Nearshoring and Things You Must Know About It

As the technological business grows and develops, it must decide whether to hire workers from inside the country or outsource. Recent tendencies suggest that outsourcing is getting increasingly popular, with more places worldwide becoming outsourcing hubs.

Nearshoring

There is a solid reason for this: it’s more convenient and profitable for companies who seek to delegate software development. After all, IT outsourcing is a cost-cutting technique that allows businesses to expand more quickly without sacrificing quality.

For example, your company is based in the United Kingdom and rapidly growing. But due to operational or financial reasons, there are no vacancies in the office, or there is simply a shortage of competent experts. Then it makes sense to think about nearshoring Portugal, for instance. The average cost of living is lower in this country, there are many outstanding IT professionals, and even the time zone is the same.

In the article, we will discuss nearshoring as a recent trend among tech giants.

What Is Nearshoring?

Nearshoring is a type of outsourcing in which the business processes of the company of one country are delegated to the neighboring countries. This type of outsourcing is common in Western Europe, which typically recruits developers from Eastern Europe. When it comes to North American businesses, outsourcing takes place in Mexico or other Central American countries.

Nearshoring diagram

Source: Mobilunity

Benefits that nearshoring provide:

1. Financial advantage

Nearshoring has many benefits, and it’s one of the primary reasons why IT companies pick this model of work. Salaries are often lower in countries that provide nearshoring services, reducing the customer’s country expenses. Furthermore, using business nearshoring saves money on job postings, interviews, and staffing.

2. Cooperation in the same time zone

The proximity of countries is an undeniable benefit, as even if there is a time difference, it is modest. As a result, it will allow for high-quality, real-time communication between companies. And if personal meetings are required, it is considerably easier to coordinate with nearby countries.

3. Cultural and language closeness

Companies will be able to work together in harmony and complete comprehension of the needs for the product they are developing due to similar cultural values and, in some cases, languages. Besides, understanding across organizations allows you to streamline the development process, resulting in a faster product launch and smoother bug fixes.

4. Ability to focus key company workers on high-priority tasks

You can delegate secondary but extensive and time-consuming tasks to outsource workers – and leave the essential ones for the core staff.

5. Ability to swiftly expand

Companies with occasional or seasonal workloads will benefit from this. When you require additional personnel, you can employ a nearshoring team from a neighboring country.

6. Extensive pool of qualified specialists

There are cases when the customer’s country does not have enough professionals to complete a specific task, while such experts may be in neighboring countries. Such experts are usually highly educated and experienced.

7. Data security

When it comes to European countries, they have roughly the same data protection laws, protecting the customers’ data and ensuring the success of all initiatives.

Popular Companies Using Nearshoring

  • Google is outsourcing and nearshoring all around the globe.
  • EPAM Systems – an American company; nearshoring in Europe.
  • Skelia is a company from Luxembourg with many representatives across Eastern Europe.
  • JCommerce – a software development company based in Poland.
  • MentorMate is a Bulgarian nearshoring service provider.

Countries Providing Top Nearshoring Opportunities

As a successful nearshoring example, PrettyLittleThing, a prominent British fashion retailer, required enhancing its software development in 2019. The organization needed a company capable of providing them with a team of talented developers, so they turned to N-iX, a Ukrainian nearshoring firm. The Ukrainian company promptly assembled a group of PHP, JavaScript, and AWS experts that assisted in speeding up the software development process and automating the product creation on PrettyLittleThing’s website.

In terms of nearshoring for an IT company, Ukraine is a perfect example to follow. Currently, the Ukrainian IT industry employs more than 190,000 professionals, which makes this country a treasure trove of talents. Ukrainian nearshoring companies offer comprehensive solutions to the client’s business problems, focusing on an individual approach, investing a lot of effort and dedication.

Other countries providing nearshoring opportunities:

Portugal

Portugal IT opportunities include an ideal and accessible location, affordable cost of living, and plenty of talented developers. A country’s transparent legal system, no bureaucracy, and the opportunity to file most documents online are also beneficial.

Belarus

Belarus is one of the world’s regions with a lot of potential in terms of information technology and one of Eastern Europe’s most attractive outsourcing destinations. It is an ideal location for nearshoring because of the lower hourly wages and qualified experts.

Conclusion

In today’s global labor market, the employee’s physical location is becoming not that essential. Nearshoring has numerous advantages, and the trend toward such a cooperative model is expanding year after year. It is both cost-effective and practical. However, while selecting a company for international cooperation, you must be mindful and consider all of your requirements.

We hope that our article has assisted you in how nearshoring works and what benefits it provides.

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