Despite labor markets gradually showing stability, talent shortages continue to disrupt Western economies this 2023. How can businesses navigate talent shortages amid the bleak outlook on the global economy?
For global leaders and multilateral organizations gathered at the recent World Economic Forum to discuss commerce, global value chains, and other key trade agenda issues, the answer is meticulous planning with cautious optimism.
We’ve compiled a few compelling figures that paint a picture of the rigid labor market and quickly outlined strategies that include nearshoring in Latin America and offshoring to the Philippines.
10 Pressing Statistics That Capture the Global Talent Shortage
How Nearshoring in Latin America Can Help Address Talent Shortages
Latin America is making waves as the new outsourcing hub for the Western hemisphere. Google, IBM, and Dell are just a few examples of tech giants that have expanded their business to the region.
While talent shortages are one of the primary drivers, firms also realize that nearshoring to LatAm brings multiple benefits to businesses.
Why Colombia Is the Top Destination for Nearshoring in Latin America
Colombia is a fierce contender in nearshoring in Latin America.
Since its government first promoted the industry, the Colombian BPO market has grown tremendously. The country took the top spot in the annual Offshore BPO Confidence Index, scoring an impressive 90.9 and edging out 11 other established markets.
If you’re looking to nearshore to a top destination in Latin America, check out this list of reasons why you should consider the burgeoning “Silicon Valley of Latin America.”
1. Skilled and Bilingual Workforce
Colombia has one of the largest workforce populations in Latin America, with over 26 million people. With a high regard for education, the country’s talent pipeline is fueled by over 3.8 million students from premier universities and institutions.
The country also has a primary education system that fosters bilingual skills for global competitiveness. Colombians can offer more localized support for Latin American markets – while communicating seamlessly with their outsourcing partners in the U.S.
2. Proximity to the United States
Colombia is ideally close to its primary outsourcing market — making it possible for companies to secure global supply chains, and collaborate on projects.
This proximity also boosts logistical control and savings through lower international shipping costs, should companies expand commerce and investment opportunities to the region.
3. Strategic Location To Link Global Supply Chains
Colombia’s strategic location at the Northern tip of South America provides companies a gateway to the rest of Latin American countries.
It provides clients access points to South and Central America ports, securing supply chains and tapping into international markets without moving too far from their bases. This location also paves the way for intraregional trade, regional integration, and a seamless transition to direct foreign investment.
4. Stable Political Environment
Colombian government entities strive to ensure political stability, trade sustainability, a steady supply of skilled workers, and a conducive business environment for investors.
Leading them is President Gustavo Petro, who recently met with the Biden administration to fortify their bilateral relationship and expand Colombia’s 2016 peace accord.
5. Government Support
A strong partnership between the public and private sectors is at the core of Colombia’s BPO growth.
For years now, export promotion agencies have focused on the industry. Senior government officials, including trade ministers and digital commerce ministers, have also taken steps to attract investment.
Even as the pandemic wreaked havoc on the globe, the industry showed resilience, with the help of the government’s robust fiscal measures and sustained investment promotion to promote economic recovery.
The government also supports the private sector by strengthening foreign affairs with other countries to lower trade friction.
6. Time Zone
Located close to the East coast, Colombia shares a similar time with the U.S. Eastern Standard Time (EST), allowing nearshore clients to get real-time updates, seamless communication, and smooth collaboration from their partners.
7. Quality Service
As early as 2012, a study sponsored by the Inter-American Development Bank (IDB) already named Colombia “the hidden jewel for outsourcing in Latin America.”
With Colombia’s high-quality services, nearshoring clients are sure to reach their growth potential.
8. Competitive Labor Costs
Colombia’s competitive labor costs drive significant savings for its nearshore clients.
How Offshoring to the Philippines Helps Address Talent Shortage
Leading private sector leaders are offshoring to the BPO capital of the world to generate additional funding and boost competitiveness in the digital marketplace.
1. Large talent pool
While the pandemic caused a devastating blow to the Western labor market, it had the opposite effect in the Philippines.
Over a million eligible graduates from premier universities enter the labor market every year, hoping to put their education, training, and strengths to good use.
2. Language Proficiency
The Philippines’ high English proficiency and literacy rate are among the country’s greatest strengths that have helped establish it as a top offshoring destination.
3. Well-Established BPO Industry
Since it began in 1992, the Philippine outsourcing sector has seen exponential growth and success.
The country surpassed India’s voice-based services in 2010, which earned it the well-deserved title “BPO Capital of the World.” The Philippine outsourcing sector has since expanded to more complex BPO services including digital trade and knowledge process outsourcing, all while keeping its lead in contact center services.
4. Cultural Ties
From a U.S.-paralleled education system to Western pop culture, American values are intricately woven into the fabric of Filipino consciousness.
The country’s distinct Asian background and historical Western roots enable modern Filipinos to work with people from all over the globe.
Offshoring has many advantages in the Philippines, but cost advantage is the most common reason companies do it.
Much like Colombia, the labor cost in the country is also more competitive.
Every dollar invested in Philippine outsourcing pays dividends. Clients can reap the benefits of massive savings without quality being sacrificed.
Talent Availability in Colombia and Philippines
1. IT and Data
The industry faces a severe talent gap as digital transformation drives demand for tech workers.
One recent Gartner report reveals that up to 64% of IT executives report that the shortage of skilled IT workers is their most significant barrier to adopting emerging technologies.
2. Sales and Marketing
Research from global media advisors, MediaSense, showed that almost half (48%) of all ad companies and media owners believe the industry is in its worst-ever (labor) crisis.
Meanwhile, a different study also shows that the demand for sales people jumped by a staggering 65% at the outset of the pandemic, with 700,000 unfilled positions in the U.S. alone.
3. Operations and Logistics
As the demand for online retail soars, so does the need for export services.
Consumers’ expectations are evolving. One effective strategy companies can leverage to keep pace is outsourcing — an end-to-end solution that covers all your logistical needs.
4. Manufacturing and Production
The U.S. manufacturing industry is bracing for a major post-pandemic resurgence, but one thing stands in the way: labor shortage.
Deloitte believes there will be a shortage of over two million American manufacturing workers by 2030, representing a $1 trillion annual opportunity cost.
5. Customer Facing and Front Office
As more businesses shifted their operations online, the demand for customer service soared.
Many customer service leaders (61%) have reported a considerable increase in the volume of calls.
Connecting the Global Economy With Exceptional Outsourcing Services
Firms can gain a competitive edge with SuperStaff, an outsourcing company offering a full suite of business and knowledge process outsourcing services.
With more than a decade of success under our belt, our newly established headquarters in Colombia guarantees the SuperStaff brand of excellence and expertise that clients have come to expect from our offices in the Philippines and the U.S.
Learn how our services for nearshoring in Latin America can help you navigate a tough labor market and business climate.