The services export industry employed 1.4% of the Costa Rica labor force, and generated $2.8 billion in revenue in 2011, according to CINDE (Costa Rican Investment Promotion Agency) (PDF). The services export industry includes Business Process Offshoring (BPO), Information Technology Offshoring (ITO), and shared services (such as entertainment and media). The services export industry does not include tourism. Since 2004, the services export industry has grown at the rate of 17.4%, from 5 companies in 2000, to over a 100 in 2010.
BPO, itself, covers a wide range of services including contact centers, back-office services, shared services, and legal processes. The article “Call Centers in Costa Rica Employ 16,000 While Developing a Middle Class” discussed the roles that call (contact) centers play in BPO. In a sense, contact centers play the front-office role in BPO. Back-office services include such tasks as accounting, payroll, human resources, finance, insurance, telecommunications, and others tasks.
While a part of BPO, Legal Process Offshoring (LPO) continues to grow, and offers an expanding future market for BPO companies. LPO covers such tasks as e-filing, docketing, tagging, e-discovery, trademark research and patent filing. Essentially, LPO involves paralegal tasks that can be transferred offshore. Nearshore Americas reported while India dominates the nascent market, there are opportunities for Costa Rica BPO firms to enter the market. The biggest limitation Costa Rica faces is the potential lack of employees that understand British common law. This does not mean that LPO is not possible in Costa Rica, it just means that the tasks are limited to the skill levels of the employees.
BPO companies divide between those that provide BPO services to their own corporation, and those that provide third-party BPO services. There are many large corporations with BPO operations in Costa Rica, including Hewlett Packard, Intel, Bank of America, Proctor and Gamble, Western Union, Emerson Electric, and IBM. Some companies such as Intel and HP, combine BPO services with manufacturing or repair facilities. Third-party BPO service providers normally provide a diversity of BPO services. Sykes Costa Rica offers both technical support, customer service, and sales. UTHOS offers BPO support in the areas of software development and financial services. Costa Rica’s Call Center offers BPO service ranging from telemarketing to order processing.
The CINDE report “Costa Rica Human Capital Cost – Services Sector” (PDF download) estimates the average wages for shared service and back office workers, as follows:
|Junior Finance Analyst||$1027||$1381|
|Junior Systems Analyst||$1616||$2174|
|Junior Technology Analyst||$1103||$1483|
|Shared Services Team Leader||$1187||$2538|
|Shared Services Supervisor||$2579||$3469|
|Shared Services Manager||$8126||$10929|
|Senior Finance Analyst||$1986||$2672|
|Senior Human Resources Analyst||$1589||$2137|
|Senior Technology Analyst||$1407||$1892|
The above table reflects the average salaries for September 2011, when the exchange rate was 510 colones equaled one US Dollar. The Mandatory Benefits includes the Christmas Bonus, which is equal to one month of pay.
Will the higher salaries, including the Christmas bonus, hurt the BPO sector in Costa Rica? The answer depends on what pickles Costa Rica has to offer. If you don’t know about pickles, then you need to view Bob Farrell’s (founder of Farrell’s Ice Cream Parlor) lecture on “Give em the Pickle”. It is all about customer service. Customer service is the job of every employee in a company to the country seeking new off shoring business. So what pickles does Costa Rica have to offer? The list from CR Technology Insight includes:
- Costa Rica ranks #1 in Latin America for innovation.
- Costa Rica ranks #4 in the world for high technology exports
- Costa Rica ranks #1 in Latin America for high technology exports
- Costa Rica ranks #3 in Latin America for network readiness
Statistics are nice, but it is the Ticos that make the difference. The educational system and government stability are also important. Costa Rica may not be the cheapest place to do business, but it is the best place in Latin America.