sets and expertise. For example, given the culture of the Philippines, it has been an excellent location for customer care whereas India has historically been the location of choice for technical support services. More recently, South Africa is becoming the location of choice for highly skilled workers capable of handling highly complex situations but at an affordable price.  Other elements include educational affordability, cultural attitudes towards education, the education levels of the available workforce, etc. It is not uncommon for contact center agents outside the United States to have college and even master’s degrees. 
  3. Cultural Compatibility or Affinity: Given the growing complexity of customer interactions, live agents need to be able to relate to your customers. If your customers are in the United States but you select a country where they know little about the US or have little cultural affinity, it’s not a good match.  For example, if you are outsourcing the technical support of your smartphones and you select a country where only 24% of the population own a smartphone, you will have a difficult time finding sufficient numbers of qualified candidates. Another factor relates to the time zone differences, although most BPO destinations like India and the Philippines are now accustomed to working US hours.
  4. Language Proficiency: While English is spoken nearly everywhere, it is important to find agents with near-native proficiency. During the 1990’s, there was a backlash from US customers who could not understand the accent of tech support agents located offshore. Another language factor relates to industry terms needed to support your customers. For example, if you need Spanish-speaking agents to support users of medical devices, additional training will be needed to ensure agents know the terminology unique to your business. 
  5. Political and Economic Stability: The political and economic stability of the destination country also plays an important role in your decision. If the region in the country under consideration is prone to frequent labor strikes, riots, or unreliable transportation, it could negatively affect the ability of your agents to get to work. 
  6. Infrastructure and Technology: The country’s reliability of their phone and internet infrastructure is another important consideration. If the power grid is prone to going down frequently, does your BPO have backup generators to ensure your contact center remains online during storms or labor strikes? Do they have the bandwidth to support your applications and the real-time data transfer needs? And is the government taking rigorous action to boost their infrastructure?
  7. Data Security and Privacy: Following the enactment of GDPR in the European Union, other governments have enacted similar legislation around the world. This will impact what data can be collected, how and where it needs to be stored, and if that data can be shared across country borders. These laws come with steep financial penalties for noncompliance.

About ACT (Advanced Call Center Technologies)

ACT was founded 27 years ago on a winning formula – that the best solutions integrate Employee Experience (EX) + Customer Experience (CX) + User Experience (UX) + Digital Experience (DX) + Multi-experience (MX) for an outstanding Total Experience (TX) overall. We call it the Total Experience Formula™.

Today, many of the world’s leading brands and Fortune 50 trust ACT to be an extension of their business to unlock their ability to respond quickly to rapidly changing competitive, business and compliance environments, to anticipate and scale for future needs, to outmaneuver their competition, to lower operating costs, to improve efficiencies, to drive revenue and increase customer engagement. 

When clients first come to us, we consistently find it to be an opportunity to transform their design and outcomes. ACT has invested significantly in mapping the end-to-end employee experience to ensure our employees are engaged, empowered to be successful, and highly motivated to deliver the best outcomes for our clients.

ACT offers the operational expertise, technologies and best practices that you expect from a world-class BPO, combined with the innovative solutions, flexibility and individual attention that you can only get from a 100% employee-owned company.

Learn more at our website: https://www.acttoday.com/about-act/

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