From an estimated 33,500 today, call center agent positions in Mexico – both offshore and domestically outsourced – are expected to rise to nearly 80,000 by 2010, equating to 18% compounded annual growth through this period. Principal growth drivers include an ever-growing domestic market, as well as demand from the US for multi-lingual, commercially sophisticated agents.
Mexico is one of the most mature offshore locations in the contact center outsourcing world, yet is still posting high levels of annual growth. This has largely to do with the high levels of demand coming from US-based firms that wish to service their Hispanic-American customers. In addition, Mexico’s move to market liberalization has increased that country’s consumer class, thereby necessitating more agents to serve domestic demand.
Recent population trends, indicating a huge increase in the Hispanic population in the US, have not been ignored by American companies. Nor has the rise in household incomes among these Spanish-speakers. US 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.
The growth of other players in Latin America will be a competitive threat to Mexico for US Spanish-speaking work in the future. Argentina and Chile, among others, are aggressively targeting the North American market, as are smaller countries including Costa Rica, Dominican Republic and Panama.
Nevertheless, in many facets, Mexico fits the bill for US investors. Not only does the huge pool of Spanish-speaking talent benefit US companies looking for these language skills to accommodate US Latino customers, but the location cannot be beaten from the perspective of distance. 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.
Lower relative costs in Mexico are another important element in Mexico’s positioning. In both labor and commercial property, Mexico comes in significantly less expensive than overheads in the US, or even Canada. Investors continue to realize that if they can source customer care with all these positive attributes from a location in close proximity, they will do so with enthusiasm.
US companies serious about Mexico need to realize it will be prudent to migrate their higher-end Spanish-speaking customer service work to this location over the long-term. This is because new locations in Latin America are likely to be able to compete for mass-market business at a lower cost. Players already in the Mexican market also need to examine the possibility of offering services to domestic customers, a segment Datamonitor forecasts will grow rapidly.
