The Advantages of Nearshoring


For tech companies, the main allure of outsourcing lies in the promise of improved cost efficiency. Outsourcing’s popular cousin, nearshoring, has been a solid solution for IT companies over the years and still represents a viable staffing option. But the relevance of nearshoring will most likely increase in the months to come because of the Trump administration’s plans for the H-1B visa program, which is vital to the high tech industry.

Technology enterprises are always transforming, evolving and researching to improve themselves, which is why these companies spend generous amounts of money on recruiting the best teams.

That’s where the outsourcing concept comes to life; a company engages another organization to do some of its work rather than using its own in-house employees. Teams built across the border can get the same job done less expensively while addressing issues that IT companies are having in the current environment.

The tech world is known for pushing forward and past what’s previously been established to pursue a different norm. That’s why IT is so keen to look beyond borders to find the most qualified talent without regard to geographical limitations. To have the entire world as your contracting pool is the best way to face one massive issue in the tech world: the lack of talent per vacancies available. IT companies have many seats to fill and talent is getting harder to find, especially when time-worn, traditional methods of hiring are used.

What nearshoring offers is a large selection of high quality profiles of people with vast knowledge, a high level of self-motivation and the diligence necessary to work within a multinational company. How can you resist enthusiasm and quality? We can’t ignore that immigrants in Silicon Valley created more than half (44 of 87) of America’s startup companies valued at $1 billion dollars or more, according to the National Foundation for American Policy brief in 2016.

Cost Advantage
It’s the holy grail of arguments for outsourcing, and the reason that companies get interested in hiring people abroad in the first place. To assemble a team of great value simply costs less in Singapore or Argentina than it does in the U.S.

Another consideration for nearshoring companies is the expense of building a business in some cities as opposed to others. Just compare two of the biggest IT destinations: It would cost roughly 66 percent more to maintain the same lifestyle in San Francisco—considered by many to be sacred territory for tech companies—than in Buenos Aires. These cost savings would have a significant effect on a company’s bottom line.

The Importance of Proximity
Hiring teams outside the U.S. has become a must to develop growth and create a fully functioning company. With more work and additional responsibilities, there needs to be increased communication with improved methods of delivery. Time overlap due to widely differing time zones can result in high costs and reduced efficiency.

When teams share time zones and are relatively close, geographically speaking, they can more easily coordinate meetings, book flights and share project progress. This translates into better work efficiency because time management goes hand in hand with budgets and deadlines.

Culture Matters
As stated before, effective communication is the foundation of workplace productivity and its importance increases significantly when you have employees in distant places. However, the presiding culture where your remote teams are based also matters. Nearshoring gives businesses the capability of hiring people who share similar values, work habits and sense of urgency. This is key in solidifying trust among team players who are abroad in the way they approach a task or face a challenge.

Even with all the advantages that nearshoring specific tasks and projects can provide, very few companies have yet to try it. This year represents an opportunity to invest in nearshoring teams, specifically in the tech industry, which is currently experiencing widespread uncertainty in response to President Trump’s clear intentions of reforming the H-1B visa program.

Alex Gonikman