Colombia, the ideal offshoring destination to propel your business
According to a study conducted by the Tholons firm as contracted by the Inter-American Development Bank (IDB), “Colombia is the hidden jewel of outsourcing in Latin America”. The investigation describes Colombia as an attractive nation for companies that contemplate the internationalization of services, an industry that has grown more than 60% in the last four years.
Not only does IDB see great value in Colombia but furthermore Gartner, an American technological research and consulting firm company, highly recognized within the economic and technological advancement space, stated in their investigation that Colombia is among the 30 world leaders in offshoring services.
The success in Colombia for the outsourcing of services is concentrated in 10 fundamental points: language, educational system, workforce, infrastructure, cost reduction, cultural compatibility, global and legal maturity, intellectual property, the political and economic environment, and government support.
This statement plants the seed to embrace Colombia as an offshoring services provider gold mine that has the doors open for eager-to-grow companies around the world.
Initially, Colombia’s offshoring offer started to show its potential 17 years ago with the voice companies, a service with which today it continues to be positioned as the best in the region.
But from call centers and contact centers or basic voice services, the industry is already moving to much more sophisticated areas such as Information Technology Offshoring (ITO), Business Process Offshoring (BPO) and Offshoring in Knowledge Processes (KPO). Today, these industries generate around 120 thousand jobs, proving the huge human capital that Colombia has to offer.
But why is offshoring to Colombia an excellent strategy to gain essential support for your business?
Colombia’s economy is among the strongest in South America
Colombia’s stable economic conditions make the country a desirable site for U.S. businesses looking to outsource near home. Even while recovering from the impacts of the pandemic, Colombia’s economy is projected to grow 3.1% in 2023.
The primary factor driving the positive trajectory is the country’s robust technological ecosystem. Colombia’s networks and infrastructure meet the new standards, enabling its economy to thrive amid pandemic restrictions. As the world enters the next phase of the digital era, leveraging the country’s innovative leadership will help accelerate business expansion goals.
The Silicon Valley of Latin America
- With 11 operational submarine communications cables, Colombia is the second country with the highest number of cables in the region.
- Colombia has one of the largest technically skilled populations in Latin America, producing about 13,000 tech graduates yearly.
- As of the end of 2020, Colombia has 38 million broadband internet connections.
Laws and foreign regulatory policies also play a significant role in maintaining Colombia’s competitive business climate. The Colombian government has made the country a fertile international trading ground, from ensuring liberalized trade measures to providing fair tax incentives. The World Bank even recognized the country as “the most investment-friendly destination in Latin America” in the Doing Business report.
Close Location and Similar Time zone
If you are considering outsourcing but are wary of the vast time difference, offshoring to Colombia is a great alternative. The country shares the same time zones as the U.S. thus making remote communication and collaboration that much easier.
This makes attending in-person meetings more convenient and affordable. Anyone who has been on an overnight flight or has experienced the consequences of jet lag, would appreciate the proximity of Colombia to the U.S. If you need to attend a meeting in person, you can easily hop on a direct flight to visit your offshore team.
A multilingual workforce
Although Spanish remains the most widely spoken language in Colombia, the country is a multicultural nation. The government invests heavily in preserving its diverse native languages and developing Colombians’ multilingual skills. Colombian policymakers have designed and backed such policies for more than four decades.
Foreign languages, especially English, are taught to students starting in elementary school and working their way up. These initiatives help strengthen the country’s workforce’s multi-language proficiency and prepare them for the future global workplace. Take a look at the following statistics from the BPO Confidence Index
- Well over 52 million people speak Spanish in the U.S. alone.
- Analysts predict that 1 in 3 people in the U.S. will speak Spanish by 2050—the same year Colombia aims to be fully bilingual.
- The demand for bilingual workers has increased by 30% since COVID.
Offshoring to Colombia enables you to facilitate a smoother cross-border collaboration within your company. More importantly, it allows your brand to cater to diverse customers across the globe or within the US.
Colombia has the third-largest labor force in Latin America
An offshore office in Colombia is shaping to be another strategic option to counter the talent shortage hounding U.S. businesses. With over 51 million inhabitants, the country has the third-highest population in the region as of 2022, as said by Trading Economics in its report: Colombia—Labor Force.
Colombia also boasts about it’s strong labor participation rate of 59.80%. About 500,000 members of the country’s workforce belong to the BPO sector. Analysts foresee the country’s workforce participation rate improving further to 62.50% in 2023 and 63.00% in 2024.
However, according to the Bureau of Labor Statistics, in the U.S., both population growth and labor participation are on a downward trend. The country’s birth rate fell to its lowest at 4% in 2020. Moreover, as of January 2022, the U.S. employment-population ratio remains at the pre-pandemic level of 59.7%.
Offshoring there will allow access to a more significant workforce population and expand your talent pipeline.
Colombia has strong cultural and economic ties to the U.S
Colombia and the U.S. share a solid diplomatic relationship that dates back to 1822. The countries also enjoy long-standing bilateral economic relations that deepen their social and cultural ties. Along with Colombia’s geographic proximity to the U.S., these factors contribute to Colombians’ profound understanding of American customers’ habits and behaviors.
The two countries also share similar business cultures. Practices that are unacceptable to some such as being direct and straightforward, are generally accepted by both cultures in contrast to other cultural mismatches. These dynamics make it easier for both parties to implement and promote the other values and behavioral norms.
Colombia offers cost-competitive offshoring solutions
The cost of living in Colombia is 71% less expensive than in the U.S. For this reason, many expatriates choose to settle in Colombia. It is also why many American companies tap into Colombian providers for different types of offshoring solutions. From office space rentals to labor, expenses the difference is huge, as we can see from a comparison between the information gathered by the National Administrative Department Of Statistics (Colombia), and the data delivered by the Bureau of Labor Statistics (United States).
Average annual salary, 2022
|$14,425 USD||$54,132 USD|
Sales representative average annual salary, 2022
|$4,400 USD||$36,920 USD|
Software engineer average annual salary, 2022
|$16,600 USD||$107,000 USD|
Offshoring is inherently more cost-competitive than outsourcing within the U.S. With prices of nearly everything rising at faster rates than ever seen before in the country, it’s time to consider embracing the economic advantage of offshoring.
Nearshore with Sworkz
Sworkz is a forward-thinking company specialized in a broad range of business and knowledge processes encompassed in offshoring services. With our head office in Medellín, Colombia, one of the most beautiful and culturally diverse, and rich cities of the country, we partner with businesses and their leaders, to help them prepare and overcome growth challenges by providing new recruitment and team management strategies through their own remote team.