Threat of swine flu on outsourced industries in Mexico

Concerns over swine flu outbreaks in Mexico have led to many governments issuing warnings against non-essential travel to the country. Considering the existing worries over ongoing border violence, as well as potential agent absence, independent market analyst Datamonitor believes the virus could have a negative impact on the Mexican contact center outsourcing sector.
The recent outbreak of the virus commonly known as swine flu is cause for concern among contact center outsourcers based in Mexico, should the spread of the disease not slow in the immediate future. With Mexico seen as the global epicenter of the illness and its capital city currently in the midst of a five-day shutdown, the potential damage in the near-to-medium term could be very serious.

It’s caused havoc in the personal lives of Mexico’s citizens as well as in domestic business operations. Medical research indicates the disease is highly contagious and transmits easily in areas with limited air circulation and close human proximity. This has had an impact on businesses in that staff commuting to work are concerned about using public transport, and the concern about crowded office environments couldlead to employees staying home.

For shared services and or outsourced contact centers, the direct impact, for now,will be primarily from an operational standpoint, according to Peter Ryan, Head of Contact Center Outsourcing Analysis at market research firm Datamonitor. The more progressive operators have taken immediate action to maintain employee morale and preserve business contingency, he says, by implementing healthy workplace environments.

"As simple as it sounds, promoting a clean work environment and offering protective masks and anti-bacterial soap goes a long way to calming employees’ concerns. Anything that is seen as supporting the health of the office is positive," says Ryan. Equally, he says, to minimize work disruptions as a result of staff staying home, some operators are offering bus-shuttle services, such as have already been implemented in many Indian or Egyptian contact centers.

Those outsource providers with global operations will generally have good contingency plans in place and are able to move capacity from Mexico, if necessary, explains Ryan. But he emphasizes, "As far as I’ve been told, in the conversations I’ve been having in the last few days, so far most people have been coming in to work."

The global players will probably be OK, says Ryan. Natural disasters in the past few years have ensured contingency and disaster recovery are built into the planning stages."Where you may see some concern is in regional or locally-based shared services operations. These may have fewer options for relocating work."

Ryan credits the Mexican government for taking immediate steps to ensure the safety of the industry. With a number of other Latin American countries pushing to take on outsourced services—Argentina, Chile, El Salvador and Guatemala—Mexico is seeing some stiff competition and this latest news comes as a blow, particularly as the country is already dealing with ongoing border violence and drug cartel wars. Datamonitor believes that the current outbreak could also slow investment into Mexico, due to the health-related fears of business people unwilling to travel into the country. With the US and Canadian governments issuing warnings against non-essential travel to Mexico, and some operators temporarily halting flights into Mexican cities, prospective investors may decide to examine other delivery locations that are perceived to be safer from a health standpoint. "This latest outbreak may act as an investment deterrent," concedes Ryan.
Outsourcers based in Mexico are likely to find it more difficult to attract offshore or nearshore investors than they have in recent years, warns Ryan. Contingency plans need to be developed to mitigate these risks.