February 27, 2023

What is nearshore outsourcing?

When it comes to improving a company’s inner workings, many organizations, whether big or small, choose outsourcing. This is an alternative that can reduce costs and enhance business performance. However, outsourcing services can be provided in several different ways, which gives us plenty of benefits. 

Is at this point that we find the concept of nearshore outsourcing as one of the most attractive types of outsourcing. At T2W we have an extensive experience in IT outsourcing and recruitment, so we are familiar with the way it works. In this article, we’ll delve into nearshore outsourcing and the elements that make it so attractive in the business world. 

What is outsourcing? 

To fully understand the concept of nearshore outsourcing, let’s start by defining what outsourcing is. Outsourcing is the process where a company delegate part of its internal processes to another experienced organization. One of the most common examples is recruitment outsourcing, in which all the responsibilities related to talent acquisition inside an organization are completed by an external agency with more experience in that area. There are different types of outsourcing, which lead s to the next section. 

What is nearshore outsourcing? 

We talk about nearshore outsourcing, also referred as nearshoring, when a company transfers one of its processes to an organization located in a nearby country. In most cases, nearshoring is associated to the world of talent outsourcing, especially information technology professionals. 

In general, nearshoring requires working with a company settled in a neighboring country or located in the same region. The geographic location is key to understand nearshore outsourcing and its distinctive benefits. Keep in mind that regular outsourcing can be provided by companies located anywhere in the world.  

If you outsource your processes to an organization located half a world apart, you might find some inconveniences. What type of issues exactly? Well, in general, there may be problems related to the different time zones or collaborating in different languages. All these are problems that can be easily avoided with nearshoring by choosing a company located in a nearby country. 

Benefits of nearshore outsourcing  

Benefits of nearshore outsourcing

1. Lower costs 

One of the main reasons why so many organizations choose nearshoring is its cost-effectiveness. The cost of talent-based services tends to be lower in other markets. For example, there are many companies in the United States that look for IT professionals in Latin America. That is a nearshore market that provides the necessary talent at a fraction of the price it would cost in the local market. 

2. Quality talent 

One of the main concerns for companies when they think of outsourcing is the quality gap they feel exposed to. After all, results and work standards are not the same all over the world. As a consequence, the results are not always as good as expected, which is something many organizations fear deservedly so. However, nearshoring is a great way to avoid those problems. 

Since the company providing the outsourcing service is located in a nearby geographic region, quality standards stay the same. The possibility of working in a larger market increases competition among nearshore professionals. As a result, the talent you find is as good as the one you would receive in the local market with the advantage of the lower cost. 

3. No time differences 

It can be really difficult trying to work together with people located on the other side of the world. While technology help us jump geographic frontiers, time zones can be an unavoidable barrier. Any problem or unexpected situation would force the team to work very late at night. That makes difficult to react quickly to changes. 

You won’t find that problem with nearshore outsourcing since you work with people inside the same region as you. In most cases, time zones are shared or, in the worst-case scenario, there is a time difference of one of two hours. That makes collaboration more fluid and gives a better response capacity. 

4. The same culture 

As we previously mentioned, the nearby location proves to be a key advantage for nearshore outsourcing. While the talent you work with is in another country, you share a similar culture. The workstyle, cooperation in projects and interactions are more effective when idiosyncrasy is the same. At the same time, an important obstacle for regular outsourcing is the language.  

Professionals can be qualified in their respective area of expertise, but if they don’t speak the same language, it will be nearly impossible to complete complex projects. With nearshoring, companies are located in the same region and the language can be the same. If a neighboring country has a different language, professionals are usually proficient in it due to the close location to that country. 

Now you know what is nearshoring and its main advantages. This is an alternative that can be part of a more comprehensive business strategy. If you choose the right outsourcing company, results can be really productive. 

At Talent2Win, we strive to align your company’s business objectives with the best Talent Acquisition strategies available. If you want to learn more about the services we offer, do not hesitate to contact us.     

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