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Central America has a diverse set of small countries—such as Honduras, Guatemala, El Salvador, Nicaragua, and Panama—that have been the subject of a lot of near-sourcing for U.S. companies in recent years. These countries have been focused on educating their residents, specifically in tech industries, to be attractive to American companies. If you’re considering doing business in Central America, it’s important to understand human capital trends in the region. Here’s everything you need to know.
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Many Central American countries have been working hard to increase the number of tech graduates and tech talent they have. Here are some key trends in the area:
- Honduras is home to the Universidad Tecnologica de Honduras, which began in 1986. This university is cranking out high-tech graduates at an increasing rate in recent years.
- The workforce in Nicaragua is young and highly educated. More than two-thirds of all workers in the country are 40 years old or younger, and many hold degrees from higher education institutions.
- Panama embraces technology at a very high rate
.In addition to a state-of-the-art national telecommunications system, Panama has also launched the “Smart Nation” program to provide free Wi-Fi throughout Panama City. The country has also launched the
Key Sectors in South America
Call centers and the tech sector in general are becoming significant industries for Central American countries.
Here’s an overview of the region’s other main business sectors:
- Agriculture: Many Central American countries are high producers of agricultural goods, and the industry makes up a huge part of their GDP. Fruits, vegetables, and coffee are some of their main exports.
- Shipping: Many Central American countries have at least one coast, if not two. This makes them ideal centers for shipping goods around the world.
- Tourism: Central American countries are increasingly popular among travelers from around the world. The tourism sector makes up a significant portion of many Central American countries’ annual GDPs.
Key Sectors for Outsourcing
One of the main sectors for nearshoring in Central America is call centers. This has been particularly popular for U.S. companies who are looking for hard workers who can support their customers.
This region is also a good area for tech and IT outsourcing as well, with programmers coming much cheaper in Central America than in the U.S.
To attract more American business to the region, Central American countries have been increasing their English education efforts in recent years. In some of the smaller Central American countries, English proficiency is less common. Still, college-educated workers speak English at a much higher rate than other workers.
Large cost-savings can be realized by outsourcing tech services to Central American countries. In Guatemala, for example, the average computer technician earns the equivalent of $11,942 per year. That pales in comparison to the U.S. where the average worker for that job earns more than $80,000 per year.
Prominent Cities for Business
There are many prominent cities throughout Central America for business. Each have their own unique aspects, based on their country and region.
Some top cities for business in Central America include
- Guatemala City: This is the capital city of Guatemala—a cultural hub and a metropolitan city.
- Panama City: This is the capital city of Panama, located on the Pacific coast of the country. Its population is almost 900,000, and it is home to many architectural wonders. It’s a robust metropolitan city that is home to culture, business, and nightlife.
Attrition rates can often be higher in Central American countries, but the tech sector is sometimes immune to this problem. These are some of the best jobs in the region, so when people get them, they tend to stay.
Still, U.S. companies do have to realize that the turnover rates in smaller Central American countries tend to be higher than some other countries in the region.
Is Central America Right for Your Business?
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in Central America.