In the latest post from our ‘Location Location’ series, we look at why the Central American country of Guatemala should be on your radar when it comes to outsourcing.
By year-end 2018, the contact centre and BPO service sectors in Guatemala were worth in the region of $600 million. While that’s down on figures from 2017, Guatemala remains a prime destination for contact centre outsourcing, with much of the industry’s growth fuelled by North American-based companies.
Currently, the BPO industry there directly employs around 45,000 people. As well as being a destination from which BPOs provide outsourcing services to some of the biggest tech firms in the world, Guatemala is home to a range of major multinationals including Oracle, SAP, Sisco and Dell.
So why has Guatemala become such an appealing outsourcing destination, and what should companies expect when outsourcing there? There are a number of factors to consider.
The country’s cultural ties with the US is a significant one, according to Sebastián Bulanti, Director, Marketing, Facilities & Business Development at TELUS International Central America. “We have a very strong affinity with American culture and that makes Guatemala an ideal location for a company that wants to avoid steep learning curves and cultural barriers.” he says.
It’s true that many Guatemalans enjoy the same television shows, share a similar passion for sports and often have family connections in the United States – indeed, an estimated 30,000 US-based Guatemalans lose their visas and return home every year.
“There is a deep affinity with the US culture that you will not find in probably any other countries in the world,” says Juan Manuel González, an enterprise-communications industry manager for Latin America at Frost & Sullivan, in reference to Central American nations. “That compatibility can greatly affect both relationships with their clients and the delivery of customer service.”
Inevitably, cost also plays a major factor in companies choosing Guatemala. While in previous years it was more common for businesses to opt for outsourcing locations like India and the Philippines as a lower cost solution, more recently, Guatemala – and Central America more generally – has become a competitive alternative. “Central America has been improving lately with the price-to-value ratio and cost,” explains González. “The pricing that these companies can offer is usually between 25 to 40 percent below domestic US rates.”
Challenges and opportunities
While cultural affinity to the US is important, having it doesn’t necessarily guarantee the existence of widespread English fluency – a requirement for any contact centre seeking to provide support to American customers. Compared to competition in India or the Philippines, González says that English proficiency levels in Central America aren’t always as high.
However, the contact centre boom in the region — and the job opportunities it promises – has led to a rise in the number of English schools across Central America. In Guatemala, universities have started making English language classes a prerequisite for graduation, which has resulted in a high level of English proficiency among younger generations.
And let’s not forget that having Spanish as its official language adds to Guatemala’s appeal, particularly given that Hispanic people account for 17 percent of the US population.
Meanwhile, in the interest of further bolstering an industry that contributes greatly to the wider economy, local government in Guatemala has been offering its support to outsourcing. “Governments are investing time and money to bring companies to their countries and help them with subsidies,” says González. “[And] governments are training the agents before the call centre companies hire them for the launch of new opportunities.” Such support has helped elevate Guatemala’s BPO industry to that of a mature one.
While government investment in the outsourcing industry is appealing to many companies, the perception of crime in places like Guatemala can serve as a deterrent. However, Scott Figler, a senior consultant at Jones Lang LaSalle, a commercial real estate company, cautions that the media can often paint an exaggerated picture of what’s really happening in the region.
“I would advise anyone looking to make a capital investment in these countries to do their homework, and not buy in so much to the caricature that the US media often makes Latin America into,” he says. “Yes, some places are more dangerous than others, but so are many American cities. It doesn’t mean something is not worth doing.”
The greatest asset
Focusing too much on crime will also deprive companies from what may be one of Guatemala’s greatest assets: its people. One of the major draws of the country is not just how young and educated the workforce is, but their sheer enthusiasm. Not to mention the fact that Guatemala has the largest number of students in Central America.
Workers often take great pride in their jobs and treat them as career growth opportunities. That passion brings great value to the relationship between company and outsourcing partner, but also between agent and customer, translating into a higher-quality of service, employee engagement and retention.
“The Guatemalan culture is very positive,” says Bulanti. “Guatemala has previously been ranked one of the happiest countries in the world. That’s definitely true. The people are very happy and very positive.”
Doing business in Guatemala is getting easier too. According to the 2019 World Bank Doing Business Report, Guatemala is among a number of developing countries to have reduced regulatory complexity between 2017 and 2018. It achieved this by simplifying registration formalities, abolishing or reducing minimum capital requirement and by improving online procedures.
“There is potential for a lot more growth in the BPO space,” says Bulunti. “We have a good level of the English language and a good educational system here. There is definitely plenty of growth potential in the customer service and tech space here.”
Now that you have the facts, why not talk to Voxpro – powered by TELUS International about how we can help you set up operations in Guatemala. While you’re here, check out some of the amenities at our four Guatemalan sites, which includes a rooftop soccer pitch.