Offshoring? Onshoring? Nearshoring? While all this talk of shores may have you dreaming of your first post-pandemic beach vacation, understanding the differences between these terms may be crucial to helping your software development company grow. The COVID-19 pandemic has proven once, and for all that, there is really no need to have all your team members in the same room. As a result, software companies are increasingly turning to nearshore outsourcing to fill their teams with skilled and affordable talent.

Nearshore Outsourcing for Software Development

Let’s start with the basics. What is nearshore outsourcing? In short, nearshore outsourcing is the practice of delegating work to workers in nearby countries. In software development, this may mean having a nearshore team take the reins on developing an entire product or just take on certain tasks. Many software development companies in the United States, for example, frequently outsource work to Latin American countries such as Mexico, Colombia, Brazil, and Costa Rica.

Offshore vs. Onshore vs. Nearshore

Offshoring, onshoring, and nearshoring are three different models of outsourcing. The difference is in geography. Offshoring refers to outsourcing work to a far-away country: for example, your company is based in the United States and works with a team in India. Offshoring often offers significant cost savings, but logistical challenges can make it more hassle than it’s worth.

Onshoring, on the other hand, means outsourcing work to a different location within your own country. For example, your headquarters are located in California, but you work with a production team based in Tennessee. Working with a team in your own country that shares your native language and culture can be a tempting proposition, but it’s also usually the most expensive option.

The third option, nearshoring, refers to hiring workers in a country that is geographically close to your own. For companies based in the United States, this generally means outsourcing work to Canada or Latin America. For companies in Western Europe, this may mean working with a team based in Eastern Europe.

Why Recruit a Nearshore Vendor?

Nearshore outsourcing may be the best of both worlds, combining the cost-saving benefits of offshoring with the cultural and logistical advantages of onshoring. Let’s take a closer look at how nearshoring can help your company scale by saving you time and money and helping your teams stay productive.

1. Access to an Affordable Team

Nearshore outsourcing can save your company money by providing access to top software engineering talent in developing countries with a lower cost of living. According to Accelerance, outsourcing software development can save a company “between 40% and 75% of its overall costs.”

It’s important to note, however, that nearshoring is typically more expensive than offshoring. But there is always a trade-off. Decreased costs often come with decreased productivity and quality. As the nineteenth-century English thinker John Ruskin once said:

2. Easy Communication & Time Zones

While it is generally the cheapest option, offshoring can be a logistical nightmare, especially for teams with a collaborative workflow. When US-based team members are sitting down to work in the morning, their China-based team members are heading to bed.

Working with a vendor in the same or a similar time zone eliminates this obstacle, making real-time communication and collaboration flow smoothly. For US-based companies, Latin American developers may be the perfect solution. Companies in Texas, for example, share a time zone with Mexico and Costa Rica, and companies on the East Coast with Colombia and Peru.

Language differences can also present a problem for distributed teams. Choosing a nearshore vendor can help. Even though developers in a neighboring country may speak a different first language, there’s a good chance their language is closely related to yours and that you have a shared language in common. Many Latin American countries, for example, invest heavily in promoting and teaching English language skills, and Latin American software engineers tend to have a high level of English.

Although modern technologies like Skype, Zoom, and Slack make it easy to communicate in real-time from afar, sometimes there is no substitute for in-person meetings. Choosing a nearshore vendor that is only a short flight away makes this convenient and affordable. If your company is based in Houston, you might consider working with a vendor in Mexico City, which is only a two-hour flight away.

3. Access to New Tech

Successful software development companies understand that the best developers do not live in any one city, region, country, or continent. Nearshore outsourcing can give your company access to a huge global talent pool. Nearshoring can help you access affordable talent with technical skills that are hard to find in your local market.

4. Similar Regulations

Whenever you build an application, you normally have to comply with certain government regulations. If you’re working with a vendor in a neighboring country, there’s a good chance that they’re familiar with the regulations you’re dealing with—or at least very similar ones. Before choosing a nearshore vendor, make sure that they know how to comply with the necessary regulations.

Best Practices for Finding Nearshore Vendors

Finding the ideal nearshoring partner is not always easy, and you may be wondering where to start. To get the best value for your money and boost your company’s productivity, it’s essential to approach this decision slowly and methodically. Here are some factors to keep in mind as you start to build your nearshore development team:

• Location: Ideally, choose a nearshore vendor in the same or a similar time zone (no more than three hours’ difference). If possible, choose a vendor that’s no more than a few hours away by plane.
• Technical Expertise: What skill gaps have you identified in your in-house teams? Look for a nearshore partner that can fill those gaps.
• Experience: Pick a vendor with a long and verifiable track record. Do they have experience working with clients in your country? Are they accustomed to working on remote, distributed teams? Don’t be afraid to ask for references or code samples.
• Price: Remember that price isn’t everything. Do compare prices for at least a few different vendors, but it may be worth paying a little bit more for a more experienced nearshore team that’s a better match for your in-house team. As the old adage goes, you get what you pay for.
• Language: Carefully vet potential partners for their level of English—or whatever language is primarily used in your company. Don’t rely on candidates’ self-assessments of their language ability; arrange a face-to-face Zoom or Skype interview to be sure.
• Cultural Fit: Consider both the culture of the vendor’s country and of the individual developer or firm you’re considering hiring. It’s always a good idea to arrange a cultural fit interview to make sure the candidate’s behavior, beliefs, and values will fit in with your company’s culture.
• Processes and Methodologies: Be sure to ask any potential software development vendors about their work processes and methodologies. If your team follows an agile approach, choosing a vendor with agile experience will make their transition onto your team all the more easy.

Work with a Remote Software Engineer Recruitment Agency

You’ve probably figured out by now that finding the right nearshore vendor for your company is not necessarily a straightforward task. There are always a multitude of factors to consider when hiring, and it can be especially costly and time-consuming when your talent search spans multiple countries.

Software engineering companies are increasingly turning to specialized remote recruitment agencies such as BetterEngineer to find nearshore talent. BetterEngineer specializes in connecting US companies with top Latin American software engineers. Here are some benefits of working with a remote recruitment agency:

• Time and money savings. A remote staffing agency has an existing database of screened and vetted software engineers and can cut your search time down to a matter of days. BetterEngineer has 10,000+ engineers in their talent pool and can usually send you profiles of 2–4 highly qualified developers in just a few days.
• Flexible hiring options (project-based or long-term, part-time or full-time, hourly or salaried . . .)
• Nearshore hiring expertise. An established nearshore staffing agency like BetterEngineer has many years of experience evaluating candidates for the attributes that matter most for nearshore hiring: technical expertise, workplace methodologies, communication style, language skills, cultural fit, and so on.

Ready to find the right nearshore vendor as quickly as possible? Or do you just want to learn more about how nearshore outsourcing can help your company scale? Connect with a specialized nearshore recruiter today.