Telecoms & IT

We Can Help

Outsourcing employment

Colombia is becoming the world's next major BPO hub.

The business process outsourcing (BPO) industry in Colombia has taken off in a big way over the last decade, with most outsourcing clients, unsurprisingly, coming from the US and Canada. The reasons behind Colombia’s market leadership in the BPO sector are manifold: Colombia is roughly in the same time zone as the US, which greatly facilitates real-time interactions; Colombia has a robust educated workforce specialized in IT; and the rate of bilingualism and fluency in English in the country risen in recent years.

Colombia is in a tight competition with other LATAM market players in the BPO sector such as Mexico and Costa Rica, but with an average annual industry growth of nearly 20%, we can be sure that Colombia will soon be ahead of the competition, attracting even more foreign investment and clients. It is estimated that the BPO industry injects some USD23 billion into Colombia’s economy each year, while creating many hundreds of thousands of jobs.

The industry is currently largely based in Bogotá, although it is spreading quickly to other major Colombian cities. As the expansion of the sector continues, it will create more jobs in areas where employment opportunities are scarce despite the presence of a skilled workforce on the lookout for work. This will also slow down the migration of Colombians to Bogotá, which with a population of 7.2 million, is already suffering from overpopulation. Only 25% of Colombia’s workforce of 26.5 million are based in Bogota, and the remaining 75% will benefit greatly from the expansion of the BPO industry to their cities.

The social impact of the BPO industry in Colombia should not be underestimated, either. Ana Karina Quessep, executive president of BPrO, a Colombian outsourcing company told TBY that the sector has closed the year 2020 with “605,000 formal jobs,” while pointing out that “of the total employee population, 60% are women. Some are the heads of their families, [while] others are students in university or technical schools. More than 80% of employees are young people between 18 and 30 years old. We are a young sector, and we are a part of the professional development of young people in the country.”

The services offered by the nation’s BPO sector are diverse: anything from accounting and auditing, sales management, logistics, IT support and contact center management, and back-office services can be outsourced to Colombian companies by North America businesses. These services came in handy for many American businesses during the recent COVID-19 pandemic, as Colombian BPO service providers stayed active during the pandemic, helping the distance-working culture that many American businesses adopted.

One of the most profitable segments of the BPO industry is running contact centers. Contact centers were previously clustered in India and, later, in the Philippines. Colombian entrepreneurs, however, have launched several contact centers in recent years with great success. Ricardo Duran, founder and president of Outsourcing S.A., told TBY that his company uses several metrics to measure efficiency to achieve maximum client satisfaction, which will ultimately give Colombia the upper hand in the market.
Durand explained that, “in Outsourcing S.A., a key metric is first contact resolution because it has a transformative potential for our clients and the end user. Another metric that is relevant to increase efficiency is the attrition rate—because it signifies an important expense burden for companies. Any agent or representative that leaves the company incurs costs in terms of recruiting and training, and it happens frequently in this industry.” The flow of skilled workforce needed for the BPO industry should come from somewhere.

In order to train the required skilled labor force to keep the BPO industry prospering, many Colombian colleges and universities have started to offer specific courses. The demand for university courses in accounting, finances, economics, software engineering, and IT has been on the rise since the beginning of the BPO boom in Colombia, with an annual growth in enrollment of 6-13%. As such, universities are updating their offered courses and curricula to meet the demands of those students who want to land a job in the BPO sector after graduation.

Some undergraduate courses are even offered in English to prepare the students to work easily in a multinational setting where English is the main medium of communication. In addition, a large number of language schools have been opened up in Colombia where adults and younger people alike can learn English as a foreign language and improve their language skills. Prestigious language schools such as the British Council, Cambridge Instituto de Lenguas, and Centro Colombo Americano also have a strong presence in the country.

With the digital transformation which began in the mid-2010s and the distance-working culture that evolved after the COVID-19 pandemic, chances are that even more businesses in the US, Canada, and elsewhere will be willing to outsource some or most of their processes. On top of this, Colombia is well-placed to serve a large percentage of BPO clients due to its proximity to the US, its skilled and educated workforce, the high rate of bilingualism, and—above all—thanks to its mature BPO sector which has been formed over the last decade and now has a good understanding of customers and their needs.