Outsourced Contact Centers in Mexico: A Closer Look
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1 Outsourced Contact Centers in Mexico: A Closer Look White Paper August
2 Step into this contact center and you are surrounded by sounds you would expect: the clicking of keyboards and the low hum of conversations conducted in perfect American English. But listen a little closer, and you ll hear many of the agents speaking fluent, neutral-accented Spanish. You will notice how they switch back and forth between the two languages without missing a beat. You are in a unique place: a facility in Mexico, just south of the U.S. border an outsourced contact center where customer service agents navigate effortlessly across languages and cultures. With 38 million Spanish-speakers in the United States, 1 organizations understand the benefits of bilingual customer service. More and more, they are outsourcing contact center functions to specialty providers along the U.S.-Mexico border. This paper focuses on the dynamics behind the growth of the outsourced contact center market in Mexico. A number of factors are making Mexico the go-to destination for U.S. companies and other organizations seeking cost-saving solutions that deliver outstanding customer care. They include Mexico s businessfriendly geographic location, a young bilingual workforce, and the Mexican government s high-dollar initiatives to welcome international business. Contact center jobs, particularly those requiring high problem-solving skills and technical knowledge, are returning to the U.S. and nearshore Mexico from India and the Philippines. Organizations recognize the benefits of having agents familiar with U.S. culture and the booming U.S. Hispanic consumer market, which controls $1.2 trillion of spending power a number expected to grow to $1.6 trillion by Mexico s outsourced contact centers are home to 85,000 workstations, according to industry consultants Frost and Sullivan. That number is predicted to exceed 110,000 by DATAMARK, Inc. 1
3 Location and Workforce Mexico s geographic proximity to the U.S. holds a major advantage over outsourced contact center destinations such as India or the Philippines. Time zones are similar and travel times are reasonable no risk of jet lag here. And there is very little culture shock or language adaptation to worry about, particularly in border cities, which offer great convenience for the business traveler. For example, a customer service executive can fly in to El Paso, Texas and cross the border by car. They can visit an outsourced contact center facility in Juarez, Mexico and return to El Paso for a flight home within the same day. The workforce in the U.S.-Mexico borderland is unique, and especially suited for U.S. customer support. In Mexican border cities, it is easy to find contact center agents who have lived, worked and received education in the U.S. They speak fluent, unaccented English and can put customers at ease with their knowledge of U.S. culture, customs and figures of speech. Many agents can effortlessly switch from both spoken and written Spanish and English as necessary for phone calls, s, web chats and other communication channels. The Mexican workforce also happens to be relatively young and talented. Here are some workforce highlights: 3 Mexico s population of 116 million is expected to double in size over the next 30 years. 60 percent of the population is under 35; only 6.5 percent is over 65. Working-age people make up the biggest part of the total population. Mexican universities produce 111,000 engineering and technical students each year. Mexico leads the Latin America region in the AT Kearney Global Services Location Index due to favorable wages, an increased demand for nearshoring, and a talented workforce. 4 Outsourced Contact Centers in Mexico, 2013: Percent of Revenue by Services Provided Source: Contact Center Outsourcing Services Market in Mexico 2013, Frost & Sullivan DATAMARK, Inc. 2
4 Infrastructure to Support Multichannel Communication Mexico has a modern telecommunications infrastructure, and about a third of the population has access to the Internet via mostly broadband connections. 5 Infrastructure for supporting outsourced contact centers with multichannel (voice, , web chat etc.) communications is particularly robust in the Mexican border states, which are home to about 60 percent of the 5,000 maquila manufacturing and processing plants operating in Mexico. 6 The Mexican government recently announced a program to invest 7.7 trillion pesos ($587 billion dollars) in the country s highways, railways airports, schools, electricity and water systems and other infrastructure over the next six years. 7 The telecommunications sector will receive at least 700 billion pesos ($53 billion dollars) to fund two new communications satellites, two digital TV networks and to establish broadband access to 80,000 public spaces. 8 The Mexican government s strategy to grow the economy includes reforms of the energy sector to allow private investment and a plan to increase competition in the telecommunications industry DATAMARK, Inc. 3
5 Welcoming International Business and Foreign Investment A number of other initiatives reflect the Mexican government s efforts to welcome new outsourced contact centers, business process outsourcing (BPO) facilities and other business activities and investments from outside the country. Mexico has established free trade agreements with 44 countries, attracting a huge manufacturing base, particularly making a splash in the automotive industry. 9 In regard to security, Mexico has been making significant strides combating drug cartel violence and other illegal activity. Despite the troubling headlines about cartel violence in past years, economic activity in Mexico grew at a steady pace (4.3 percent average annual growth in GDP between 2010 and 2012). To protect economic activity in from criminal groups and corruption Mexico recently established a 5,000- member Gendarmerie police force. A division of the federal police, the force will guard activities in oil and gas production, mining, agriculture and other business sectors. 10 Although the GDP growth rate fell to 1.1 percent in 2013, the World Bank predicts growth will rebound to 3 to 4 percent over the next few years as the U.S. economy improves and Mexico s infrastructure investments get underway DATAMARK, Inc. 4
6 Conclusion For organizations looking to improve customer relationships by leveraging bilingual agents to serve U.S. customers and the $1.2 trillion U.S. Hispanic consumer market, Mexico stands apart as a destination for outsourced contact center services. Benefits include lower costs and a talented pool of workers with a deep understanding of U.S. culture, and a robust telecommunications infrastructure capable of supporting multichannel customer contact. Organizations interested in exploring outsourced contact center opportunities in Mexico should do so with the assistance of experienced local partners who can pave the way for success. About DATAMARK For more than 20 years, DATAMARK, Inc. has provided bilingual (English/Spanish) multichannel contact center services, mailroom management, data entry, document processing, business process improvement consulting and other outsourcing services for Fortune 500 companies across all industry sectors. If you have questions or need assistance in developing your organization s case for outsourcing and business process improvement, DATAMARK s business process outsourcing specialists are available for a complimentary initial consultation. Contact us at: Toll-free: Info: info@datamark.net Notes: 1. Pew Research Center analysis of the 2011 American Community Survey. 2. The Multicultural Economy 2013, Selig Center for Economic Growth, Terry College of Business at University of Georgia Reasons to Near-Source Your Business to Mexico, Forbes, August 18, AT Kearny Global Services Location Index, 5. Mexico is Open for Business, U.S. Dept. of Commerce International Trade Administration. 6. Gridlines: A new Mexican mix welcomes infrastructure investors, PWC, Winter Mexico raises infrastructure spending target, Reuters, April 28, Mexico sees 4 trillion pesos in infrastructure spending through 2018, Reuters, July 15, America s Car Capital Will Soon be... Mexico, Forbes. 10. Mexico Launches Special Police Force to Guard Economic Activity, Reuters. 11. Mexico Overview, World Bank, DATAMARK, Inc. 5
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