As with any outsourcing geography, an influx of call centers will eventually put a strain on the labor market, leading to saturation and rising labor costs. This is something to keep an eye on throughout the nearshore spectrum.
Geopolitical instability is also a concern in the nearshore region. Unrest, contagion and spillover effects are always top of mind, and we must heed to travel warnings and restrictions. But as we have seen over the years, safety and security is always a concern no matter which country you outsource to.
Multilingual services will continue to grow nearshore, although not on a large scale, as demand increases and US clients look to outsource in-language needs closer to home in comparison to more prevalent offshore for multilingual support like the EMEA region.
Detractors of nearshore are concerned with scalability. In truth, the world is running out of very large, viable, English-speaking outsourcing markets like the Philippines and its predecessor, India. Scale is relative to each client — 100 seats may be considered large for some clients whereas, for many outsourcing buyers, it is a small fraction of their sourcing need.
We know of US companies that source thousands of seats within the nearshore spectrum. The fact is that the nearshore region is much smaller than the Philippines in terms of market size and maturity. But, the nearshore market does offer scale, provided that the right vendors in the right labor markets in the right countries are selected.
Overall, we believe that most nearshore countries still haven’t reached market maturity, although some have. The market will remain competitive for the years to come and, in fact, we will most likely see more complex call types and customer interactions going nearshore from US companies, in particular.
So, the outlook remains positive for nearshore with the region’s best years still to come!
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