Outsourcing is becoming increasingly popular with companies looking to accomplish more with fewer resources. It has been a tool for many StartUps to mitigate labor shortages and recruit and hire talented professionals to fill in remote positions.
When it comes to outsourcing, you have a lot of options. You can send your work across the world, but there are better options than that. If you're looking for a way to reduce costs and improve quality while keeping your team close at hand, nearshoring could be the answer for you.
But what does it mean?
Nearshoring is a type of outsourcing that occurs when companies move some or all of their operations closer to home—usually within a few miles from the headquarters, and typically in a nearby country. Nearshore is outsourcing at your doorstep, and it is a great solution for hiring talented professionals in a cost-efficient way.
It can be 40% cheaper than hiring in the US due to a lower cost of living, but there are a few things you need to consider:
You want to make sure your nearshoring partner speaks your language, and they also need to speak the language of the client they're working with. This is especially important when dealing with clients who are in different time zones or have different cultural backgrounds than your company.
If you're working with professionals who are in a different time zone, it can be difficult for them to communicate during regular business hours—especially if you are not on the same continent. Make sure your nearshoring partner offers teams with many overlapping hours.
Nearshoring partners should understand that cultural differences might arise between them and their clients and partners. It's important that everyone is on the same page when it comes to cultural differences so that no one feels left out, so outsourcing to countries with a similar way of thinking and behaving helps communication and facilitates the day-to-day business dynamics.
Companies that outsource work to a foreign country must be aware of local rules regarding labor laws. Some countries have strict labor legislation for working hours, maternity and paternity leaves, holidays, vacations, dismissal regulations, etc. If you want your partner to respect your country’s holidays, for example, this should be brought up for discussion beforehand.
If there's one thing we've learned from our experience with nearshoring, it's that labor risks are always present when dealing with international hires—so make sure you have a plan in place to mitigate these risks!
We recommend hiring outsourced professionals through an experienced partner, not directly through a contractor agreement. In most Latin American countries, for example, if a direct contractor files litigation against an international company, courts usually rule in favor of the local professional, considering the local rules, even with a signed agreement. Having an experienced Outsourcing Partner as an Employer of Record protects your company from potential liabilities. They can also help identify potential issues before they become problems.
When you decide to outsource your business, you want to make sure the process is as smooth and seamless as possible. Having a trusted and transparent partner is key to having a successful experience.
Once all risks are mitigated, no matter what business you're in, nearshoring services have a lot to offer and guarantee a sure way to future-proof your company and drive sustainable growth.