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Pros & cons of outsourcing to Latin America

Explore the benefits of outsourcing to Latin America. The region is dynamic and open for trade, but you need an experienced guide to fully succeed
Pros & Cons of Outsourcing to Latin America

Many businesses are considering outsourcing to Latin America for some of their most critical tasks. These countries have taken huge steps forward in recent years to be on a competitive level with other outsourcing powerhouses such as Russia, China, and India.

Is Latin America a good fit for your organization? Let’s take a look at some of the pros and cons of outsourcing to Latin America. Global hiring improves diversity naturally, providing many benefits to especially smaller organisations such as startups.

Serviap Global can help with your global expansion needs. Contact us today to learn how you can build your business with PEO in South America and Latin America.

Pros of outsourcing to Latin America

There are many advantages to outsourcing to Latin America:

Language familiarity

English is spoken by university graduates in almost all Latin American countries. The governments in many Latin American countries have also made teaching English to children at a young age a priority. That has translated into higher rates of English speakers in these countries.

In addition to fluency in the language, many Latin American countries have a similar business culture to Western nations. This makes it easier for their residents to do business internationally, especially compared to countries like India and China which have a greater cultural divide.

Proximity to the USA

For U.S.-based businesses especially, outsourcing to Latin America is close by. Shipping and travel between the two sites is relatively simple compared to other outsourcing hubs on the other side of the world. If you need to visit the site of your outsourcing services, you can jump on a flight that could be just as long, or even shorter, than a trip from one U.S. coast to the other.

Plus, most Latin American countries are located in the same time zones as the U.S. This means that business can be conducted during normal business hours without an issue. As the advantages of nearshoring become more attractive, more businesses are being drawn in to the region.

Large, skilled labor pool

Latin American countries are investing heavily in education. They have spent millions of dollars over the last few years to enhance their educational programs in high-tech fields such as engineering and IT. Many skilled workers can be found in the region with graduate degrees and certifications in high demand fields—and these workers can be hired relatively economically.

Infrastructure

Many Latin American countries have solid IT infrastructures that provide broadband internet access to much of their population. This is extremely important, as IT reliability is a huge key to success when outsourcing to Latin America. The expanded infrastructure provides uninterrupted communication access as well as opportunities for people to learn and businesses to thrive.

Entrepreneurship

There are many impressive Latin American entrepreneurs creating new companies and finding fertile new ground for business. The startup community here is thriving, often with the support of local government initiatives to encourage outsourcing to Latin America.

You can benefit from this huge pool of talent that’s being developed in Latin America. When these startup businesses begin to thrive, other businesses pop up in and around them to support them, making it an even more attractive place to do business.

Cons of outsourcing to Latin America

There are still some challenges when outsourcing to Latin America. Here are some of the main drawbacks to consider:

Cost compared to India & China

You will certainly see a major cost reduction when outsourcing to Latin America compared to the U.S., but you may not see the same level of savings as compared to China and India. The many advantages of doing business in Latin America noted above often outweigh the minor cost-savings you’d get by outsourcing to Asia.

Business regulations

While it’s pretty easy to do business in most Latin American countries, there are still new tax and business rules and compliance you’ll have to figure out. If you don’t do exactly what the local government requires you to do, you could face huge fines or even a ban on doing business in the country.

So, if you plan on outsourcing to Latin America, you’ll have to make sure you do the proper research into what it takes first—or work with an experienced partner like Serviap Global who can handle these tasks on your behalf.

What country is investing heavily in Latin America?

China is one country that has been investing heavily in Latin America in recent years. China’s investment in the region has been driven by several factors, including its desire to secure access to the region’s natural resources and its efforts to expand its economic and political influence globally.

China has invested in several sectors in Latin America, including infrastructure, energy, mining, and agriculture. For example, China has invested in the construction of ports, highways, and railways in various countries in the region, such as Brazil, Peru, and Chile to facilitate the import and export of goods. It has also invested in the development of renewable energy projects, such as wind and solar farms, in countries such as Mexico and Brazil.

Additionally, China has also established trade agreements with many countries in Latin America, which has facilitated a significant increase in trade between China and the region. This has led to an increase in Chinese imports of raw materials, such as oil and minerals, as well as exports of manufactured goods to the region.

Serviap Global can help you in outsourcing to Latin America

When you’re making the choice as to whether outsourcing to Latin America is a good decision for you, in many cases, you’ll find that the pros far outweigh the cons.

Serviap Global is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere.

PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization.

Contact us today to learn more about how you can expand your business in South America and Latin America.

An EOR can help you with outsourcing to Latin America

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