Have you ever heard about the term Nearshore? Influential leaders have been considering the advantages and disadvantages of outsourcing in its different forms: onshore, offshore, and Nearshore. Defining strategies and building profitable and efficient business partnerships is a constant challenge for every growing company. Decision-making is a multifactorial issue. When it comes to going beyond borders, there are a lot of additional factors to consider.
Knowing each of these modalities is vital when opting for any of these forms of contracting. The success of the business alliances established in the future will depend on it! When we talk about outsourcing, we refer to hiring services from a third party outside our company to carry out tasks that our workers traditionally performed.
The critical element that differentiates onshore, offshore and Nearshore outsourcing is the distance between the contracting company and the company that will provide the services. Based on this, we can define each modality as:
- Onshore: contracting of service providers within the same country.
- Offshore: contracting of service providers in a country considered distant.
- Nearshore: contracting services from a geographically close supplier.
Now that we know these definitions, we should go deeper on Nearshore. It encompasses the benefits of both onshore and offshore. It has become one of the most successful forms of outsourcing today.
We define Nearshore as the outsourcing or externalizing services to countries whose geographical proximity facilitates work processes and implies benefits in terms of costs and productivity.
When we talk about Nearshore concerning Europe, Spain, Portugal, Czech Republic, Hungary, Poland, Slovakia, Romania, and Bulgaria stand out as the preferred choice. The broad market now identifies Nearshore with primarily Canada and Mexico for the U.S. market.
The choice of this modality considers geographical location, cultural similarities, political and economic ties, and legal situation. The best combination of factors will result in the country with the most appropriate conditions to be the desired service provider.
What are the benefits of Nearshore for your company?
Nearshore reduces costs
The outsourcing phenomenon is gaining strength and importance within the business environment. Cost reduction is one of the advantages, with the highest weighting among 80% of the companies consulted in the United States, the Netherlands, Germany, and Spain. The reduction of fixed costs associated with maintaining an in-house workforce and human resource management is evident. This is one of the most essential and visible benefits when opting for nearshoring. Even those who have decided on offshoring have discovered the chain of hidden costs associated with this modality. Travel, supply chain, and other expenses make it a more costly model in the long run.
Increased reinvestment and growth of your business
Significant savings will allow your company to decide when outsourcing nearby to reinvest that money to grow, plan and articulate an internationalization strategy for the future.
Geographic proximity brings your company many benefits:
- Savings in merchandise shipping and transportation costs.
- The similarities in the time zone are an essential factor. Although this characteristic may seem irrelevant, you will discover its strengths when working as a team. We can coordinate daily communication, meetings, and even business travel more quickly and productive!
Cultural similarity and economic and legal relationships
In the financial and legal aspect, proximity offers favorable business agreements for both parties in many cases. Also, legislation that minimizes the traditional formalities when carrying out commercial contracts. The fact of sharing ties of different natures due to proximity favors understanding between the parties and the comprehension of common scenarios.
Market knowledge and increased competitiveness
Belonging to the same geographical area offers a much closer and accurate vision of the reality of the companies we would like to hire. It also opens the doors to compete with our peers in better condition.
Nearshore and software development companies
One of the business sectors that has seen Nearshore flourish with increasing strength and prosperity is software development. Many North American companies are resorting to hiring personnel in Latin America. More recently, large development companies within Latin America are opening their doors to talent from neighboring countries.
Additional advantages center on:
- Easy access to highly educated technology professionals prepared to meet the challenges ahead.
- People used to work as part of a team.
- Employees with diverse language proficiency.
- Low cost per hour, compared to other options.
The cost/benefit ratio is the most beneficial for both parts, and we assure growth for all .
Hypernova Labs is convinced that cooperation and professionalism is the key to success. Therefore, it is always willing to explore new possibilities, broaden its horizons and bet on new talents and business alliances. We are your best option. Ask us today how to imagine together and build a future!