Thought Leadership

Should You Consider Business Process Outsourcing to Mexico?

Not sure if business process outsourcing to Mexico is right for your organization? At DATAMARK, we have BPO facilities across the globe, including sites in the United States, Mexico, and India because we recognize that there isn’t a “right choice” when it comes to selecting the site of your outsourcing facilities, but more a matter of identifying the right choice for your organization.

On this page, we’ll go over some of the advantages and disadvantages of business process outsourcing to Mexico, often referred to as “nearshoring,” so it’s easier to see how making the switch fits with your organization’s objectives.

Advantages of Outsourcing to Mexico

Reduced labor costs. Reduced labor cost is one of the biggest advantages of business process outsourcing to Mexico. Labor in Mexico is a fraction of the cost of labor in the United States. That makes a huge difference in virtually every business process, but it’s especially pronounced in tasks like customer service, in which wages are the greatest expense involved.

Reduced operational costs. At present, utilities are 329% more expensive in the United States than in Mexico. Access to the Internet is roughly 140% more and rent is nearly 400% more in some cases. These things add up significantly.

Highly-educated and bilingual employee pool. With a headquarters in El Paso, TX, DATAMARK has a satellite location just over the border. This particular region has a fantastic pool of college-educated job seekers who often speak Spanish and English as if both are their mother tongues. Oftentimes, when organizations want to outsource for cost savings but are hesitant due to the language barriers of Asia, Mexico is more than ideal. However, one of the other advantages of outsourcing to Mexico for areas like contact centers is improved customer service. Spanish is one of the most spoken languages on the planet and is second in the United States, so companies that provide fast bilingual service are in a better position to meet the needs of their customers.

Proximity to the United States. Travel, shipping, and communication are all simpler thanks to Mexico’s close proximity to the United States.

Infrastructure. Things like utilities and technology can be questionable in other common outsourcing destinations, but Mexico’s infrastructure is solid.

Business-friendly government. Granted, there will always be challenges and negotiations between governments, but Mexico has historically been incredibly welcoming to foreign businesses, often offering favorable terms for those bringing jobs to their communities.

Disadvantages of Outsourcing to Mexico

Distance from your operations. Even though Mexico is still much closer than India or the Philippines, it’s not the United States, let alone your backyard… that is unless you’re operating from one of the border communities on the U.S. side. If your company wants to be able to drop in frequently or feels like more local oversight is needed, location is going to be one of the biggest disadvantages of outsourcing to Mexico. In these cases, you may want to explore onshore or on-site outsourcing options instead.

Labor practices. Much has changed in recent years, but Mexican labor practices aren’t quite on par with those in the United States or other developed nations. If you don’t partner with a BPO firm that genuinely cares about the team supporting your needs, there is some potential for poor working conditions and even strikes. However, this is not the case with DATAMARK. We make a point of creating a thriving workplace culture in all our facilities and ensuring everyone is receiving fair pay. This keeps the team happy, motivated, and engaged, plus reduces turnover significantly. With that in mind, labor practices may not be one of the disadvantages of outsourcing to Mexico for your organization, but it is essential to find out how well your BPO firm is taking care of the team.

Unforeseen costs. Things like taxes and exchange rates can add to costs if they aren’t taken into account ahead of time. To avoid this pitfall, be sure to partner with a BPO firm that has had successful nearshore operations for an extended period of time.

Take the Next Step

Is nearshoring right for your organization? Not sure? Our experienced team of business strategists can explore your key objectives and challenges to uncover the best outsourcing solutions for you. Contact us to discuss your options.

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