Nearshore call centers are becoming increasingly popular among businesses looking to outsource or scale their customer support operations. Whether you need a call center for outbound sales and marketing, inbound customer service, or technical customer support, an outsourced call center can provide these services—and the ability to easily scale the number of agents you have up or down as demand shifts throughout the year.
As opposed to offshoring or onshoring, nearshoring refers to call centers that are located in a foreign country that’s still nearby to the company’s headquarters. For example, a US-based company might use a nearshore call center in Mexico or Puerto Rico. There’s a wide range of benefits from outsourcing to a nearshore company, from the talent prospects to the time-savings of outsourcing to a knowledgeable team to the cost-savings of offshoring talent.
To give you a better understanding of which outsourcing option is best for your company, we’ll outline the pros and cons of nearshore call centers and contrast them with other popular outsourcing options as well as hiring in-house. Keep reading to see which makes the most sense for your goals and needs.
Nearshore Call Centers – Pros and Cons
Nearshore call centers are a great benefit for many companies looking to expand their customer service, scale up or down accordingly in different seasons or provide an improved customer experience. While nearshore call centers are more expensive than offshoring, they also provide a host of benefits you won’t find through other outsourcing options—namely, proximity, affordable pricing, talent, a great labor market, and stronger infrastructure.
Nearshore call centers’ proximity to the US is a huge benefit. In today’s connected and ever-more-globalized world, it may seem like location doesn’t matter, but consider:
- If you need to travel to your outsourcing partner’s location for training or management, would you rather fly to Mexico or India?
- Very distant call centers can have you taking meetings and conference calls in the middle of the night (normal business hours for them).
- Staggeringly different time zones can significantly slow down communication and implementation processes, causing delays in your work and results
- Call centers who are closer to the US typically have agents who are more familiar with US culture and languages, and may have even lived or worked in the US before.
As you can imagine, having a call center that is closer in proximity to your business headquarters makes communication, collaboration and management much easier. Not to mention, it often delivers a better experience for customers, since agents will be more familiar with US customs and cultural nuances.
Pro: Affordable Pricing
Nearshoring is often initially appealing for its affordable pricing. Nearshore outsourcing can be 30% – 50% cheaper than hiring in-house or domestically, and, as a result, has grown in popularity in recent years among businesses looking to scale affordably in a tight market.
Even better: while nearshoring is more affordable than working domestically, it also provides a great value for the cost. For many companies, paying a premium for onshore employees doesn’t yield better results, additional services or better technology or communication. The proximity of nearshore companies to the US means that new technology is often adopted quickly, and additional services and features are often even easier for nearshore companies to offer.
Pro: Talent & a Great Labor Market
Taking advantage of a nearshore call center also means you get to take advantage of nearshore labor markets. With the current US labor market making hiring and retaining in-house teams difficult (and expensive!), nearshore markets provide top-notch talent at a more affordable rate. You won’t have to worry about the fluctuations in the US—in fact, you won’t have to worry about sourcing or hiring at all, because your call center can take care of hiring and maintaining the entire team on your behalf.
Not to mention that many nearshore call centers have access to highly skilled, well-qualified employees. One great benefit of nearshoring is that many employees will be multilingual—and often in languages that are very relevant for a US audience. For example, nearshoring in Mexico, Puerto Rico or Canada means you can have access to agents who speak Spanish or French as well as English—perfect for growing multinational companies.
Pro: Stronger Infrastructure
Nearshoring also provides companies with a partner that has availability to a stronger infrastructure than offshoring. Nearshoring companies are often located in modern cities and areas with strong internet and infrastructure to provide your company with consistent support.
Offshoring companies may be located in areas with weaker infrastructure, or they may be less adapted to implement the newest technologies. Less developed countries are also often more susceptible to political or socioeconomic risks that nearshoring companies will have developed infrastructure around.
Of course, one major benefit of outsourcing offshore rather than domestically is taking advantage of more competitively priced infrastructure and resources—however, it’s important that you don’t shortchange yourself by simply settling for the cheapest option. As with many variables, nearshoring strikes a balance between reliable and cost-effective infrastructure so you can support your domestic operations.
Con: More expensive than offshoring
While nearshoring is an affordable option and, in many cases, much more cost-effective than onshoring, it’s not the cheapest option available. In most cases, offshoring is cheaper than nearshoring, particularly when it comes to per-agent costs. In addition, overhead and other fees are typically cheaper when offshoring as well.
However, keep in mind that you get what you pay for, especially when it comes to outsourcing. And when you’re outsourcing an essential part of your business—that is, the customer experience—do you really want to scrape the bottom of the barrel for the cheapest option available?
Companies who are looking to improve and optimize their customer service definitely shouldn’t—which is why nearshoring is becoming increasingly popular. It enables you to budget effectively while still providing excellent customer service and support.
Nearshore Call Centers vs Offshore Call Centers
While nearshore call centers are located in a country near the one of business operations, offshore call centers are typically located in a country far from the business headquarters, and often somewhere that shares little in common, culturally or linguistically, with the business’ audience. For example, many offshore call centers are located in India, the Philippines, or elsewhere in Southeast Asia.
While many businesses may opt for offshoring due to the affordability, nearshoring is a great alternative that offers more benefits while still being cost-effective. Not sure which is right for your company? Take a look at some of the comparisons between nearshoring and offshoring:
|Often adopts newer technology, providing a better customer experience
||Often the cheapest option, but may lack features or services you need
|Agents often have more cultural familiarity with US customers
||Agents may not be as familiar with the cultural or linguistic nuances of the US, may be more frustrating for customers
|Nearshore agents are typically more fluent in English
||Lack of transparency is often a problem due to communication barriers
|Similar time zones make it easier to communicate and manage nearshore call centers
||Time zone differences may make management difficult, but can offer round-the-clock customer support more easily
While offshoring is usually the cheapest option, it’s important to keep in mind that you do get what you pay for in most instances. Since offshoring companies are usually located quite far from your business headquarters, you typically need a higher level of trust to work well long-term with them since the lack of proximity means you’ll have less control. Unfortunately, for many businesses, lack of transparency and difficult communication across multiple time zones means that it’s difficult to build a trusting relationship.
As a result, when working with offshore call center partners, it’s essential to define your values and goals very clearly before signing a contract. Ensure that the call center is a good culture fit, and has the experience and capability to meet your needs.
On the other hand, nearshoring often eliminates many of these problems. The closer proximity of nearshore call centers means there’s fewer communication barriers—between your businesses and between them and your customers. In addition, the proximity means you can have more transparency into the call center, more easily travel there for training or management, and often makes it easier to work together seamlessly.
While you should still carefully define value, culture and goals prior to signing a contract with any outsourcing or business partner, a nearshoring partner is more likely to align with your business goals and culture and create an effective working partnership.
Nearshore agents typically have more familiarity with the US—for many, they’ve lived, worked or studied in the US—and are more culturally and linguistically fluent. This means that your customers will have an easier customer experience, which leads to greater customer satisfaction and retention.
Nearshore Call Centers vs Onshore Call Centers
Nearshoring is also a popular alternative to onshore call centers. Where nearshoring centers are located nearby but in a different country, onshoring call centers are located in the same country as the business looking to outsource. The biggest difference between many nearshore and onshore call centers comes down to cost.
Companies for whom budget is no concern may choose onshoring simply because it’s the easiest option. However, for companies who want to improve or prioritize customer experience in a more cost-effective way, nearshoring can be an appealing—and still just as effective—option. For example, take a look at some of the differences:
|Great experience value at a fraction of the cost of onshoring
||Usually the most expensive option
|Nearshore agents are usually familiar working with US-based organizations
||Located in the US
|Familiar with US laws, compliance and so on
||Little to no worries about adherence to US laws, customs, and so on
|Many agents are bilingual in Spanish or French.
||Little to no worries about cultural or linguistic competency
One of the main benefits of onshoring is that it provides a level of (at least perceived) security for high-risk companies or companies who have to adhere to many levels of compliance. For example, healthcare organizations, financial and banking institutions and so on all have many layers of legal compliance, privacy concerns and data security to manage. Outsourcing can open up concerns about adherence to US laws, customs and compliance, as well as raise data privacy or cybersecurity issues. For some companies, keeping all operations within the US helps provide some level of security.
However, it’s important to keep in mind that onshoring doesn’t completely eliminate risk of compliance or privacy issues—after all, cybersecurity attacks can and do happen anywhere. And while onshoring can have less risk, nearshoring companies are often extremely aware and familiar of US customs and laws and have special processes in place to ensure they’re adhering to them at all times.
All that to say—onshoring ensures that your outsourcing stays within the United States, that may not be as important as you may think. In addition, depending on your location, nearshore call centers may be a closer geographical option. For example, a Texas company working with a Mexican call center could share a closer proximity (and the same time zone!) rather than working with a call center in New York or Seattle.
With onshoring, you pay a premium for a higher level of cultural familiarity. The question you have to ask yourself is, is this worth it? For many companies, nearshoring offers an excellent balance between affordability and quality.
Nearshore Call Centers vs In-House Call Centers
Nearshoring is also a good alternative to having an in-house call center. Of the four options (offshoring, nearshoring, onshoring and in-house), managing an in-house call center is typically the most expensive and time-consuming option.
After all, with an in-house team, you have to manage all the sourcing and recruiting, hiring, training, management, and so on yourself, all while providing workspaces, technology licenses, overhead and more. But is outsourcing worth it? Take a look at the benefits comparison chart:
|Nearshore Call Centers
||In-House Call Centers
|offers top-notch service without having to manage everything yourself
||requires the highest cost and level of management needed
|per-agent cost is much lower (typically 30% – 50% lower) than hiring in-house
||in-house teams are the most expensive and subject to US labor market fluctuations
|relieves you of time and some management duties
||can be difficult to find the expertise you need to manage everything internally
|allows you to maintain some proximity and control
||provides the most control in regards to training, management and compliance
For companies who don’t have the time, resources or expertise to manage an entire call center or customer service operations in-house, nearshoring is the option with the best balance of affordability and quality. However, for some companies, in-house teams can offer some benefit, particularly around control of quality and compliance.
If you need to have complete control of the management of your call center team, there’s no better way to do than hosting your team in-house. However, even with an outsourced team, there’s still plenty of ways to be involved with day-to-day management, overall quality and the strategy and direction of your team. The key is not necessarily whether your team is in-house or outsourced, but rather in being thorough in vetting outsourcing partners and ensuring you find a team that can merge well with your internal teams and systems.
At the end of the day, it’s a trade-off: you have to know which is more important for your company—saving valuable time and expense by outsourcing some of your business needs, or maintaining the control of having everything in house at a greater cost?
With in-house teams, there’s also the question of hiring and expertise: do you have experts in customer experience and customer service that you can hire for in-house positions? If not, it may be more beneficial to outsource these essential processes to experts who can work as an extension of your team. Additionally, the cost and difficulty of hiring and maintaining a team in the current US labor market is enough to deter some companies from managing their customer service in house.
So, which is right for you?
While offshoring, onshoring and in-house teams each provide their own benefits, many companies would do well to consider nearshoring as a viable option that provides a myriad of benefits. From proximity and expertise to high-quality technology and infrastructure, all while being cost-effective and cheaper than hiring domestically, nearshoring is a great option for teams looking to improve their call center operations.
To learn more about nearshoring, reach out to our team of experts to see how ROI Solutions can provide flexibility and support for your growing business.