Nearshore Americas

Growing Pains: Costa Rica’s Changing Contact Center Landscape

Costa Rica’s call center industry has been shaken by a series of closures in recent months, prompting the question of whether it is downsizing or undergoing a restructuring to become more sophisticated.

In May, Amway closed its call center in Costa Rica, leaving 200 people unemployed, and which followed the closure of centers operated by Amoena and Sykes, and which put a combined 300 employees out of work.

In addition, Van Ru International announced the closure of its call center in the country in late May, causing 130 job losses, according to Radio Monumental.

But the government is showing no signs of concern, attributing the closures to normal business evolution, as companies respond to market shifts, and instead hailing the creation of up to 1,000 highly skilled jobs.

“Every year, some companies leave or close part of their operations, and eventually others close,” the country’s foreign trade minister, Dyalá Jiménez, said at a press conference on May 31.

“Global trade and the service sector are very dynamic, particularly because it is very easy to leave and set up in other countries, which is something that has happened in recent years and will continue to happen.”

Dyalá Jiménez, Costa Rica’s foreign trade minister

“We must not panic,” she said.

However, with unemployment at more than 11%, an increase in that rate should worry many in the country, and has raised expectations of more words from the government regarding the situation.

But there is good news, too.

This month, global business services company Concentrix, which specializes in customer engagement, announced it would create 600 jobs in Costa Rica as part of its growth strategy in the country, aiming to establish itself as a specialty, high-value solutions provider.

And likewise, Wind River, which delivers software to critical infrastructure, announced it has expanded its global presence by setting up shop in Costa Rica, while NTT Data has opened a center of excellence in the country to serve its salesforce portfolio, with plans to hire 100 specialized personnel such as experienced systems engineers.

Evolve or die

Such developments point to the evolution of the Costa Rican services market rather than a downsizing, as companies adopt a more sophisticated model that will require personnel with a more developed skillset.

“Costa Rica has evolved from transactional functions to multifunctional, sophisticated processes including financial analysis, regional centers, software development and IT, and engineering and design, among many other business opportunities;” according to Costa Rica’s Investment Promotion Agency (CINDE).

“Today, Costa Rica provides a mature environment for complex business processes and stands as the number one exporter of high-value-added services in Latin America, surpassing Chile, Brazil, Argentina and Peru,” it adds.

According to Jeff Pappas, executive VP of site selection and brokerage at ESRP Real Estate Services, which assists CRM and BPO firms in establishing shared service/call center operations globally, Costa Rica has been the leading country in the region for call centers due to its inhabitants’ good command of the English language, its proximity to the US, and its time-zone alignment with North America.

As Costa Rica consolidated as a call center service provider, the salaries of English-speaking customer support employees have increased, making the country more expensive than neighboring countries such as Nicaragua, Honduras or El Salvador for level 1 or 2 support, and which now have a better cost-to-value ratio, and which has resulted in the decision to close call centers in the country.

Jeff Pappas, executive VP of site selection and brokerage at ESRP Real Estate Services

In addition, contracts signed five years ago or more are beginning to expire and the other countries in the region are emerging as more attractive destinations to start new operations, Pappas said.

New business opportunities

However, for level 2 or 3 support onwards, Costa Rica is still a great option and has the necessary human resources, and which creates new business opportunities, requiring personnel with better skills, he added.

Companies such as Amazon, McKinsey, Prodigius, Cargill and Accenture are bringing their design operations to Costa Rica, adding to their customer and corporate services activities, according to Carlos Cordero, a tech analyst and columnist based in the country.

Many companies are introducing automation and digitization processes, using artificial intelligence and robotic process automation (RPA), and the staff performing those tasks are now engaged in more analysis and problem solving with customers or suppliers, having been freed up from tasks that have become automated, he said.

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“There has been a change in the type of operations being undertaken by foreign companies in Costa Rica, as they move from manufacturing and medical sciences to higher value-added services, with research and development centers, as in the case of Intel,” he added.

“Growth in RPA in Costa Rica will prove a game changer,” Raul Vega, president and CEO at US-based IT outsourcing and consultancy company Auxis, told Nearshore Americas in May.

At the same time, amid rising costs, companies are shifting their most cost-sensitive operations to other Central American countries such as El Salvador, and, in Costa Rica, are concentrating on the highest levels of customer service, as well as development centers and other activities that require personnel with better skills, according to Juan Miguel Tirado, marketing director of fintech company Gosocket.

“In the end it is a matter of companies being willing to pay for a superior quality of service in order to serve key areas of their business,” he said.

Alcides León

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