Auxis, a nearshore outsourcing and consulting firm focused on helping organizations achieve peak performance in their back office operations has released the results of its 2019 Labor Savings Report: Creating Value with Finance Nearshore Outsourcing. The report provides CFOs and Finance Executives with a detailed cost comparison of the United States costs versus Costa Rica for the accounting transactional positions that would typically be outsourced. The analysis includes positions for Accounts Payables, Accounts Receivables, General Accounting, and Payroll.
According to the report, the typical finance department is spending more than 70% of its time on non-strategic, transactional activities which prevents them from focusing on becoming a true business advisor. “Modern organizations need finance leaders who are not scorekeepers but are commercially, market savvy executives with strong capabilities to predict and improve the future performance of the organization,” said Raul Vega, Auxis’ CEO.
In addition, it’s not a secret that the United States is a high-cost, competitive labor market where young professionals are looking for more engaging and rewarding careers. According to Robert Half’s 2019 Salary Guide for Accounting Professionals, 91% of finance leaders reported challenges finding skilled professionals, with unemployment in the sector being even lower than the national average.
Based on all of these factors, Auxis’ report advises that finance outsourcing is not just about cost reduction anymore. It’s about expanding an organizations’ access to specialized talent, best practices and technologies to accelerate the optimization of its finance operation while increasing their focus and investment to where they truly add competitive business value.
The report states that US finance executives should expect to save on average 32% to 42% in labor costs by outsourcing transactional processing roles to Costa Rica, which is equivalent to $27,000 per employee per year. The real savings opportunity for each organization will vary depending on where their finance back office is currently located in the United States. For example, high labor cost markets such as New York and San Francisco will provide average savings of over 50% (~$53,000 per employee per year), whereas lower labor cost markets such as Atlanta or Miami will provide lower savings in the range of 30% to 40%.
“The time and geographic proximity to the US provided by our nearshore outsourcing model from Costa Rica significantly facilitates and enables the achievement of this type of high-performance results in comparison to traditional Asia-based models,” added Vega. The report highlights how San Jose has been consistently recognized as the #1 nearshore destination by multiple research firms including Tholons and A.T. Kearney. Starting in 1999 with Procter & Gamble, Costa Rica has become a primary hub for Finance & Accounting Operations with leading enterprises such as Amazon, Cargill, DHL, Pfizer, Western Union, 3M, and Walmart, that have chosen to place their Shared Service Centers in the country.
The Costa Rican government estimates the amount of Finance Shared Service Centers in the country to be over fifty. In addition to this large corporate presence, Costa Rica is also the #1 country in Latin America for English proficiency, which has led to almost 100% of the employees in multinational companies being local citizens.
Auxis opened its Global Delivery Center in Costa Rica in 2009 and is currently supporting over 50 different midmarket and enterprise organizations that have outsourced their Finance, IT and Customer Service operations. The Top 100 Global Outsourcer plans to continue expanding its capacity in Costa Rica as well as open a new hub in Bogota, Colombia in early 2020.
With a 22+ year track record, Auxis is a management consulting and outsourcing firm focused on helping organizations modernize and scale their back office operations through a combination of customized solutions including Nearshore Outsourcing, Shared Services, Robotics Process Automation, Cloud, and Analytics. Recognized as one of the Top 100 Global Outsourcing providers, Auxis’ unique perspective as both advisor and outsourcing operator allows its clients to obtain real benefits and ROI from every engagement.
To download the report please click here