The technology industry has been benefiting from offshore outsourcing since the 1980s. Hiring third-party software developers overseas is a proven way to save on costs for your business. However, there are disadvantages; language barriers, cultural differences, and time zone disparities can lower efficiency and make projects more difficult. A new solution arose in the early 2000s — nearshore software outsourcing. It’s an effective midpoint between local or onshore hiring and offshore outsourcing.
What Is Nearshore Software Outsourcing?
Tech companies utilize nearshore software outsourcing by hiring external developers from nearby countries. US businesses often nearshore to Central or Latin America. The goal is to work with a company in a low-cost region that has the same language, similar culture, and a close time zone to your own.
Benefits of Nearshore Software Outsourcing
One of the most substantialadvantages of outsourcing is cost savings. While nearshore software outsourcing may be more expensive than offshore, it still saves plenty of money. These companies are based in areas with lower living costs than in the US. You’ll also save on overhead costs for your business. Instead of building more facilities, purchasing more equipment, and investing in other HR and training resources for new employees, you’ll hire a third party already set up to accommodate your project.
Wider Access to Skilled Employees
Many Latin and Central American companies are rapidly expanding their talent pools in the tech industry. The US faces labor shortages, particularly in specialized fields like machine learning. Other countries now offer extensive university education in these fields. For example, universities in Colombia now produce about 13,000 software developers yearly.
Similar Time Zones
If your company requires 24-hour support, offshore outsourcing can be beneficial. However, if your employees need to collaborate, you might force one group to work in the middle of the night. Nearshore software outsourcing keeps your business focused in the same or nearby time zones. That means all of your employees will work the same or overlapping hours.
Fewer Communication Gaps
Project teams that didn’t share a common language risk miscommunications and lost productivity. Nearshore developers are more likely to be fluent in the same language as your business. Nearby countries include English in their educational programs, and many companies now require that their employees are fluent.
You’ll also find fewer cultural differences between your local employees and those at a nearshore company. These gaps can cause just as many misunderstandings as language barriers; some are more subtle. Culture can affect the written language of projects, designs, and reference points. While each country has its own culture, those in close proximity are more likely to share elements or understand each other.
Easier Remote Management
Remote work has boomed because of the pandemic. Countless digital tools are available to manage employees at separate locations and track projects. If a face-to-face meeting is necessary, it’s much easier to arrange a visit to a nearshore software company than one overseas. There’s less travel time, fewer costs, little to no time change, and less language difference. This also opens the door for in-person audits to ensure that employees are treated well and that your project standards are met.
Upgrade Your Business
Nearshore software outsourcing is a powerful tool. It offers many of the same advantages as offshore outsourcing with fewer disadvantages. Consider whether your tech company could benefit from outsourcing, then research software development companies in neighboring countries. You’ll find dozens of options to upgrade and expand your business.