Costa Rica could saturate as a nearshoring destination

The companies continue to establish in Costa Rica, but it could be hard to find new talent in this Central-America country.

Costa Rica has been one of the main nearshore destinations in America and maintains its attractiveness, but intense competition with countries like Colombia and Mexico is beginning to emerge, as it was said by Nearshoring Americas.

The companies continue to establish in Costa Rica. Recently the outsourcing services company Bill Gosling announced that it would open a new call center in the country for this year. The businesses present in the country have expanded operations, especially those focused on social services and cloud-based services such as Akamai, Neustar, and IBM.

Costa Rica has several advantages as a technological hub: it is close to the United States, it is literate in English, and its educational standards are higher than the regional average, it has a good quality of life and economic and political stability.

As a country, Costa Rica has encouraged foreign investment and development of companies in the country with tax reductions and the creation of free trade zones. In recent years, the companies installed in these areas have increased an average of 6%, and the outsourcing sector represents 52% of the companies in the area, said Adelina Villalobos, partner of the BLP firm in San José.

Salaries among companies located in free zones are 1.8% higher than in other sectors, while wages in the country are higher than in other Latin American countries.

However, Costa Rica may not always be the best answer. As a destination for outsourcing and software development, it could be on the verge of saturation, says Villalobos.

Talent can be hard to find in Costa Rica

One of the points of concern is talent since some skills required by companies are not being developed. The country has plans to make learning English a priority.

Because it is a small country, not all the skills that are needed may be available. For this reason, Costa Rica is not always the best answer, said Raul Vega, president and CEO of Auxis.

“I do not think Costa Rica has a problem with talent, at least not for our business. We also have resources in other countries that work with the Costa Rican team that has a leadership role, but not specialized skills like our partners in Colombia, Argentina, and Mexico.”