Why Mexico Is the Perfect Nearshore Business Process Outsourcing Destination: A Guide

Mexican virtual assistants (VAs) are in high demand by U.S. businesses for their bilingual fluency, efficiency, and affordability. Mexico's proximity to the U.S. and competitive rates make it an ideal BPO destination. Read on to understand why Mexico excels in outsourcing.
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Virtual assistants (VAs) in Mexico are in high demand among U.S. businesses due to the perks and services they provide. They are efficient workers who speak Spanish and English fluently. They also charge more affordable rates than their American counterparts. 

Mexican VAs are among the many third-party professionals that comprise the nation’s outsourcing industry. Mexico is the outsourcing hub closest to the U.S. This proximity is its foremost advantage over competitors in Asia and Eastern Europe.

This article explains why Mexico is an ideal nearshore business process outsourcing (BPO) destination. Continue reading to learn why.

Reasons to Engage in Nearshore Business Process Outsourcing in Mexico 

Reasons to Engage in Nearshore Business Process Outsourcing in Mexico

The question of the hour is: What is the business process outsourcing model to use to achieve your goals? 

The answer depends on your location, among other factors. If you operate in the U.S., nearshoring can be one of the best BPO models to adopt. In particular, southern states such as California, New Mexico, and Texas should consider outsourcing to Mexico as their top choice.

The following reasons explain why Mexico is an ideal nearshore business process outsourcing hub.

Near the U.S. for Time Zone Alignment and Better Collaboration

For the most part, Mexico shares the same standard time as the U.S., with some American states varying by only three hours. Nearshore service providers can thus offer clients the convenience of minimal time zone differences.

Let us use an example to illustrate. Mexico is ahead of Arizona by one hour. However, you and the nearshore team must have nearly identical work hours for effective collaboration. Your in-house team in Arizona likely begins work at 8 a.m. and finishes at 5 p.m. In that case, the third-party Mexican team should start work at 9 a.m. and finish at 6 p.m. to match your hours.

Here are some benefits of working in similar time zones:

  • More convenient meetings. Mexico is an excellent nearshore business process outsourcing center because you and the third-party team can easily schedule appointments.
  • Smoother communication and coordination. With almost identical time zones, outsourcing to Mexico allows for greater collaboration and interaction with the third-party team. It also enables more efficient processes and quicker responses to customer concerns.

Regional Connections for Improved Customer Relations

Mexico’s close cultural affinity with the U.S. is why it is the preferred nearshore business process outsourcing hub for many American companies. Numerous Mexicans have migrated to the U.S. A recent study shows that 37.2 million U.S. Hispanics (almost 62% of the Latino population) are of Mexican ancestry. 

Compare the cultural similarities between the two nations:

  • Government system. Mexico and the U.S. have federal and presidential systems. These countries are divided into states with separate governors and legislatures. The constitution is their highest law. 
  • History. Each nation celebrates its liberation from European rule. Mexico observes its Independence Day every September 16th, while the U.S. celebrates its freedom every July 4th. 
  • Food. Mexicans introduced popular dishes to Americans, such as quesadillas, burritos, and tacos. They also enjoy American-made foods (e.g., burgers, fries, and hot dogs). 

With these shared cultural traits, third-party Mexican teams can confidently and easily communicate with Americans to build customer rapport faster. This ability gives Mexico an advantage in back-office and technical support outsourcing over their offshoring competitors.

Large Talent Reserve to Provide First-rate Outsourced Services

Mexico’s large and skilled workforce is why the country has become a favorite nearshore business process outsourcing site. Its labor force primarily comprises engineering and information technology (IT) experts. About half a million college graduates join the labor market annually. 

The nation has qualified, young, flexible workers accustomed to American standards and procedures. Their skill sets enable them to accomplish tasks effectively and autonomously. 

Mexico is quickly growing into an innovation powerhouse and a popular outsourcing location for companies in the U.S. According to recent research by the National Institute of Statistics and Geography (INEGI), Mexico’s technology workforce is expanding three times faster than the worldwide average.

BPO providers with operations in Mexico can supply third-party professionals with adequate educational backgrounds, technical and communication skills, and professional experience. They also offer various back-office outsourcing services, such as: 

  • Administrative support
  • Bookkeeping and accounting
  • Healthcare 
  • IT support
  • Data entry 
  • Email and chat
  • Virtual assistance 
  • Help desk
  • Customer service

Diminished Operating Expenses for Better Cash Flow 

Nearshore business process outsourcing is among the examples of BPO strategies that can be used to reduce operating costs.  

Consider the cost-saving perk of delegating processes to a service provider in Mexico:

  • Recruitment. You can avoid costly hiring processes with nearshore outsourcing. The BPO partner oversees all hiring operations to employ the best people. Job ads and candidate screening functions such as testing, onboarding, and training are examples of these activities.
  • Salaries. Mexico is a highly favored nearshore business process outsourcing location because it allows you to reduce salary expenses significantly. Unlike outsourcing, managing in-house personnel involves paying them regularly. You must also shoulder non-monetary costs such as medical coverage, social security, and income taxes.
  • Physical and digital assets.  Decreased capital or investment expenditure motivates outsourcing to Mexico. Transferring supplementary activities to a nearshore provider means you no longer need to invest in new equipment, facilities, or IT systems. Your BPO partner takes care of all these resources. 

Outsourcing-friendly Government Regulations for Sustainable Operations

Mexico is an excellent nearshore business process outsourcing destination because of its favorable industry laws. 

The Mexican government has launched the following efforts, programs, and collaborations to bolster the BPO industry and other essential sectors:

  • U.S.-Mexico Cybersecurity Cooperation. The U.S. and Mexican governments prioritize cybersecurity to safeguard shared supply chains and critical resources, aiming to thwart online attacks and intrusions in Mexico. 
  • Internet para Todos program. This initiative harnesses cutting-edge digital technologies, including wireless broadband, fiber optics, satellites, and hybrid solutions. It aims to provide the BPO industry and other sectors with faster connectivity.
  • North American Free Trade Agreement (NAFTA). Mexico has a strong partnership with more advanced neighboring nations through NAFTA. The 1994 agreement formed a Mexico-Canada-U.S. free trade zone, boosting foreign investments in the domestic economy and outsourcing industry. 
  • 2021 amendments to Mexican Labor Law. The law introduces pro-employee policies to improve performance and productivity in outsourcing. It mandates year-end bonuses and profit-sharing plans for BPO workers.

High English Proficiency for a Clear Understanding of Customer Concerns

Among the reasons Mexico can be the right nearshore business process outsourcing choice for you is its workers’ commendable English proficiency. English is the nation’s most widely spoken non-native language. Nearly 13 million Mexicans use the language, with highly skilled speakers in Guadalajara, Jalisco, Nuevo León, and Querétaro.

Strong English skills simplify communication with Mexican professionals. They grasp Western clients’ requests, concerns, and questions, leading to more precise task explanations and improved problem-solving.

Numerous third-party Mexican workers converse proficiently in formal and informal English with nearly neutral accents. Nevertheless, their English remains highly understandable compared to other language variants. They have a firmer grasp of American expressions, phrases, and grammar due to their proximity and deep history with the U.S. 

Mexican professionals are Spanish speakers. BPO providers can also supply bilingual professionals to enhance customer relations, meeting your needs for Spanish-speaking staff to support operations.

Inexpensive and Productive Workers for Better Revenue

Mexico can be a highly suitable nearshore business process outsourcing destination because its professionals have comparable communication skills, technical competencies, and education to U.S. workers. However, their salaries are much lower. 

Salary Explorer data shows that the average basic salary of a regular customer service and call center agent in Mexico is MXN 24,000, or just above $1,400 monthly. An agent in the U.S. can cost around $5,700 monthly.

Based on these amounts, you can save $4,300 ($5,700 minus $1,400) when hiring a Mexican third-party agent. The big salary gap enables you to run your business cost-effectively, making nearshore business process outsourcing to Mexico more ideal. 

Mexico’s inexpensive labor costs can be attributed to its reasonable cost of living. The cost of living in Mexico is 45.7% lower than in the U.S. Thus, a monthly budget ranging from $600 to $2,000 is sufficient.

Growing BPO Industry for Long-term Business Sustainability 

Mexico is one of the world’s primary nearshore business process outsourcing destinations. The BPO industry emerged during the 1990s, establishing telemarketing firms in Mexico City and other major urban centers. 

Call center services comprise over 70% of the industry’s outsourcing activities. Virtual assistance, consulting, and other back-office operations account for the remaining 30%. BPO operations have risen rapidly in recent years and contribute significantly to Mexico’s economy. This expansion will continue in the future.

Mexico’s call center operations (inbound and outbound call services) are spread across the country in areas such as:

  • Mexico City is a significant call center hub with a diverse workforce and top-notch infrastructure.
  • Guadalajara has a well-educated workforce and is known for its technological infrastructure.
  • Monterrey has a growing BPO sector, benefiting from its proximity to the U.S. 
  • Tijuana offers bilingual talent and easy access to the U.S. market.
  • Puebla is central Mexico’s call center hub, offering a lower cost of living. 
  • Merida is known for its Spanish-speaking workforce.

Suitable Solution for the Ongoing Talent Crisis in the U.S. 

At the height of the “Big Quit” or “Great Resignation” period, over 71 million American workers willingly resigned from April 2021 to April 2022. 

Below are the reasons why Americans voluntarily left their employment:

  • Inadequate salaries. American workers need higher wages to pay for their needs. The cost of living where they live has risen as essential products and services continue to grow more expensive. Their salary increases are still insufficient to cover rising prices.
  • Global pandemic. The COVID-19 pandemic is the leading cause of the Great Resignation. Most economies, including the U.S., experienced regular lockdowns and social distancing rules. As a result, many Americans prioritized their personal lives over their careers, opting for remote work to continue earning income.

Leveraging nearshore business process outsourcing in Mexico can help ease the workforce death besetting the U.S. Mexican BPO providers can recruit and retain required personnel for American businesses.

The Bottom Line

The Bottom Line - nearshore business process outsourcing

How do you know which strategy is best for you—nearshoring versus offshoring? If you already know about offshoring, this might also be among your questions before outsourcing. 

Your business demands and objectives influence your choice of BPO models. Each has its benefits and drawbacks. Base your decision on your company’s strategic goals, financial considerations, required control level, and proximity to the outsourcing partner.

You can even partner with a BPO provider offering nearshore and offshore outsourcing, such as Unity Communication. 

Let’s connect if you want to learn more about why Mexico is one of the best nearshore business process outsourcing destinations!

Picture of Rene Mallari
Rene Mallari considers himself a multipurpose writer who easily switches from one writing style to another. He specializes in content writing, news writing, and copywriting. Before joining Unity Communications, he contributed articles to online and print publications covering business, technology, personalities, pop culture, and general interests. He has a business degree in applied economics and had a brief stint in customer service. As a call center representative (CSR), he enjoyed chatting with callers about sports, music, and movies while helping them with their billing concerns. Rene follows Jesus Christ and strives daily to live for God.
Picture of Rene Mallari

Rene Mallari

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