Unlocking Colombia: Your FAQs on Nearshoring Answered

Published: April 21, 2024
A red pin on Colombian map. Image caption reads: Unlocking Colombia: Your FAQs on Nearshoring Answered

In recent years, Colombia has emerged as a prime destination for nearshoring, attracting businesses from around the world with its strategic location, skilled workforce, and favorable business environment. 

As more companies consider nearshoring to Colombia, addressing common questions and concerns about this outsourcing arrangement is essential. Keeping yourself informed about the advantages, processes, and challenges of this outsourcing solution can help you make strategic decisions for your growth and success.

In this comprehensive guide, we’ll explore the frequently asked questions (FAQs) about nearshoring to Colombia, providing insights and answers to help businesses make informed decisions.

Answering 10 Frequently Asked Questions About Nearshoring to Colombia

What is nearshoring?

Nearshoring is an outsourcing model in which companies can offload part (or all) of their business processes to a third-party provider in a neighboring country. For example, businesses in the U.S. and Canada often outsource to nations in Latin America, including Colombia, Mexico, Brazil, Argentina, and Peru.

Why are more companies looking for nearshore outsourcing services?

Global supply chain disruptions and ongoing geopolitical tensions have created an increasingly uncertain and unstable international trade environment. For this reason, many businesses are choosing to keep their operations closer to home while simultaneously taking advantage of the lower labor costs from nearby countries.

Even powerhouse brands like Apple, Dell, and General Motors are realizing the powerful advantages of nearshoring to Latin America. Working with nearshore providers allows companies to stay competitive in a rapidly evolving business landscape by improving flexibility, agility, and efficiency without breaking the bank.

Why should you choose Colombia for nearshoring services?

Colombia offers several compelling reasons for businesses looking to nearshore their operations. Compared to other nearshoring locations, Colombia stands out as an ideal nearshoring hub because of its fast-growing economy, rising number of foreign investments, and favorable government initiatives. 

According to the 2023 IMD World Competitiveness Index, Colombia ranks third in the Latin American region in terms of global competitiveness. It is also LatAm’s third most populated country, boasting over 50 million people. Businesses can take advantage of Colombia’s massive talent pool and gain access to specialized talent beyond their borders.

With its stable economy, strategic location in the same time zone as major North American cities, and competitive labor costs, Colombia presents an attractive option for companies seeking to optimize their operations and expand their global footprint.

What are the economic and cost-saving considerations involved in nearshore call center services?

Nearshoring to Colombia can result in significant cost savings for businesses. It combines the advantages of offshore outsourcing (which refers to outsourcing to faraway countries) and onshoring (which means maintaining operations domestically), bringing you the best of both worlds.

Compared to onshore solutions, nearshoring often offers lower labor costs, reduced overhead expenses, and potential tax incentives for foreign investment. At the same time, compared to offshore call centers, this outsourcing solution can give you greater control over your operations and enables easier communication due to similar time zones.

To illustrate the difference between onshore and nearshore costs, the average salary for a customer service representative in the United States is $38,538 (as of March 2024). Meanwhile, the same role in Colombia earns an average of 19 million COP or $4,974.54.

By leveraging Colombia’s cost-effective business environment, companies can reap reduced costs and improve their bottom line while maintaining high-quality standards.

Is Colombia’s talent pool sufficient for your nearshoring and outsourcing needs?

There’s a reason why today’s companies see Colombia as an excellent place to do business. The Latin American nation boasts a talented and diverse workforce, particularly in industries such as information technology (IT), technical support, and customer service. 

Additionally, Colombia’s bilingual workforce, proficient in English and Spanish, makes it an ideal destination for companies serving international markets. Many businesses hire nearshore call centers for multilingual support to cater to Spanish-speaking customers within the United States or in several parts of Europe.

Can you hire tech talent from a contact center nearshore?

Nearshore call centers in Colombia offer more than back office and customer support roles. When you work with these BPO providers, you can also gain access to specialized tech talent in software development, engineering, and even AI development support.

Colombia has already established itself as a leading hub for tech talent, producing over 100,000 engineers and 10,800 IT professionals annually. With a strong emphasis on education and skills development, Colombia produces a steady stream of qualified professionals equipped with the expertise needed for various nearshoring functions.

Now, with the recent push toward artificial intelligence (AI) development, Colombia has continued to lead the charge in adopting new technologies. In fact, the OECD AI Policy Observatory highlighted Colombia’s role in promoting AI adoption and implementing AI initiatives across the region.

How do cultural compatibility and communication factor in nearshoring?

Colombia’s cultural affinity with Western countries, combined with its bilingual workforce, facilitates seamless communication and collaboration between nearshore teams and clients. 

Recent studies have found that English is the second most spoken language by Colombians, following Spanish. Among those who use English at home, 90.5% are fluent speakers. As such, businesses that decide to nearshore to Colombia will have no trouble finding bilingual speakers to collaborate with.

The Latin American nation also shares a similar time zone with the United States (the U.S. is only one hour ahead), allowing teams to easily schedule virtual or in-person meetings and work together in real-time.

By embracing cultural diversity and fostering cross-cultural competence, businesses can bridge cultural and language barriers, leading to enhanced productivity, creativity, and innovation in nearshoring operations.

What legal and regulatory considerations should businesses be aware of when outsourcing to a Colombia call center?

When nearshoring to Colombia, businesses must navigate the country’s legal and regulatory landscape, including labor laws, intellectual property regulations, and data protection standards. Here are just a few of the things you should know before hiring in Colombia:

  • All companies must be registered with the Colombian Chamber of Commerce to operate legally.
  • Securing permits, certificates of incorporation, and other necessary documents is crucial for setting up your business in the country.
  • Make sure to get your Tax ID number (TIN) from Colombia’s tax officials to keep your operations running smoothly.
  • Foreigners setting up a company in Colombia must secure a Visitor Visa for business purposes.

By complying with local regulations and obtaining necessary permits and licenses, businesses can mitigate legal risks and establish a solid foundation for their nearshoring operations in Colombia.

How does Colombia’s infrastructure support nearshore BPO services?

Colombia’s infrastructure, including transportation networks, telecommunications infrastructure, and internet connectivity, provides a solid foundation for nearshoring operations. 

According to the U.S. International Trade Administration, Colombia has significantly progressed in its information and communications technology (ICT) initiatives. As of 2022, the nation has expanded its internet access to 48.9 million, including 8.8 fixed access points and 40.1 million mobile connections.

With ongoing investments in technology hubs and innovation centers in major cities, Colombia is well-positioned to support the digital transformation and technological advancements driving nearshoring activities in the country.

What security and risk management measures should businesses implement when working with a nearshore center?

While Colombia offers numerous advantages for nearshoring, businesses must also consider security and risk management factors. 

For instance, although the urban centers in Colombia, such as Medellin, Bogota, and Cali, may be easy to access, some rural areas still lack the roads, ports, and technical infrastructures needed for business. Some cities may also still have security problems, so it’s essential for business owners to be familiar with which areas are ideal for setting up shop.

Overall, however, most industry experts agree that the business environment in Colombia poses an acceptable risk. By implementing robust security measures, collaborating with local partners, and staying informed about potential risks, businesses can safeguard their nearshoring operations and ensure business continuity in the face of unforeseen challenges.

Entrust Your Operations to an Experienced Nearshore Service Provider

As businesses continue to explore opportunities for nearshoring, Colombia stands out as a promising destination. It offers numerous advantages for companies seeking to optimize their operations and expand their global reach. 

By addressing common questions and concerns about nearshoring to Colombia, businesses can unlock the full potential of this dynamic market and achieve sustainable growth and success in nearshoring endeavors.

At SuperStaff, we are committed to helping companies like yours maximize their operational efficiency while keeping costs low. With our nearshore call center solutions, you can expand your business, grow your capabilities, and improve your bottom line.

Ready to begin your nearshoring journey? Get in touch with our Colombian team today!

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