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How To Unlock the Power of Nearshoring

Over the past decade, nearshoring has quickly gained ground among businesses looking to increase their efficiency. It’s easy to see why. Beyond the potential cost savings, partnering with a nearshore company can open new talent markets, maximize resilience in the face of possible disruptions, and streamline operations across the board.

Put like that, it becomes obvious that harnessing the potential of nearshoring has become imperative for unlocking sustainable growth and maintaining a competitive advantage. Yet, that’s far easier said than done. Even in a field as dynamic and flexible as the software industry, engaging in a successful nearshoring partnership can be tricky.

Here are some things to know if you truly want to unleash this offshoring model’s full potential

Keep an eye on attrition 

You don’t need me to tell you that high employee turnover is bad for business. If you’re constantly changing people in your staff, then you’ll never build a true team. That’s why it’s crucial to seek a nearshoring partner capable of delivering a stable team, with which you can build a fruitful and trusting relationship.

You might be wondering how you can do that — you’re hiring talent through a nearshoring staffing company, after all. This means that your relationship with the outsourced team has a middleman that manages a lot of aspects concerning the employee experience. What can you do to make sure that your nearshoring partner keeps the attrition rates low?

Well, it’s all about the research you need to do before hiring a nearshoring company. Before you commit to a particular partner, read online reviews from employees to identify how happy they are with how things work in their company. Also, checking the experience from the company’s actual clients can open your eyes and help you see whether there’s a revolving door in the partners you’re considering.
 

Analyze cultural similarities and differences

One of the main issues with traditional offshoring is dealing with the differences between you, the hiring company, and your partner, usually a company based in a far-off country. 
These discrepancies might vary but they all stem from the same origin: underlying cultural differences.

People from around the globe have different work philosophies and approaches, and these variations can truly impact your collaboration with your outsourcing partner. 
That’s why so many businesses are reshoring their operations to nearshore providers.

It’s easier to work with people that not only understand but share your vision about work, both in a conceptual and functional manner. Professionals from nearby countries and regions have more overall affinity with your values and traditions, which is why collaboration with them flows more smoothly.  

Does that mean that any country close to you can be a great nearshoring destination? Not necessarily. Let’s think about that. If you are based in the US, you might be tempted to outsource operations to Mexico, given the close proximity both countries share. However, you can look further south and find the same similarities with some extra benefits.

Countries like Brazil, Argentina, Colombia, and Bolivia all have thriving nearshoring industries that share US time zones, have vast talent pools, and even provide incentives to nearshore partners. What am I trying to say here? While Latin America is the evident option for US-based companies, it’s important to consider something more than just the distance between the countries: there might be more similarities and differences than you might think that you definitely need to account for if your nearshoring venture is to succeed.

I’d also like to mention that, besides cultural differences and similarities, you should pay attention to potential language barriers. It’s true that the global outsourcing industry has defaulted to English as the main language of communication but it’s just as true that there are countries and regions that have a higher English proficiency. That’s particularly true for Latin America, where the majority of professionals in nearshoring are bilingual.


Aim to build sustainable relationships

First and foremost, it’s important that you see the nearshore company you’ll hire as a true partner. While a lot of us (myself included!) sometimes talk about “providers” or “vendors”, the reality is that what you get from nearshoring is a lot more than that.

Think about it. You’re hiring people or even a whole team to take care of certain tasks or projects that can impact your company in many ways. Their challenges will be yours, just as their breakthroughs. What’s more, a nearshore team can get to know your company and your vision over time, providing you with extra value you might not get if you change vendors often.

It’s pretty clear what I’m getting at here: you need to establish a solid relationship with your preferred nearshore partner. See beyond transactional engagements and focus on cultivating an enduring alliance capable of yielding that long-term value for both parties involved.

How can you do that? Here are some pointers that, in my personal experience, can take you there:

Challenges you might face

If you read all of the above closely, you surely pinpointed the challenges that appear in different stages of your relationship with a nearshoring company. These are far from exhaustive. In fact, there might be very specific challenges you might not be able to foresee. Yet, unlocking the true value of nearshoring means you’ll have to remain vigilant to detect when issues arise while also being prepared to deal with their impact.

From problems with service infrastructures to language barriers to strict industry or local regulations, there are many challenges you might face when partnering with a nearshore company. Each of those will require you to adapt your perspectives and flexibilize your operations. But there’s something you can do right off the bat to lessen the impact of these issues.


You should partner with a reputable and experienced nearshore company.

While it’s impossible to anticipate everything that may go wrong throughout your partnership, a seasoned nearshore team will help you avoid common pitfalls while also empowering you with unique insights. I know this because, after almost two decades of working with remote teams and leading a nearshore development company in Latin America, I’ve seen potentially great partnerships go to waste simply because the parties involved were too focused on short-term results rather than on the long-term gains that come with fruitful alliances.  

My experience has shown me that if a nearshore company provides its team members with training and career opportunities, adhere to strict communication and security protocols, embrace agile methodologies, and go above and beyond to offer extra value, then you got yourself a long-term partner you shouldn’t let go.

That’s what you need if your goal is to further your operations through nearshoring: a true partner capable of enriching your way of working and paving your way to growth and success. If you have that, all the rest will become far easier and your nearshoring experience will truly shine.