Advantages and Disadvantages of Nearshore Outsourcing

Outsourcing talent is a great way for tech companies to hire top-tier software developers and engineers for their remote teams. At Mismo, we advocate for nearshore outsourcing because of its time and cost efficiencies. Nearshore outsourcing does have its drawbacks too, though. Read on to learn about the advantages and disadvantages of nearshore outsourcing.

Nearshore Outsourcing vs. Onshore and Offshore Outsourcing

Let’s start by defining what we mean by nearshore outsourcing. When companies use nearshore outsourcing, it refers to sourcing remote team members from nearby countries with similar time zones. Nearshore outsourcing is often compared to onshore and offshore outsourcing, while onshore outsourcing refers to sourcing team members from a company’s home country and can be quite costly. Offshore outsourcing refers to sourcing team member from distant countries with prominent differences in time zones. Often chosen because of its affordability, offshore outsourcing presents communication challenges due to differences in time zones and language barriers.

Learn more about the difference between nearshore, onshore, and offshore outsourcing here.

Advantages of Nearshore Outsourcing

Nearshore outsourcing offers plenty of advantages for tech companies:

Similar time zones for ease of communication

When working with a remote software development team, it’s beneficial to be located in a similar time zone so the majority of working hours between your remote software development team and your company overlap. If something on your site breaks or needs immediate attention, waiting hours to fix the issue is valuable time you can’t afford to lose. Sharing work hours, or at least a percentage of them, with your remote software development team means better and more efficient communication for all.

Cost savings

Outsourcing software developers using a nearshore method is more cost effective than using an onshore outsourcing method. A site architect in North America might cost between $100 and $125 per hour. But in Latin America, that same architect would only cost between $45 and $75. Plus, when you source to Latin America, it’s more likely that you’ll find top tech talent quickly because companies like Mismo maintain a steady pool of developers, even when they aren’t assigned to jobs. Companies in the United States often don’t do this because it’s too expensive. Learn more about developer costs and salaries here.

Smooth integration into your existing team

Similar time zones usually mean cultural and language similarities, too. These similarities make it easier for your remote software development team to integrate with your existing team quickly and easily. Latin America’s proximity to the United States has created cultural similarities between the countries.

Short flight times and easy in-person communication

It can be extremely beneficial to have face time with your remote teams at the start of a project, or on a periodic basis for check-ins. When you outsource talent using a nearshore model, this is easily accomplished because flight times between Latin America and the United States are relatively low, especially compared to flights that would be necessary using an offshore outsourcing model.

Main disadvantages of nearshore outsourcing

While nearshore outsourcing has many advantages, there is one main disadvantage that may impact some tech companies:

Can be expensive compared to offshore outsourcing

The primary drawback of nearshore outsourcing is that it can still be expensive compared to sourcing talent offshore from countries with larger labor pools like India. However, the improved quality of work and the ease of communication and integration that nearshoring offers makes the extra cost of nearshore outsourcing worth it.

Close isn’t always better

While having teams in similar time zones is mostly a benefit, there can also be drawbacks. Often, having teams in completely different time zones can provide for quick solutions to off-hours emergencies, enhanced capability for 24/7 development and more.

To discover how Mismo can help your business grow a talented remote team of software developers and engineers, get in contact with us today.

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