Call Center Magazine  

Sep-05-2002

Locating Call Centers Closer to Home

The best location for your call center may be next door:  in Canada, the Caribbean and Latin America.  We detail why, and where to set up.

by Brendan B. Read

09/05/2002; 12:45 am ET

In recent years site selectors, consultants, outsourcers and economic development agencies have been touting India and the Philippines as low-cost and high-labor-availability alternatives to the US, UK and Canada.

But the terrible events of last year have made many companies leery about locating to India (which has had military clashes with nuclear-armed Pakistan); and to the Philippines, where terrorists allegedly linked to Al-Qaida kidnapped and murdered Americans.

There is also growing concern about dialect and quality from offshore locations that risk turning off customers.

Site selection experts report that American call centers are taking a new look at near-shore locations that promise lower costs than the US, good service, faster and more convenient access and fewer security risks. These locations include Canada, the Caribbean (Jamaica, Barbados, St. Lucia, and Trinidad and Tobago); and Latin America.

Many of these countries, notably Canada, Mexico and Chile, also have strong domestic economies and provide markets for American goods and services that need call centers to support and sell to them.

But site selectors are weighing the near-shore locations' benefits against their higher costs, fewer qualified workers, and poorer education levels compared with offshore locations.

King White, vice president of Trammell Crow Call Center Services (Dallas, TX), says many outsourcers are still going offshore. But the leading players and Fortune 500 in-house operations are looking at near-shore as backups.

"That attests to a corporate caution about going and outsourcing offshore," says White. "But there is also a growing resistance to send inbound calls to India due to dialect and quality control."

The Near-Shore Advantage

Geography, and ease and safety of travel, have always been an important benefit to near-shore locations.

Flights to Canadian, Caribbean or Central American cities require two to four hours, versus 18 to 20 hours for a transpacific flight. There are many and often direct flights from several US cities to these near-shore communities. Some Canadian locations are an easy drive, train or fast-ferry ride from US metro areas.

But the post-9/11 security and travel issues give a more important benefit to locating call centers near-shore. John Boyd, site selection consultant with The Boyd Company (Princeton, NJ), says additional security checks and security breaches increase air travel time and hassles.

Canada and the Caribbean are politically stable. In the wake of 9/11, the US Administration has sought and obtained cooperation from Canada and Mexico to prevent infiltration by terrorists. The US regards near-shore nations (especially Canada) under its security umbrella.

Some of the Central and South American countries that were wracked 10 to 20 years ago by political turmoil, Chile, El Salvador and Panama, have stabilized and are actively seeking foreign investments.

But observers note that, given the current political climate, even the minor issues of near-shore locations, like the comparatively benign specter of Quebec separatism, have gained significance.

"The [mere] mention of separatism is all that it takes to drop a place like Quebec from consideration," says Brian French, managing director of NAI TeleCenter Services (Mississauga, Ontario). He adds that Quebec, despite aggressive marketing and generous incentives, is underrepresented in call center workstations for its population compared with the rest of Canada.

Near-shore locations offer workers at wages lower than the US' though not as low as India's. According to Trammell Crow, typical hourly wages in US dollars are $2.50-$3 in Jamaica and $5-$7 in Canada compared to $7.50-$14 in the US. In contrast, India's typical hourly wages in US dollars are just $1-$2.

But many call centers may receive better value for the higher pay. Canada and Caribbean countries, say observers, offer a superior customer service culture and a greater cultural affinity to Americans. Many parts of Canada and the Caribbean depend on tourism, mostly from Americans.

As regards to cost, education, living standards, infrastructure, stability and call center sophistication, Canada is most like the US; the Caribbean is most like India and the Philippines.

But Alton Martin, president of Customer Operations Performance Center (COPC; Amherst, NY; www.copc.com), a performance standards, testing and consulting firm, says that comparatively few Caribbean workers have college educations. The Philippines and India, by contrast, boast 100% college-educated agent teams.

Site selectors say the Caribbean countries are suitable for low-end call centers such as airline reservations, credit card sales, collections and order taking. The Caribbean's low wages and loyal workforces offer a compelling economic case to call centers in these spaces. In the US, these centers tend to experience high agent turnover.

But, say market watchers, the tradeoffs are power facilities, telecom networks and offices that are more expensive, or built to inferior standards, than those in the US.

Trinidad and Tobago has a large ethnic Indian population, with many of the same cultural traits as Indians, including poor empathy with customers, add observers. As it lies just off the coast of Venezuela, the nation also has many Spanish speakers, enabling a call center to serve Latin American countries.

"Trinidad and Tobago agents have good sales skills, [but] less empathy with customers than those in the other parts of the Caribbean," says Philip Cohen, a teleservices consultant based in Skelleftea, Sweden. "The country now has a critical mass of call center expertise, with nine call centers operating in 2001."

Canada's Unique Locations Play

Canada supports the same range of call centers as the US: basic inbound and outbound; high-end multimedia voice; on-line financial services; and tech support. That's a greater spread than offered by other near-shore and offshore locations.

Canada also has a large multilingual population, centered chiefly in cities such as Montreal, Toronto, and Vancouver. Canada can therefore serve customers in most parts of the world, unlike the Caribbean, India and the Philippines.

But Canada also offers lower business costs than the US with more available labor.

NAI's French reports that only 1.5% of Canada's labor force works in call centers, which is half the 3% level site selectors claim will saturate a community for call centers. He reviewed a study that indicates that 5% of the US labor pool is working in call centers.

Canada's unemployment rate continues to be higher than the American rate: 7.5% compared to 5.9%. But the US jobless totals are higher because the US has nearly ten times the population of Canada.

Being next door to the US, and drenched in US media, Canadians know more about Americans than the residents of any other country.

"Canada is more of an option for quality call centers," Boyd points out. "They have a much more highly educated population and advanced low-cost telecom networks, clear accent, and a strong history of successful call centers."

Not surprisingly, Canada remains a leading alternative location for American firms to serve the US and the Canadian market.

According to Steve Demmings, president of Site Selection Canada (Winnipeg, Manitoba), new and expanded American call centers created 80% of 12,500-plus Canadian call center jobs in the first half of 2002.

But COPC's Martin questions how long Canada will keep its cost advantage over the US. Canada's costs are no different from low-cost US locations once the exchange rate is discounted. (The Canadian dollar has been climbing in value relative to the US dollar. Currently, the rate stands at $0.64 US to $1 CDN, but it has been higher.)

"Canada is an exchange rate play that depends on how wide the range is," says Martin. "The labor cost savings in India, the Philippines and Caribbean countries like Jamaica are real [and not dependent on exchange rate differences]."

But arguably so are economic differences between Canada and the US that have kept an exchange rate spread for several years.

Boyd calculates that the Canadian dollar will remain competitive at 75 cents to 90 cents: the low end for basic call handling, the high end for tech support and other high-value calls; and 80 cents for outsourcers.

"The Canadian dollar's rise hasn't stopped call centers from locating there," he says. "And it doesn't minimize Canada's labor availability and quality."

Another issue with Canada is the limited supply of real estate suitable for call centers, especially in small cities where there is high unemployment. There are few suburban locations that call centers, especially outsourcers, prefer.

The glut of large empty storefronts resulting from the closure of Eaton's chain and mergers of hardware chains has largely disappeared. New buildings are difficult to come by (but not impossible) because call centers typically lease for no more than five to seven years; landlords and financiers need double that to break even on construction costs.

Demmings does not think property is an issue for American companies considering downtown locations.

He points out that Canadians are more willing to work downtown. He says 80% to 90% of Winnipeg, Manitoba's 12,000 call center jobs are downtown.

"Many American decision-makers have preconceived notions about Canada," Demmings says. "They believe that we have the same crime-ridden unattractive downtowns and poor mass transit, like in many of their cities. And they think our voice/data infrastructure is poor. But that's not the case. Canada has vibrant downtowns, good transit and people willing to work downtown. And the infrastructure is excellent."

The Latin American Alternative

New near-shore locations are the predominantly Spanish-speaking countries, such as the Dominican Republic, El Salvador, Mexico, Panama, and Puerto Rico, a US Commonwealth.

Proponents claim that call centers in their countries can support American customers for 25% to 65% less than American border communities can. Call centers locating there can tap English speakers.

But the big opportunity is to leverage these countries' and Puerto Rico's Spanish speakers to serve the US' large and growing Hispanic population.

The six largest and most prosperous Spanish-speaking countries in the region - Argentina, Chile, Colombia, Mexico, Uruguay and Venezuela - collectively have over 228 million residents.

According to the US Census Bureau (www.census.gov), more than 35 million Americans in 2000 were Hispanic, up 57.9% from 22.4 million in 1990. The total US population only grew by 13.2%.

Mexico, which has 102 million people and is a member of NAFTA, is clearly the Latin American near-shore locations heavyweight. Like Canada, many Mexican locations are easily accessible from the US by car.

Smaller Latin American nations may appeal to call centers. The economy of the Dominican Republic, a stable country with 8 million people, has changed from agriculture to services, including telecommunications and energy. Many companies occupy free-trade zones. At least one outsourcer targeting the US market, Infotel, is successfully operating there.

El Salvador, with 6.4 million people, markets a high (95%) literacy rate among urbanites. The capital, San Salvador, has nearly one-third of the country's population and a neutral Spanish accent.

Panama, with 2.9 million people, offers excellent telecom infrastructure, available office space, plus excellent schools and a strong banking sector. Panama's biggest asset is its bilingualism, aided by English-language instruction in schools. The country also sports US cable TV availability - legacies of US possession of the Canal Zone that ended in 1999.

SITEL (Baltimore, MD; www.sitel.com) opened a call center in Panama in January 2002. It also has centers in Colombia and Mexico.

"Panama is a great location for English and Spanish calls from the US," says Dale Saville, SITEL's executive vice president. "It offers very competitive pricing and an excellent English-speaking workforce. It's also a prime location for a regional call center to [service] calls for all of Central America."

Puerto Rico, with 3.9 million residents and a 12% jobless rate, is aggressively seeking bilingual call centers. Similar to Canada's pitch, the nation's backers argue that it has slightly lower costs than the US. But, as an American possession, the island enjoys access and security benefits.

"That Puerto Rico is part of the US is a major contributing factor in companies considering it since 9/11," says Boyd.

Puerto Rico's minimum wage is the same as in the US: $5.15/hour. That's more than Mexico's $3.50/hour, but less than the reported $7/hour in US border towns, such as Laredo, TX.

Proponents say that more agents are willing to work at levels closer to the minimum in Puerto Rico - $6 per hour for customer service agents - than in the rest of the US. Puerto Ricans do not pay income tax; so they keep more of their earnings.

"The traditional destinations of call centers serving US Hispanic speakers - Arizona, South Florida and Texas - are suffering from inflationary wage pressures," Boyd points out. "Puerto Rico has abundant, affordable, high-quality labor."

Language Skills

How acceptable is the English and Spanish to customers from these near-shore locations?

Are there sufficient numbers of top-quality English- and Spanish-speaking agents at affordable wages? And how strong is the cultural affinity between them and Americans?

SITEL's Saville says that Monterrey, Mexico, which is 150 miles from the US border, has sufficiently bilingual workers. But parts of Mexico further from the border may not.

"With the exception of border areas, Mexico's agents lack sufficient English fluency for our clients who ask for it," he says.

There are also questions about the quality of English spoken in Puerto Rico.

"The English spoken in Puerto Rico is more understandable than in India because the Puerto Ricans know American idioms," says Engel. "But it is not good enough. I would only recommend Puerto Rico to American firms with predominantly Spanish-speaking customers."

And what about Puerto Rican Spanish? Spanish speakers say the delivery is fast-paced, like Cuban Spanish (Puerto Rican and Cuban Spanish are to Hispanic ears what New York English is to American ears); and it's popular only where there are many Puerto Rican Hispanics, such as in the Northeast.

"Puerto Rican Spanish is very unlike Mexican-Hispanic, which seems to be the majority of the US Hispanic consumer market," says White.

Is there enough demand for pan-Hispanic (i.e., Spanish- and Portugese-speaking) call centers to serve the US and Latin America, as opposed to locating in US border cities that can serve English- and Spanish-speaking Americans?

Observers think not. Trammell Crow's White notes that he has not seen as large of an influx of Spanish-speaking call centers into Latin America as he has English-speaking call centers moving to Canada.

Hispanic Teleservices Corporation, SITEL, and TeleTech (www.teletech.com) have set up operations in Latin America. But the activity does not constitute a trend. The region, say observers, has not sufficiently developed to attract a large number of call centers.

When the market justifies predominantly Hispanic-only call centers, the prime competition will be between Mexico and Puerto Rico, say experts. While Puerto Rico has a better education system and infrastructure, Mexico's will catch up over the next five to six years.

"Mexico is potentially the optimal location in Latin America to service the US Hispanic consumer," says White. "The populations in the leading cities are large; the country's political system and infrastructure are stable; and the access is great."

SMART MOVES WITH COPC'S SMARTMOVE

Despite the cost benefits, many American companies are not ready to outsource outside the US. There are three reasons: lack of awareness; a desire to keep as many operations as possible in America; plus the complexity that selecting a near-shore or offshore outsourcer entails (see August's International Outsourcing article).

You can't drop by an outsourcer located in Kingston, Jamaica as easily as you can an outsourcer in Jamaica, Queens, NY.

To enable successful offshore outsourcing, Customer Operations Performance Center (COPC; Amherst, NY) launched in May 2002 SmartMove. The offering comprises consulting services and software tools to identify reliable, professional and cost-effective outsourcers.

SmartMove's toolkit includes vendor assessment, methodology and measurement reporting.

"We've had many companies contact us and say 'Our CEO wants us to outsource to India because he read how cheap the labor is,'" says Alton Martin, COPC's president. "They don't realize how complex outsourcing is. And when I ask if they've ever outsourced before, many of them say no."

Canadian Locations Challenges and Opportunities

As Canada attracts call centers, there are both challenges and opportunities in finding the right location.

Several cities may be priced out of the market for low-end call centers because many similar call centers have located there. Site selectors cite Fredericton, Moncton and Saint John, New Brunswick; Halifax, Nova Scotia; London, Ontario; and Winnipeg, Manitoba, as examples.

They also say corporate headquarter cities such as Toronto, Ontario, and Calgary, Alberta, have become too costly with too many other better paying employment opportunities.

But these communities can support high-end in-house and outsourced financial services, tech support and sales centers. For example, Xerox opened its second Canadian TeleWeb sales center in Halifax in April 2002 with 45 agents. Xerox's first center is in Saint John.

In November 2002, Microsoft Canada will open its first Canadian-based Microsoft Global Technical Support Centre (GTSC) with 50 reps. The center will co-locate with a new headquarters in suburban Mississauga, next door to Toronto.

The Mississauga GTSC will respond to English-language support requests regarding Microsoft Exchange Server software and the Windows 2000 operating system from Western Hemisphere customers. It joins GTSC centers in North Carolina, Texas and Washington State.

But higher-paying in-house call centers should look at locations that have attracted many lower-end outsourced call centers. James Trobaugh, senior vice president CB Richard Ellis Call Center Solutions Group (Phoenix, AZ) says these call centers provide pools of trained and experienced agents and supervisors.

"Outsourcers are tied to wages in their contract," he points out. "They can't raise wages to compete with labor from in-house call centers."

Locations near large cities (like Toronto and London) are viable for many types of call centers. They include Guelph, Hamilton, Kingston, Kitchener-Waterloo, Peterborough, St. Thomas, and Sarnia. Among cities, you might also consider Edmonton, Alberta, and Vancouver, BC.

In May 2002, RMH Teleservices opened a multilingual 400-workstation center in the Vancouver suburb of Surrey. Convergys is expected to open its second Edmonton center in September 2002.

British Columbia, shunned for years by companies that did not like the pro-union left-wing NDP government that was thrown out in an election last year, has the most potential for new call centers. Only 0.5% of the province's workforce is employed in call centers according to French. BC's unemployment rate, at 8.7% in June is higher than the national average.

That number may grow substantially as demand for BC lumber dries up with the high tariffs the US placed on Canadian softwood. Spurred also by steps to restrict unionization and to free up management by the new center-right Liberal government (see box on page xx), more site selectors are looking at the province.

"Many of those companies would not have inquired two or three years ago," says NAI's French.

Ranking high on site selectors' lists besides Vancouver (which has a large Asian population), are Victoria, Kelowna and Prince George.

Victoria is especially attractive to a broad range of inbound call centers because it has a tourist economy catering to Americans and a workforce with strong customer service skills. There are also no major call centers in that region, which has over 300,000 residents and a large university population.

Victoria also has a varied supply of suitable space. There is a vacant but never opened call center in the busy downtown. The Vancouver Island Technology Park (www.vitp.ca) located on a suburban campus, has over 100,000 square feet available.

Cities in the province of Saskatchewan are also re-emerging on site selectors' maps, chiefly Saskatoon and Regina. Saskatoon has over 210,000 residents. Regina, the province's capital, has about 187,000.

"There are a lot of people, neutral accents, plenty of real estate, but higher telecom costs, and there's little competition in Saskatoon," reports French.

Opportunities also exist for US- and English-speaking customers in Montreal; in nearby southern suburbs, such as Chateauguay; and in the Eastern Townships bordering on Vermont and New Hampshire.

Hull, across from Ottawa, Ontario (the national capital), though more costly than Montreal, accesses Ottawa's large pool of technically trained workers.

Call centers are also going to remote, small and rural locations. For them, the benefits -- affordable, loyal and quality labor - outweigh the long distances. (Many locations require two or three plane transfers and/or rental cars.)

"Four to five years ago companies wouldn't even consider Thunder Bay, for example" says Brent Bayduss, a senior consultant at Trammell Crow. "Now they're taking a hard look at [these communities]."

French recommends looking at small cities in New Brunswick, west of Fredericton and near the US border. These include Florenceville, McAdam and Woodstock; plus Bridgewater, Digby, Kentville and Truro in Nova Scotia.

Site Selection Canada's Demmings recommends looking at small Manitoba communities include Dauphin, Lynn Lake, Pinawa, and Portage La Prairie. Pinawa, the smallest of the four, has technically trained workers through a nearby nuclear research facility.

Cranbrook, BC, which has about 20,000 residents, could also support a call center. CBRE's Trobaugh reports that a WalMart opened there. The store's manager told him it had been flooded with applicants.

ACI Telecentrics (Minneapolis, MN) found caches of English-speaking workers in the rural high-unemployment Gaspe region in northeastern Quebec. In June 2002, the company opened a 250-workstation call center in Caplan. Other English speakers live in nearby Bonaventure and New Carlisle.

"We liked going where no other call center is," explains ACI Chief Operating Officer Dana Olson. "The Quebec government has been very supportive. For example, they arranged and subsidized air charter service; air access was a major issue for us."

Call centers are also more willing to tolerate and work around accents to obtain workers. Newfoundland has long been known for a fast, singsong accent, and for having Canada's highest unemployment rates.

ICT Group (Newtown, PA) announced earlier this year it would open a third Newfoundland center, in St, John's, the provincial capital and largest city. Convergys also has a large call center there.

"The availability of affordable workers [in Canada and the US outweighs] previous location inhibitors, such as accent," explains NAI's French.

Call centers targeting French-speaking customers should consider locating in Quebec or in western New Brunswick cities, such as Edmundston, Grand Falls and St.Leonard, recommends Boyd. They offer superior French-speakers than eastern Ontario, central and eastern New Brunswick and Manitoba.

"Our clients are becoming more selective about where they locate in Canada," reports Boyd. "They have an ear for regional accents. They do not want 'Franglish.'"

Canadian Provinces More Call Center-Friendly

With the dot-bomb and high-tech busts, Canadian provinces have been stepping up efforts to attract businesses, including call centers.

Quebec has designated a new downtown Montreal E-Commerce Zone to draw inbound, multimedia and tech support call centers. Eligible centers that locate there may receive refundable tax credits of 35% based on the increase in non-administrative payroll.

To help companies find the right location in Nova Scotia, the government launched a Web site, www.targetnovascotia.com. The site uses a searchable GIS database to provide current information on communities and regions in the province. The site includes labor force, population, education and real estate information. The data can be compared with that of any other North American community.

British Columbia's center-right Liberal government of Premier Gordon Campbell, has eschewed incentives. Instead, its policy is to make the province's climate hospitable to businesses. The government cut taxes and plans to slice one-third of the civil service, or approximately 11,000 jobs.

Last year, the province eliminated automatic certification of a union if 55% of non-management employees had signed union cards. Now, there must be a vote if 45% or more employees sign a union card.

The government plans to empower managers to help them cut costs. Legislation introduced earlier this year will let employers assign work for long hours in short weeks to avoid overtime. But employers need to obtain employees' consent.

The government also plans to reduce from four hours to two hours the minimum time to be paid to workers if the employer requests they work during scheduled days off.

The South American Option

When you look at the globe, South America is no more 'near shore' to the US as Europe. But some countries, such as Argentina and Chile, are options for US and Latin American call centers.

Juan Carlos Lorca, vice president of Entel Call Center (Santiago, Chile), the service bureau arm of Chilean telco Entel S.A., says Chile has an excellent labor-relations climate and high quality voice/data connections from the rest of Latin America. Chile has 14 million residents and is one of that continent's most stable and affluent markets.

Handling different Spanish accents from customers' clients in other countries is not an issue, Lorca says. His firm trains agents to be accent and idiom neutral.

Chile's capital, Santiago, with 5.2 million residents, has a large number of Portuguese-speaking workers. That lets Entel's call center serve all of South America, including Brazil. The former Portuguese colony is the largest Latin American country, with 175 million residents.

Next-door neighbor Argentina is larger, with 36 million residents, and has an excellent education system but its economy is in well-publicized trouble. But that has enabled call centers to cut costs.

According to Andres Vergara president of outsourcer Publimail (Buenos Aires, Argentina) www.publimail.com the decision by the government last year to remove parity between the Argentinian peso to the US dollar (it has been trading at $US = 3.5 pesos) allowed it to cut customer acquisition costs to US clients by more than half. Publimail started in Chile but expanded to Argentina in 1999.

Vergara adds that Argentina has a strong sales culture. Prior to the devaluation Publimail had won all of Marriott Vacation Club's Latin America Division business from competing outsourcers' call centers in Mexico, Panama and Venezuela; Marriott had parceled out the work between the four centers.

Vergara said Marriott switched to outsourcing from in-house at its Orlando, FL headquarters to cut costs and obtain better Spanish speakers.

But a pan or regional South American call center strategy may not work. There are accent and political differences between South American countries, even those that speak the same language, according to SITEL executive vice president Dale Saville.

"Chileans won't talk to Argentinians and vice-versa, and the cross-border telco costs are high," says Saville.

ICT's Multiple New Locations

ICT Group (Newton, PA) is, literally, seeking the best of all worlds.

The outsourcer opened its first Caribbean call center in Bridgetown, Barbados, with 150 workstations in February 2002. It partnered with vCustomer, an Indian outsourcer with a call center in New Delhi. And the outfit is opening a Canadian call center in Peterborough, Ontario, with 230 workstations this fall.

Tim Kowalski, senior vice president of corporate planning and president of ICT Group CRM technology, notes that the Barbados call center and the vCustomer partnership is less costly than its Canadian call center. But he sees the centers augmenting each other.

"We want to give our clients flexibility," he says. "Some of them will want to have their contacts handled in contact centers located close to their offices - our centers in the U.S. and Canada provide that proximity. Others do not care where the contacts are handled as long as both the costs are low and the quality is there."

Option for European Call Centers

Just as Caribbean countries -- Jamaica, Barbados, and Trinidad and Tobago -- are a low-cost and a customer-friendlier alternative to India for American call centers, so too are these nations’ viable options to UK-serving call centers.

Many of these nations still maintain ties to Britain, their former colonizer, through the Commonwealth. The English spoken is British-based, as is their educational systems. The principal telco, Cable and Wireless, is based in London.

According to Philip Cohen, a teleservices consultant based in Skelleftea, Sweden, the Caribbean countries can serve British customers at up to 40% less than call centers at home.

Similarly, the former Spanish and Portuguese colonies (Chile, Costa Rica, Mexico and Brazil) are low-cost and better quality options to serving Spain and Portugal.

Juan Carlos Lorca, vice president of Entel Call Center, a Santiago, Chile-based outsourcer, claims that his company can compete with Spanish and Portuguese call centers. Agent costs are twice as much in Spain than in Chile for inbound customer service.

"The labor regulations are much more complex in Europe than in South America," he points out. "That makes labor less flexible for call centers. Our advantage is that we have lower costs and more flexible labor."

King White, vice president of Trammell Crow Call Center Services (Dallas, TX), says that Mexico is emerging as an alternative to locating in Spain, and is Brazil to locating in Portugal.

"Wage rates in major markets like Madrid and Lisbon are $7 to $10 per hour," he explains. "But wage rates in Mexico City and Sao Paulo will be around $3 to $4 per hour.

"The wages can go lower in smaller city markets in Spain, Portugal, Mexico and Brazil," he adds. However, there is typically not sufficient fiber optic infrastructure or an educated workforce in those markets.

Costa Rica is, too, an alternative to Spain, adds Cohen, even though its costs can be higher than European locations. Costa Rica has a small, well-educated workforce with an excellent reputation.

"Costa Rica [can] serve Spanish customers in the evenings, taking advantage of a several hour time-zone difference," he points out. "That saves money over having a call center open at night in Spain."