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Why Leading Brands are Choosing Nearshore Outsourcing

Unsure about outsourcing your CX? Nearshoring might be the answer to common offshore challenges.

The choice to leverage outsourced teams for your CX operation comes with an important geographic decision: where do you want these teams to be located? This decision can have an enormous impact on your CX program as you seek to deliver performance and achieve scale.

As you decide your outsourcing strategy, it’s essential to understand the difference between your delivery options:

  • Onshore: Onshore outsourcing leverages contact centers or at-home agents located in your home country, but can be up to 3x more expensive than nearshoring or offshoring and have limitations when it comes to specialized skills.
  • Nearshore: Nearshore outsourcing is the middle ground between onshore and offshore programs -- it provides staffing in countries neighboring your brand’s home country, and has similar benefits of onshore programs, without the same costs. 
  • Offshore: Offshore programs provide support from overseas, with countries like India, China, Malaysia and the Philippines being some of the most popular for offshore CX outsourcing. Costs are lowest here, and the labor pool, including those with specialized skills, is much greater due to the established market in these areas.

Choosing the right outsourcer — and strategy —  is essential in ensuring you achieve your CX goals and bolster your brand’s accelerating growth. While offshore outsourcing has become the dominant model for outsourcing, due to low labor costs and access to niche skills, there are unique challenges that come with this model. Increasingly, top brands are turning to Nearshore markets, both for the proximity of the contact centers, strong cultural affinity, and highly educated and skilled labor pools.

Depending on your brand’s specific CX needs, and how involved you expect to be, working with teams that are multiple time zones away can create difficulty in agility and flexibility. 

If you’re considering outsourcing for the first time or thinking of changing partners, here’s why you’ll want to keep a nearshore option in mind. Read on to discover the benefits of this CX delivery model.

nearshore

Skilled & Young Nearshore Talent

Agent attrition and turnover are long-standing challenges in the BPO industry. In fact, in the U.S., 47% of agents stay in a contact center role for 12 months or less. Nearshore locations boast a highly-skilled, educated, and eager talent pool looking for work, and are more likely to stay in these roles longer term. Nearshore outsourcing can be a strong option for your bottom line, as a reliable, loyal workforce means attrition is lower, and you’ll spend less on the constant churn and burn of replacing agents who leave after just a few months.

There Is A Plethora of Available Talent

Let’s take a closer look at some nearshore locations and their talent pools:

Because these locations have close proximity to the US, with many graduates entering the workforce, agents can put their education to use when they need to think critically and on their feet to help customers solve a problem. They may also come to the table with more experience through internships and on-campus jobs even if they're fresh out of school.

More Bilingual and English Speakers

Communication with customers is key, and language is an essential part of that. An ICMI/Lionbridge study showed 60% of customers expect service in their native language, and quality scores increase when customers receive support in their native language. Yet, 79% of contact centers have customers who aren’t native speakers of the primary language they serve. Providing support in your customer’s native language can be crucial to differentiate your customer experience from your competitors’. 

This is not as much of a challenge for Nearshore contact centers. Most nearshore locations offer a highly educated workforce with truly bilingual agents who have been exposed to English language and American culture throughout their education.

If your customers are primarily U.S.-based, it may be simpler to find agents who speak their primary languages, often English and Spanish, like natives, when you move CX nearshore. They may also be more familiar with the cultures of your customer base and be able to take on the tone and colloquialisms that exude empathy, compassion, and confidence, which they’ll need when trying to work through support issues.

Digital Natives Are Key For Digital Brands

An added benefit is that a large number of rising or recent graduates means that there is a sizable network of digitally native talent available to work in these locations. As an example, Mexico has nearly 60 million active workers, with an average median age of 26. Similarly, approximately 76% of the workforce in Nicaragua is under 40 years old.

A diverse workforce of digital natives as customer support agents is one way that brands are gaining a competitive advantage and ensuring that they are able to provide the digital support customers now expect. Since digitally-native Millennials make up one of the largest consumer groups, who better to serve them than other experienced, tech-savvy digital natives? A strong cultural affinity to the US and to new digital environments and innovation is a winning combination when it comes to nearshore talent. 

nearshore

Access To Your CX Teams

If your headquarters are in New York or San Francisco, and your contact center is, too, it’s easy to have a presence and check up on your partner. You can host in-person meetings (when safe) and have team-building events more easily. But keeping your contact center onshore is not the only way to keep operations close.

Keep Travel Short and Sweet

Nearshore contact centers provide the closest proxy to onshore locations, while still delivering similar cost savings to offshore locations, which often require a full day of air travel with one or more layovers, not to mention the difficult jet lag. To put it into perspective, here are some travel stats to some popular outsourcing locations:

  • The fastest direct flight from the United States to Jamaica is about 4 hours, and direct flights run regularly from hubs like New York, Philadelphia, Atlanta, Miami, and Washington D.C. The roundtrip cost is typically under $300.
  • Many locations in Mexico are just a short drive from San Diego, and flights can be just 2 hours long. 
  • In comparison, flights to offshore locations can be multiple days and have multiple layovers. The average travel time to India from the U.S. is 15-18 hours, and can be 14-22 hours to the Philippines, with both trips costing upward of $1300+. 

Because of the time and costs associated with travel, CX leaders can visit more frequently to walk the contact center floor in nearshore locations to interact with agents, and build chemistry with managers. It helps put a familiar and friendly face to the person behind emails and Slacks.

What’s more, having similar time zones makes it easier to communicate with contact center managers and supervisors through teleconferences.

Cost Savings

You’ll save on time and travel costs when you tap a nearshore outsourcer over an offshore outsourcer. But you might worry: will an outsourcer closer to the U.S. break the bank? The answer: No. 

Will a nearshore CX outsourcer help you save money?

The answer: Yes, nearshore outsourcing will offer sizable cost savings. While further away offshore locations might have even more cost savings, you will still save on your contact center operations by moving to a nearshore delivery location. While exact savings will vary from location to location, and from outsourcer to outsourcer, US-based companies save, on average, 38% to 48% by outsourcing to Central and South America. Compensation for customer support agents in nearshore locations tend to range anywhere from $12-$17/hour depending on those factors. This is in relation to $20-30/hour in the US.

Here’s another example: In Mexico, ​​a Junior BPO Resource salary is 30.9% of U.S., and a higher skilled BPO Resource would make 47.8% of U.S. salary. 

Keep in mind when tapping an outsourcer, you do not have to shoulder costs related to infrastructure or employee benefits, recruitment, and training. 

Conclusion

The location of a contact center will often determine the cost. However, it’s important to look beyond the initial price tag. Quality of service is also critical and pays dividends. It’s up to 25 times more expensive to find new customers than retain existing ones, and PwC research shows that 32% of customers will bolt, even from a brand they love, after a single poor experience.

You’ll want to find an outsourcing partner who can provide agents who speak the language, understand the culture, and are available in similar time zones as your customer to ensure a top-notch experience. These qualities can be easier to find in nearshore locations. The workforce may also be more educated and experienced in a nearshore setting. Keep in mind the potential for travel costs when determining where to house your contact center. It’s usually cheaper and faster to travel to nearshore locations than offshore ones, making in-person interactions more budget-friendly and possible.


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