© 2017 by GroupBDO LLC

  • Black Twitter Icon
  • Black LinkedIn Icon
  • Pinterest - Black Circle
  • Black Google Places Icon
  • Black RSS Icon
Featured Posts

Political Pressure on Mexico Triggers Disagreement Over Future of Call Center Investment

February 24, 2017

 

Donald Trump’s actions during his first month as President have sent ripples across the world, not least of all in Mexico, where the country stands unified and defiant toward him – even its own President, Enrique Peña Nieto, cancelled his visit to the United States, surprising the nation.

The political pressure that Mexico now faces is highly likely to impact the way U.S. companies view the country as a preferable investment location, particularly once the re-negotiations of NAFTA are underway.

Michael Mills, Senior Vice President, Call Center Solutions, North America, CGS – “Contact centers are pretty much going to be left alone”.

 

According to Michael Mills, Senior Vice President of Call Center Solutions in North America at Chile-based call center provider CGS, this could inevitably lead to other Latin American nations picking up what Mexico might lose, including stakes in the contact center industry.

 

New Regime, New Predictions

Whether or not this will happen remains to be seen, but CGS is bullish about its expectations for positive growth in Chile over the next five years. “To be honest, I would not have been able to have said that if this new administration had not won the election, because nothing would have changed,” said Mills. As an example of how political unrest can cause shifts in the industry, one request that CGS recently received was from a telecoms client that wanted to move 750 agents to Romania from the Philippines. Mills expects a similar situation to happen in Mexico, but also a positive growth for the global industry overall.

 

“As the election crept up on us, our existing offshore and onshore support clients became more interested in expanding their contact center operations,” he said. “Based on the business I am in, I’m seeing that Trumps’s immediate actions will boost both offshore and nearshore, but also onshore contact center opportunities.”

 

Divisive Predictions for Call Center Industry

Meena Priyadharsini, Locations Desk Lead Researcher at Neo Group, has more of an outsider’s view of the market, presenting a much less positive outlook. “Donald Trump’s election promises, if implemented, are expected to have a negative impact, not only on the sourcing industry, but also on the manufacturing sector across the sell-side countries, be it in Latin America or in Asia Pacific region,” she said. “We expect the outsourcing sector’s growth rate to slow down during 2017 if there are no positive developments on Trump’s stance.”

 

Furthermore, Alejandra Romero, Business Intelligence Senior Analyst at the Instituto Mexicano de Teleservicios (Mexican Institute of Teleservices or IMT), is seeing a much more positive impact on Mexico’s call center industry. “We strongly disagree that [Trump’s approach to outsourcing] will have a negative impact on the Mexican call center industry,” she said. “The elements that Mexico has always possessed to attract investments are still here in the country. Economically speaking, hourly rates for pure Spanish agents were around US$8-10, but now cost just US$5-7 due to the exchange rate. For bilingual, it’s US$8-10. Regardless of the incentives that retain more workers in the United States, Mexico will still be very attractive.”

 

Romero also believes that Trump’s forceful immigration policies will drive agents home to Mexico, bringing with them a perfect combination of English skills, cultural experience, and new knowledge that will add more value to the Mexican call center industry when they rejoin it.

Given the company’s strong presence in Mexico, we also reached out to Teleperformance for comments, but received no response.

 

Preparing for All Outcomes

Meena Priyadharsini, Locations Desk Lead Researcher at Neo Group

In order to limit the potential negative impacts of the Trump regime, Priyadharsini believes that outsourcing associations in Latin America, such as PROSOFT, CINDE, and BRASSCOM, to name a few, should leverage the aid of major outsourcers in the United States to lobby for an easier regime. She also advises companies to expand and move the focus of the clientele base from the United States to other buy-side countries in Europe and APAC.

 

Regardless of how locations are affected, Mills believes that companies will soon need to find more resources for manufacturing and manual labor in-house, meaning they will certainly look for lower-cost alternatives to their internal contact centers. This will either be cheaper onshore sub-contractors, or offshore and nearshore solutions.

“Businesses are realizing that if Congress passes all these initiatives, with tax regulations being lifted, and tax policies being completely revised, then it’ll open up a positive Pandora’s Box for small, medium, and large businesses that want to start making investments,” said Mills. “Companies that didn’t hedge their labor in the past will need to find a way to do it now, which will be good for contact centers.”

 

Clearly the impact on the nearshore call center industry is still a divisive topic, and one that will continue to unfold as the new President continues to exact his campaign promises on outsourcing.

Please reload

What is Customer Effort Score?

November 20, 2019

1/10
Please reload

Recent Posts
Please reload

Archive