Scotland Accounts for >50% of all FTEs Serving UK Contact Centers | Market Insights™
March 20, 2015
Scotland accounts for over half of all FTEs serving UK contact centers
Scotland accounts for over half of all FTEs serving UK contact centers
Why Egypt should be on your location radar
Banking on Poland for complex BFSI processes. Focus on: talent availability, cost savings, cultural affinity, geographic proximity, and operating environment
Offshore/nearshore contracts on the rise in European procurement outsourcing (PO)
Over the past several years, Asia has been leading the offshore growth momentum in provision of English-language contact center services. But recently, there has been a steady movement towards nearshore delivery of these services to North America, particularly the United States. Nearshore, in the context of this discussion, primarily refers to Latin American locations that have the advantage of being in the same time zone as North America and share cultural similarities.
Central America and the Caribbean are also gaining importance as part of this burgeoning group. Cities like San Jose, Guatemala City, and San Salvador have established themselves in this market, while locations such as Santo Domingo (Dominican Republic) and Montego Bay (Jamaica) are emerging as strong contenders. What makes this geography unique when compared with the rest of Latin America?
The figure above depicts the nearshore contact center market in terms of FTEs among Central American and Caribbean locations. As is shown, well established Costa Rica and Guatemala comprise 50 percent of the market, while El Salvador, Panama, Dominican Republic, Jamaica, etc., make up the rest of the pie as emerging locations. Consistent with trends observed in other regions of the world, global/regional service providers are the primary adopters of the emerging areas, while buyers’ global in-house centers (GICs) continue to be concentrated in established locations like Costa Rica and Guatemala.
The key attractiveness of this geography lies in its talent pool. Most of these locations offer large relevant graduate pools, especially for Spanish language delivery. However, challenges with employability of talent for English language skills affect the scalability potential in the region, especially for emerging locations. To overcome this issue, companies typically augment the graduate pool with part-time university students and high school graduates not pursuing further education.
An interesting trend emerging in these locations is that the service providers have tied-up with investment promotion agencies and other government bodies to set up language training institutes. Other providers have adopted staffing models that enable constant access to the best talent in the country. One example involves co-locating the contact centers within university campuses. Part-time university students are employed as contasct center agents, and are given incentives in the form of subsidized tuition fees. This arrangement also helps reduce attrition, which is a constant challenge in the contact center space.
In addition, many locations are taking proactive steps to increase the visibility of the nearshore contact center industry, and make it an attractive and viable employment option. For many, these jobs create the difference between poverty and prosperity. It is no wonder, then, that the Dominican Republic has been dubbed “The Call Center Republic.”
Everest Group has conducted a deep-dive analysis of this region, covering the current nearshore contact center landscape, relevant talent pool, and costs and risks associated with setting up operations. For more details, please see Everest Group’s latest report, “Central America and the Caribbean Answer the Call for English-language Contact Center services.”
The offshore F&A services sector in Central & Eastern Europe (CEE)
Central & Eastern Europe arbitrage expected to decline but remain significant through 2018 (compared with source locations in Western Europe)
F&A service delivery centers in Central & Eastern Europe have a lot to offer, but value and services vary in established and emerging locations
Click the image to enlarge
Global services players increasingly leveraging tier-2/3 locations as technology and infrastructure developments, and market saturation/competition in tier-1 cities, make these locations attractive
Over the last 18 months, we have seen a significant shift in the global in-house center (GIC) location strategy of UK-based firms, with many more embracing Central and Eastern Europe (CEE) over offshore countries for their GICs.
Factors driving the growth in nearshore locations include:
Some of the popular nearshore locations being leveraged for IT, F&A, and call center (CC) services are depicted in the diagram below:
While some companies are leveraging their existing nearshore offices and expanding them into GICs, others are setting up greenfield centers. Recent examples of new GIC set-ups by UK firms in nearshore locations include:
What are the implications of this trend? Are we saying offshore locations will lose their draw for UK-based buyers? Certainly not! Although the CEE region will continue to maintain its growth momentum, several factors will still drive GIC activity in offshore geographies among UK buyers:
Beyond the traditional offshore locations, there is increasing acceptance of South Africa, Egypt, and Mauritius as delivery locations for UK and other European buyers due to accent similarity and strong cultural affinity. But the battleground is now definitely becoming hotter between nearshore and offshore locations.
For more insights into the GIC space, please see the following additional Everest Group research:
Photo credit: Charles Clegg
©2023 Everest Global, Inc. Privacy Notice Terms of Use Do Not Sell My Information
"*" indicates required fields