You may have already heard about nearshoring and the numerous nearshore outsourcing benefits but aren’t sure how to get started.
In this article, we’ll cover the advantages of nearshoring and discuss how you can find nearshoring partners of your own.
What is nearshoring?
Nearshoring refers to the practice of outsourcing certain business functions or tasks to a nearby country, usually within the same time zone or territory. It’s different from offshoring, which involves outsourcing to a different country or continent. The main goal of nearshoring is to take advantage of the cost savings and other benefits of outsourcing while minimizing the drawbacks, such as time zone differences and language barriers.
Nearshore outsourcing benefits
So, what are nearshore outsourcing benefits, and why should you consider it? Some of the advantages of nearshore outsourcing are that you can access a larger pool of skilled workers and resources while staying in close proximity. This means you can easily hop on a plane and interact with your team.
You can also use nearshoring to take advantage of lower labor costs without compromising quality or productivity, especially in the IT industry. Many companies outsource their development work to Mexico, Ukraine, Brazil, or Chile to save money and time.
The main benefits of nearshore outsourcing are:
- Ease of communication: One of the critical nearshore outsourcing advantages is that you are in the same time zone as your team so that you can communicate quickly. Nearshoring allows organizations to outsource to countries that have similar cultures and languages, making it easier to interact.
- Lower labor costs: You can use nearshoring to take advantage of lower labor costs and currency differences.
- Expansion to new markets: Nearshoring allows organizations to expand their businesses to new markets, which helps grow their revenue.
- Scalability: Nearshoring allows organizations to outsource specific tasks to the nearshored company, which gives them the ability to scale and remain agile.
- Improved Security and Data Protection: Some regions share similar security protocols and legislations, e.g., the EU, which makes it easier to remain compliant.
That doesn’t mean that there aren’t drawbacks. It can be harder to find the right talent in a nearby country, especially if the company requires special skills that are available in the region. Even though countries are in close proximity, there could still be language and cultural barriers that might impact the relationship, which should be kept in mind.
You need to consider both the advantages and disadvantages before deciding whether or not you want to consider this model.
How do you find the right nearshoring partner?
Not every nearshoring company will meet your needs. In fact, you may need to interview and evaluate several companies before finding the right partner for your business.
Start by defining your needs and goals, including deciding which tasks or functions you want to outsource and the desired outcome. For example, you may want to hire an entire team of developers to complete a project from start to finish or hire an outsourced team to manage customer support queries while your core team focuses on more important tasks.
Once you’ve set your goals, you need to start researching your potential partners. Go online, visit trade shows and networking events, and speak to other organizations who can recommend agencies to you.
After compiling a shortlist of partners, start evaluating them against your list of needs and goals. Look at their qualifications and references. Verify their certifications and compliance whenever possible, and validate references carefully. You may even compile a shortlist of partners and decide to visit them all individually to get a sense of their capabilities and culture.
If you found a partner that aligns with your needs, start negotiating your terms, including your scope of work, timelines, and payment terms, so that there is no confusion down the time if you can start with a pilot project. This will enable you to evaluate their performance and communication skills before committing to a long-term contract.
When you take the many nearshore outsourcing benefits into account, it’s virtually a no-brainer. Just make sure to do your research so that you can find a partner that is aligned with your goals, and you will succeed.