Why Nearshoring to Colombia Is an Excellent Strategic Option for US Businesses
After decades of lingering on the shortlist, Colombia bagged the first spot on the annual Offshore BPO Confidence Index in 2021. The country gained an outstanding 90.9% rating and topped 12 of the world’s most popular offshoring and nearshoring destinations.
With the exciting value proposition it offers, Colombia’s fast-growing BPO market has caught the eyes of savvy U.S. businesses. Many consider nearshore outsourcing to the country a great option to tackle talent shortage, soaring costs, and other business issues affecting U.S. companies today.
This article will analyze why nearshoring to Colombia is an excellent strategy to gain essential support for your business. But first, let’s discuss what nearshoring is.
What Is Nearshore Outsourcing?
Typically, when someone hears outsourcing, offshoring destinations, such as the Philippines, are the first to come to mind. Offshore outsourcing has been the primary option for U.S. businesses looking to reduce costs and gain unavailable expertise.
Nearshoring is another type of outsourcing strategy wherein you delegate specific business functions to an external provider based in a country near your main headquarters. Unlike offshore outsourcing providers that are continents away, nearshore outsourcing contractors are closer to the outsourcing client.
6 Reasons Why Your Business Should Be Nearshoring to Colombia
1. Colombia’s economy is among the strongest in South America.
Colombia’s stable economic conditions make the country a desirable site for U.S. businesses looking to outsource nearshore. Even while recovering from the impacts of the pandemic, Colombia’s economy is projected to grow 5.5% in 2022 and 3.1% in 2023.
The primary factor driving the positive trajectory is the country’s robust technological ecosystem. Colombia’s networks and infrastructure meet the new normal standards, enabling its economy to thrive amid pandemic restrictions. As the world enters the next phase of the digital economy era, leveraging the country’s innovative leadership will help accelerate your business expansion goals.
Silicon Valley of Latin America
- With 11 operational submarine communications cables, Colombia is the second country with the highest number of cables in the region.
- The country has one of the largest technically skilled populations in Latin America, producing about 13,000 tech graduates yearly.
- As of the third quarter of 2020, Colombia has 38 million broadband internet connections.
Laws and foreign regulatory policies also play a significant role in maintaining Colombia’s competitive business climate. The Colombian government has made the country a fertile international trade ground, from ensuring liberalized trade measures to providing fair tax incentives. The World Bank even recognized the country as the most investment-friendly destination in Latin America.
2. Colombia’s time zone is closely aligned with the US.
If you consider outsourcing but are wary of the vast time difference innate to offshore outsourcing, nearshoring to Colombia is a great alternative. The country shares the same time zones as the U.S, making remote communication and collaboration easier.
Nearshore outsourcing also makes attending in-person meetings more convenient and affordable. Anyone who has been on a 12-hour flight would appreciate the proximity of Colombia to the U.S. If you need to attend an important meeting in person, you can easily hop on a direct 6-hour flight from New York to Bogota, the country’s capital.
3. Colombia has a bilingual workforce.
Although Spanish remains the most widely spoken language in Colombia, the country is a multicultural nation. The government invests heavily in preserving its diverse native languages and developing Colombians’ bilingual skills. Colombian policymakers have designed and backed such policies for more than four decades.
Foreign languages, especially English, are taught to students starting in elementary. These initiatives help strengthen the country’s workforce proficiency in the language and prepare them for the future global workplace. Take a look at the following statistics:
- More than 52 million people speak Spanish in the U.S. alone.
- Analysts predict that 1 in 3 people in the U.S. will speak Spanish by 2050—the same year Colombia eyes to be fully bilingual.
- The demand for bilingual workers has increased by 30% since COVID.
Nearshoring to Colombia enables you to facilitate a smoother cross-border collaboration within your company. More importantly, it allows your brand to serve diverse customers across the globe.
4. Colombia has the third-largest labor force in Latin America.
Nearshoring to Colombia is shaping to be another strategic option to curb the talent shortage hounding U.S. businesses. With 51,761,146 inhabitants, the country has the third-highest population in the region as of 2022.
Colombia also boasts a strong labor participation rate of 59.80%. About 500,000 members of the country’s workforce belong to the BPO sector. Analysts foresee the country’s workforce participation rate improving further to 62.50% in 2023 and 63.00% in 2024.
In the U.S., however, both population growth and labor participation are on a downward trend. The country’s birth rate fell to its lowest at 4% in 2020. Moreover, as of January 2022, the U.S. employment-population ratio remains at the pre-pandemic level of 59.7%.
Nearshoring to Colombia will allow access to a more significant workforce population and expand your talent pipeline.
Read More: From ‘The Great Resignation’ to Labor Shortage: Top 6 Factors That Will Spur Outsourcing Growth in 2022
5. Colombia has strong cultural and economic ties to the US.
Colombia and the U.S. share a solid diplomatic relationship that dates back to 1822. The countries also enjoy long-standing bilateral economic relations that deepen their social and cultural ties. Along with Colombia’s geographic proximity to the U.S., these factors contribute to Colombians’ profound understanding of American customers’ habits and behaviors.
The two countries also share similar business cultures. Practices that are unacceptable to some offshore outsourcing destinations, such as being straightforward, are generally accepted and often not taken personally by both cultures. These dynamics make it easier for both parties to go separate ways if a project doesn’t work out.
6. Colombia offers cost-competitive nearshoring solutions.
The cost of living in Colombia is 71% less expensive than in the U.S. For this reason, many expatriates choose to settle in the country. It is also why many American companies tap Colombian BPOs for different types of outsourcing solutions. From office space rentals to labor, expenses are considerably less in Colombia.
The figures below can give you an idea of how much nearshoring to Colombia may cost:
- As of August 2021, the average annual salary in Colombia is $14,425.
- The average yearly salary for a customer service representative is over $4,400.
- The average software engineer’s salary is around $16,600 per year.
Nearshore outsourcing is inherently more cost-effective than outsourcing onshore. With prices of nearly everything rising at their fastest rates in the U.S., it’s time to consider embracing the economic advantage of outsourcing nearshore.
Turn to SuperStaff for Comprehensive Onshore, Nearshore, or Offshore Outsourcing Solutions
SuperStaff is a forward-thinking company specializing in a broad range of business and knowledge process outsourcing services. We have offices in Pennsylvania, New Jersey, and Texas. Additionally, we have offshoring centers in Makati, Angeles, and Clark—some of the most progressive business districts in the Philippines.
To cater to the growing nearshoring needs of businesses worldwide, we have also expanded our operations to Latin America. Our newly established headquarters in Colombia lends the same level of excellence and expertise we have provided our global onshore and offshore outsourcing partners for more than 13 years.
Take advantage of the exciting opportunities SuperStaff has in store for your business. Contact our nearshore outsourcing specialists to discover how.