Costa Rica: Guide to Nearshore Expansion & Business Process Outsourcing

Deciding where to locate or outsource your contact center, collections, shared service center, software engineering and other back-office operations can be a challenging endeavor, especially when considering nearshore and offshore geographies. Costa Rica continually emerges as one of the top locations to consider during the site selection process, which has helped the country become one of the most mature and popular destinations for companies to expand. 

The region has successfully attracted in-house back-office employers such as Amazon, Uber and Equifax, including leading business process outsourcing (BPO) providers such as Concentrix, Foundever and UCB. To help you understand market conditions, Site Selection Group summarizes some of the location’s attributes in this market report.

Market conditions in San Jose, Costa Rica

Labor conditions in Costa Rica have become more challenging over the years, primarily due to increased market competition, which applies pressure to wage rates and employee attrition. To help you understand the location, the following summarizes the market conditions within the San Jose metro area, which has become the primary city for companies to consider.

Key benefits of Costa Rica

The following provides a summary of some of the benefits of Costa Rica. It is critical to carefully evaluate these items, as well as uncover the negative aspects of the region through a comprehensive market analysis by a professional location advisor such as Site Selection Group.

1. Educated Workforce: Costa Rica boasts a literacy rate of around 97.8%, one of the highest in the region. The country has emphasized education, with free and mandatory schooling available to all its citizens. This commitment to education has led to a knowledgeable workforce proficient in various languages and skilled in different disciplines, making them ideal candidates for diverse contact center roles.
   
   
2. Bilingual Population: English proficiency in Costa Rica is relatively high, particularly among the younger population. Many Costa Ricans are exposed to English at a young age and receive advanced English education in schools and universities. This has made the country a magnet for businesses looking for fluent English speakers outside of English-speaking countries.
   
   
3. Stable Political Climate: Costa Rica stands out in Central America for its political stability. It has no army and has had a stable democratic government for decades. This stability reduces the operational risks for businesses and assures continuity.
   
   
4. Strategic Location: Located in the heart of the Americas, Costa Rica’s time zone benefits businesses looking to serve North American clients. Being in the Central Standard Time (CST) zone makes real-time collaboration easier and reduces the need for night shifts.
   
   
5. Cost-Effective: While offering a high-quality workforce, the operational costs in Costa Rica can be significantly lower than in North America or Europe by approximately 50%. The combination of quality and affordability is a powerful incentive for companies looking to establish or expand their contact center operations.
   
   
6. Cultural Affinity: Costa Ricans, colloquially known as “Ticos,” are known for their friendly and service-oriented nature, not to mention their cultural affinity to the U.S. This cultural characteristic aligns perfectly with customer service roles, ensuring a positive and helpful attitude in interactions.
   
   
7. Modern Infrastructure: Costa Rica has invested significantly in its infrastructure, including roads, airports and telecommunications. Crucial for contact centers and IT-related operations, the country has a reliable internet backbone.
   
   
8. Supportive Government Policies: The Costa Rican government actively encourages foreign investments and has an excellent track record of successfully attracting foreign companies to locate there. The Free Trade Zone (FTZ) areas, for instance, offer companies various incentives, such as tax exemptions and simplified procedures, if they meet specific investment and employment criteria.
   
   
9. Quality of Life: The country's reputation as a happy nation isn’t just for show. The excellent quality of life, combined with its natural beauty, provides an attractive living environment for expatriates and locals alike. This aspect can play a role in attracting and retaining talent.
   
   
10. Sustainability: Costa Rica is a global leader in eco-friendly initiatives. If corporate social responsibility (CSR) and sustainability are essential for your brand, Costa Rica’s green approach aligns with such values, offering opportunities for eco-friendly operations and community engagement.

In conclusion, Costa Rica’s unique blend of skilled human capital, strategic location and inviting business environment make it an attractive hub for many back-office functions such as contact centers, collections, shared service and software development. Whether you’re a startup looking to establish your first nearshore operation or an established enterprise seeking to expand or outsource, Costa Rica presents a compelling case. However, it is critical to take some of the negative aspects of the region into consideration.