The Top 5 Countries for Outsourcing in Latin America

U.S. companies in search of outsourced labor in the same hemisphere have no shortage of options as they look south to Latin America.  The region represents a wide range of cultures and economies which offer plenty of opportunities for sourcing skilled workers.  Continued economic development in countries such as Chile helps provide stable infrastructure to support the growing outsourced labor market.

The broad diversity of Latin American economies makes it difficult to compare one country to another.  Accordingly, we’ve put together a ranking that combines the following factors: business environment, availability of skilled workers, and cost index.  Based on our analysis, here are the top 5 countries for outsourcing in Latin America:

#1: Chile

Chile is the Latin American nation with the most outstanding ratings across the board.  While its population of 18,000,000 places it only 65th globally on the United Nations list, the country’s growing economy and business-friendly environment helped it achieve a top-ten finish in the A.T. Kearney Global Services Location Index in 2016.  This was a consistent theme in our research: Chile’s pro-business outlook may be the best in Latin America.

Chile repeated this performance with strong rankings from StatisticBrain and Clutch.co, with a #13 and #11 worldwide placement respectively, further cementing its reputation for a strong business and economic environment.  If Chile had even better cost competitiveness and broader availability of skilled laborers, it would compete with mainstay Southeast Asian nations for an even higher ranking.

It’s not only about rankings in the indexes though: in 2009, Chile received an invitation to become a full member of the OECD (Organization for Economic Co-Operation and Development), which earned it the honor of being the first nation in Latin America with that distinction.  “[Chile is the] most politically stable country in the region,” wrote Tarun George at Nearshore Americas.  “It keeps strong financial institutions and sustainable economic policies as its focus.”

#2: Brazil

Brazil is a sleeping giant in the world of outsourcing, boasting Latin America’s largest economy and largest population (#5 in the world).  Fortune 500 companies, ranging from IBM and HP, have been leveraging Brazil’s skilled workforce for years, according to NearShoreAmerica.com.

Brazil’s rank of #4 on the A.T. Kearney index was somewhat dulled by its weaker performance on other lists, which is why we can’t place it higher than Chile.  At Clutch.co, the country’s lackluster cost competitiveness and its overall lack of workers with strong technical skills resulted in a rank of only #38, which is surprising given the overall potential of Brazil’s economy.

#3: Mexico

Given that Mexico is an adjacent neighbor in the US, it’s not surprising that outsourcing south of the border is relatively popular.  But is that due to proximity alone?  We found plenty of reasons to rank Mexico as one of the top countries for outsourcing in Latin America, including a #8 ranking at A.T. Kearney with strength in business environment with a rating of 1.61.  The overall performance of Mexico, however, seemed to push the company into the top ten in the world.

Mexico even outperformed Brazil on one index we looked at: Clutch.co, which suggests that there are some tremendous advantages to outsourcing to the country.  And with a top-10 population worldwide, there are plenty of labor opportunities to discover when businesses outsource to the nation.

#4: Argentina

Argentina, Chile’s neighbor to the east, is also a highly attractive nation for outsourcing.  According to NearShoreAmerica.com, Argentina performs particularly well with English proficiency, which means that it will make the entire experience of outsourcing easier for companies in the largely English-speaking United States.  How proficient is Argentina exactly?  They scored the highest in Latin America by EF Education First.

Argentina also performed well in rankings such as Clutch.co thanks to its high “cost competitiveness”.  It’s not only about the skills of the Argentine people, but the overall economic performance the nation brings to the table.  Argentina ranked 53rd in the International Monetary Fund’s 2017 GDP outlook, the second-highest in South America, which warrants a high inclusion on our list.

#5: Peru

When Excel SoftSources called Peru “the rising star of outsourcing in the Americas,” people noticed.  Citing a rising economy with strong growth in GDP for more than a decade-including the years 2000-2015-it was noted that Peru’s government was able to increase the funding available to universities throughout the course of a decade.  Maybe it’s not a surprise that Peru performed well on A.T. Kearney’s index, particularly due to solid financial attractiveness (a rating of 2.43).

But perhaps what makes Peru so intriguing is that it seems to be on the upswing.  Over the recent decades, Tholon’s Top 100 outsourcing rankings have steadily moved Peru up the list.

Clearfront HR is here to help you expand your business to South America or elsewhere across 130+ countries.  If you have any questions or are interested in learning more, contact us today.  We would love to learn more about your business and how we can help.