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Top 10 Benefits of Nearshoring for Your IT Company

March 14, 2023
A female IT developer looking at camera and smiling while using computer with code on screen in software production studio

When your business needs to hire talent outside of your on-staff team, you have more than a few options to choose from. If you want to outsource, you can hire an external team to take advantage of the benefits of nearshoring. They can help with the extra work, complete projects, augment your team, or provide managed services based on your needs. However, where you find your outsourcing team can determine a lot about both your costs and your collaborative workflow.

While many businesses choose off-shoring for the cost benefits, nearshoring is considered the perfect balance between cost-effective outsourcing and conveniently aligned teamwork. This is particularly true when you are outsourcing to an IT company, where having similar standards and strong communication matter a great deal.

Definition of Nearshoring

In the world of outsourcing, you have three options: On-shoring, off-shoring, and near-shoring. As you may have guessed, nearshoring splits the difference between onshoring and offshoring. Onshoring is when you outsource to a company within your own country, sharing all the same standards – and standard costs. Therefore, it has a similar cost threshold to hiring on-staff team members in terms of operation and hourly requirements.

Offshoring is considered a way to save costs by outsourcing to countries with lower expenses, where running an office and paying a fair salary for that country’s standards costs less than it does in your own country. Common offshoring targets include India and China.

Nearshoring, however, is when you outsource to a country that is close to your own geographically. While costs are lower compared to onshoring, there is also far less of a difference in things like time zone, language, and culture compared to offshoring.

The 10 Benefits of Nearshoring to IT Companies

An IT development team discussing project and smiling while enjoying work on software production.

Today, we’re diving into the ten leading benefits of nearshoring IT for your business. Whether you are an IT company in need of tech-savvy partners or a company in need of outsourced IT, nearshoring is a strong choice by splitting the difference between offshoring cost benefits and onshore collaborative capabilities.

1) Cost Reduction

Offshoring has always been a favored option for cost reduction. Nearshoring allows you to outsource to countries with a lower cost of operation and cost of living without making the usual concessions for things like data standards or time zone compatibility. Nearshoring can reduce your overall IT costs by effectively accessing offices that have lower rent, whose equipment is less costly to source, and whose professionals require less expensive salaries to live well in their country. The best part is that you do not have to short anyone on rewarding compensation packages. Not only does the outsourcing model wrap up costs into a convenient service contract, but they also pay their team members a respectable salary based on the nearshore country’s standards for each skill set.

2) Time Zone Compatibility

One of the biggest downsides to offshoring is timezone incompatibility. IT services may be lower cost halfway around the world, but their schedule is also halfway around the world. Technicians in India, for example, are awake when you are asleep and asleep when you are awake, which is not great for collaboration, and inconveniences everybody who attempts a workflow under these conditions.

With nearshoring, you can often access talent within your own time zone or only a few hours difference. For example, the US nearshoring to Mexico or Canada may be in the exact same time zone if your longitudinal coordinates are similar, even if your offices are north-to-south thousands of miles apart. This means they will be awake for morning meetings and answering emails during times you consider to be working hours.

3) Expanding the Talent Pool

Nearshoring also gives you access to a truly expanded talent pool. While IT talent availability may be particularly short in the US, nearshore countries have IT professionals ready to join your team. This is true both for outsourcing and for expanding your staffing horizons. With nearshore hiring partners, you can access talent ranging from admins and techs to developers and coders beyond the talent pools where your competition is still trawling.

4) Greater Team Control

When you are nearshoring, the collaborative benefit of being both in the same time zone and geographically closer gives you more control over your entire team. You have the ability to plan team meetings and collaborative projects without weeks of scheduling ahead of time. Communication and coordination can be handled more easily by your management, and you will have more opportunities to influence the outsourced or augmented staff projects throughout your partnership.

5) Common Culture and Values

One of the greatest benefits of nearshoring is also adjacent cultures and values. For example, Canada and Mexico share similar demographic ranges in which lifestyles are not so different from one country to the next. Not only will you likely all share the same basic range of languages (English, Spanish, and a little French), but you will also typically not have to worry about accidental cultural faux pas or mistranslation events where meaning is lost between cutltural differences. Managing a nearshore outsourced team is far smoother than offshoring for the simple factor of familiarity.

6) Improved Code Quality

Coding, despite it’s technical nature, is also highly dependent on shared language. The code you receive from nearshore IT teams is likely to be both more comprehensible and effectively higher quality than offshore sources. While there are many skilled offshore developers, the shared standards in language, culture, and technology will make nearshore code more inherently compatible with code and workflows developed in your country.

7) Similar Security and Data Standards

Today, security and data standards are paramount. An IT company or company looking for IT partners cannot afford to work with a team who doesn’t understand the strict regulations of network and data security that your company is held to. Nearshore partners are far more likely to be part of the same industry organizations and/or have security and data regulations modeled off the same standards compared to IT outsourcing based further away. And any minor differences between your national standards can be more easily communicated.

This ensures that your company, customer, and employee data is as secure in the hands of your nearshore IT partners as it would be if handled within your own team.

8) Shared Software Familiarity

Have you ever noticed that the popular apps and business software suites across the world are different from the ones you are familiar with? This is because programs written for other languages and cultures naturally thrive among their base audience. Nearshoring allows you to partner with teams that have experience using the software with which you are most familiar. Conflicts can arise just from using two different word processors, much less completely different development environments or industry software structures.

Nearshore IT partners, however, will most likely have used the same software based on your shared culture and language, therefore leading to greater compatibility with your existing tech stack.

9) Easier In-Person Project Planning

Will your team require some amount of in-person collaboration, projects, or shared company events? If so, nearshoring makes it much easier to arrange for everyone to be in the same place and time. Nearshoring inherently means that there will be smaller distances between your team and your outsourced partner, and similar time zones. So that no one is on the opposite end of their usual clock when they arrive.

Whether you are planning a group effort or a shared celebration, nearshoring makes it easier to plan in-person events with your outsourced partners.

10) Market Expansion

Lastly, nearshoring is the perfect way to cast your line into new markets. If you are thinking about expanding to countries near your own, you can do so. Nearshoring allows your company to become familiar with the standards and business requirements in each new market. You can also establish a local team and support structure for the customers. You will soon cultivate in each nearby country. Your nearshore partners can help you establish business in new markets. It will be your first step to building a network in each country into which you will expand.

What Are the Benefits of Nearshoring Compared to Offshoring?

When compared to offshoring, nearshoring offers far more relatable and accessible team members. There will be little to no language or cultural barrier. You will share a similar cluster of time zones. All of your industry experience and standards will be similar as well.

What Are the Main Factors That Companies Should Consider When Selecting a Nearshoring Partner?

When selecting a nearshoring partner, it’s important to look for teams that have experience in your industry. With companies like yours, and working with companies from your home country. These three factors will allow a nearshoring partner to provide you with the best possible collaborative results. Whether you are outsourcing projects, contracting services, or remotely augmenting your team.

If you are looking for an IT nearshoring partner or nearshore software development services, look no further. Parallel Staff has access to a network of IT experts ready to expand your company’s capabilities. Take advantage of the benefits of nearshoring. With nearshore collaboration and outsourcing based on your business’ unique IT needs. Contact us today to explore the right nearshoring services for you.

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