As we all know, one of the work forms that gained greater acceptance during the pandemic is  the “working from home” model. These last few months have forced us to be more creative in the ways we collaborate. We also had to come up with new ideas in the ways we interact as a team. 

The pandemic has also brought the surge of many startups specialized in remote work and forms of online collaboration. Everyday Zoom calls, hundreds of Slack messages, and Trello boards are now naturally incorporated by all of us. 

One industry that has seen significant growth during the past months is Offshoring. In recent years, many business owners have become more accepting of remote work. Although there is a big debate on whether the level of productivity in the office is the same as at home, many businesses have experienced that by creating a results oriented work environment, many positive results can be achieved.

But what is offshoring? Offshoring is the mechanism by which a company transfers its business or technology processes to third parties located in distant destinations. Nearshoring is derived from this term, it is the provision of these services from countries close to the contracting country, generally located in similar time zones.

The correct implementation of a nearshoring strategy requires mitigating some risks. Among them, it is important to choose a company with experience in the industry. For doing so, we suggest doing some research first and asking for some references to make sure we choose the right partner. It is also important to confirm that this company has offices in the US, giving more guarantees of the continuity of the service.

This innovative way of scaling a business raises some questions for many founders and business owners: 

Can someone who is located miles from the office work as efficiently as someone who is located hundreds of miles from the office? 

​​Working from home is not just as productive as working from the office, even more so. A two-year study of analysis conducted by Great Place to Work® of more than 800,000 employees of (listed) Fortune 500 organizations, shows that the majority stated that productivity levels were maintained or were even higher as of remote work.

When considering the barriers of entry workers in other countries have, we can see that many of the hottest jobs on the market have 2 big requirements: To possess the technical skills required by the position and second but not least, to have an advanced level of English. A great internet connection is also fundamental!. As we can see, there are some barriers of entry, but they are not that many.

Does the cost reduction of hiring someone abroad justify the cultural differences between this person and our team?

Some American companies have experienced some cultural difficulties when outsourcing projects to India or Asia. The most significant difference is in the expected results in each culture.

American companies have a culture more focused on achieving a certain goal within a defined time frame. Asian companies have a greater focus on the correct functioning of each part of the process, without having as a fundamental priority the project’s deadline.

There are ways to reduce these disadvantages. Both Latin America and the United States have great European influences in their way of conceiving work, with which there is greater alignment between these two markets.

But let’s not stay with the challenges of nearshoring to Latin America. Let’s explore some of the benefits of this practice, which are not few:

Cost-effectiveness:

One of the most common reasons why companies want to outsource their workforce in countries where the labour hourly cost is lower is of course to save money. For example, Customer Success hourly rates can be up to 70% less than the US depending on the country and position required. Customer Success representatives in Latin America earn on average 70% less than what representatives with the same position receive in the US.

Time Zone Alignment:

Another consideration is the time difference between office locations. One of the biggest advantages of nearshore outsourcing is the proximity of the different teams. By being in the same time zone or in a very tight time zone, you avoid teleconferencing problems like working hours, line-up meetings and longer trips. In addition, companies do not have to wait twelve hours for a response or speak to the development team.

The traditional outsourcing business model – created by providers based in countries like India and low cost professionals – is becoming obsolete. Companies no longer consider cost savings as the only factor when outsourcing their services, according to the World Report on the Outsourcing and Offshoring Industry prepared by PwC. 

Companies also require their service providers to have a worldwide presence, to know their sector of activity and that their workforce works in the same time zone. It is no longer enough to outsource certain services to any country, regardless of its remoteness. Outsourcing providers have realized that they must be face to face with their clients.

Talent Pool:

For US companies, nearshoring locations span all of Latin America. Spanning Central and South America and including more than 11 countries known as technology hubs, the region possesses a diversity of people and cultures. Higher levels of diversity also fuse new approaches to problem solving, innate adaptability, and more creative innovation. 

In addition, these rising technological powers are investing in their infrastructure to continue offering the best creative talent. For example, Mexico now offers tax breaks and funds to “help the creative industry,” while Colombia is betting on an investment of USD $ 6.5 billion to “define the economic nexus of the creative and digital industries, combining the rich heritage culture of Colombia with its high-tech value proposition.

If you have any questions regarding nearshoring don’t hesitate to book a call with one of our experts.