In recent years, Argentina has suffered a marked loss of competitiveness in the BPO (Business Process Outsourcing) and Contact Center services sector, a key industry within the Knowledge Based Services (KBS). This decline responds mainly to two structural factors: a high tax burden and a high and unstable exchange rate in the medium term. These conditions make operations more expensive, discourage foreign investment and directly affect the ability of companies to compete in the global market.
The tax burden on employment in Argentina can reach up to 50%, well above the regional average of 30%. In addition, the 21% Value Added Tax (VAT) increases operating costsreduces the purchasing power of workers and generates a vicious circle that negatively impacts both employees and employers.
On the other hand, exchange rate instability hinders the predictability necessary to plan long-term contracts, an essential aspect in the offshore and BPO services industry. While in competing countries such as Colombia, Costa Rica and Paraguay economic conditions are more stable, Argentina faces abrupt fluctuations that generate distrust in the country as a sustainable investment and business destination.
These structural disadvantages directly affect the competitiveness of Argentine companies, which must charge between 14 and 15 dollars per hour of service, compared to the less than 10 dollars offered by regional competitors. Although nominal wages in Argentina may be similar to those in countries like Colombia, the combination of a high exchange rate and a heavy tax burden exacerbates the cost gap.
Additionally, while other countries in the region offer tax incentives and special regimes to attract investment in the BPO industry, Argentina lacks effective policies in this matter. This scenario not only limits growth opportunities for local companies, but also puts at risk the reputation and leadership that the country once had in this strategic market.
To reverse this situation, it is essential to implement structural reforms that reduce the tax burden on employment and stabilize the exchange rate. These measures would not only allow us to regain competitiveness, but could also generate more than 30,000 new jobs in offshore services, replicating the successes achieved at the beginning of the 21st century.
In conclusion, Argentina’s loss of competitiveness in the contact center industry is the result of inadequate fiscal policies and lack of macroeconomic stability. As regional competitors move forward with more efficient cost structures and promotion strategies, Argentina needs to adapt and evolve to regain its position as a leader in SBCs and ensure a sustainable future for companies and workers.
*Javier Serafini is CEO of CAT Technologies and Vice President of the Argentine Chamber of BPO and Contact Centers.
by Javier Serafini
