Nearshore development is a modality of outsourcing that may boost your business results. Learn how to do it effectively!

You are probably already familiar with the idea of outsourcing development. Many startups choose this arrangement as a response to the current difficulty in finding talents that fit both the company's needs and budget. Through this move, they gain access to qualified and flexible professionals.

However, if you ask around, you will notice that many CEOs still have restrictions in adopting this modality, much because of unsuccessful experiences in developing countries. It is true: there are some pitfalls in outsourcing.

So, if you decide to adopt this model, you must rely on a trusted partner and understand precisely where to allocate your investments.

In this scenario, nearshore outsourcing emerges as a fascinating solution. In this text, we will tell you more about this category and list its main benefits. Read on!

What is nearshore outsourcing

There are three basic models of outsourcing: onshore, offshore, and nearshore. The first two refer, respectively, to activities performed in the national territory and in distant countries, such as those located in Asia. Both indeed produce advantages, but they also pose significant challenges.

Outsourcing in the domestic market, for example, means dealing with shortages of suitable professionals and with rising costs. These problems are somewhat reduced when we talk about distant countries, but then we need to consider obstacles such as linguistic and cultural barriers, in addition to completely different time zones.

Nearshore, therefore, appears as a third option. As the name implies, this model focuses on countries geographically closer to the United States, such as Canada and Mexico.

Other Latin American countries have also been standing out in the supply of professionals for software development projects. Here, we are not talking about fully developed regions, which may cause uncertainty for some people.

However, it is essential to understand what outsourcing in developing countries may represent to your business, if you follow the best practices. Check out the following topics!

The state of outsourcing in developing countries

Outsourcing in countries that are not fully developed may seem like a risky idea at first glance. However, with the help of a trusted partner, you may extract many benefits from it.

This is a movement currently carried out with increasing frequency by companies of all sizes, mainly because of some particularities.

The exchange rate is one of them. Most of these countries' currencies are extremely undervalued against the dollar, making the operational costs much more affordable. But there is no point in paying little but receiving poor quality, is there?

For this reason, it is vital to identify markets in specific countries that have the political and economic conditions to provide qualified labor.

This is the case, for example, of Chile. With a territory slightly larger than Texas, the country is home to the best university of South America and generates thousands of computer science professionals annually.

Countries like Chile have been attracting the attention of American companies for providing cost-effective and qualified labor. However, it is not enough to target any country that outsources professionals and expect great outcomes.

Nations such as Malaysia and Taiwan, for example, would fall into this category, but they bear the offshore drawbacks we have already mentioned. The ideal, therefore, is to focus on nearby regions, as we will show below.

The benefits of investing in nearshore

If you are cost-driven, the first benefit of investing in nearshore is very evident: reduced expenses related to the selection, hiring, and retention of professionals.

We are talking about the access to cost-effective labor and the possibility of partnering with outsourcing companies that will manage this whole process for you.

Moreover, even without a mediator, this model greatly facilitates communication between your startup and the professionals you need to hire.

Closer timezones make it easier to schedule meetings, follow work processes, and monitor compliance with deadlines. As an example, São Paulo, the largest metropolis in South America, is only two hours ahead of Florida.

This proximity also opens space for other possibilities. For example, it is more manageable to schedule face-to-face meetings with potential partners and even bring professionals to work alongside your in-house teams.

Apart from being considerably more accessible, flights to nearshore countries are much shorter than those to Asia, Europe, etc.

Another key aspect is cultural similarity. Countries that are geographically closer to the USA tend to share resembling cultural traits. This makes it easier to integrate new professionals into your business, both in terms of working with other members and adapting to the methodologies used in your projects.

Why consider Latin America?

Latin America is brimming with top-notch professionals who are more and more tempted to work for companies abroad due to the region's economic instability. We are talking about software engineers, designers, and other IT experts with skills comparable to those eagerly sought-after in the domestic market.

Similar skills, different costs. One of the reasons for that has to do with the recent pandemic crisis. Latin American countries are among those that have suffered most, both in economic and health terms, from the Covid-19 outbreak.

As a result, the region's currencies are reaching historic levels of devaluation. For example, one dollar is now equivalent to about 5.65 Brazilian Reais, or 90.70 Argentinian Pesos.

Naturally, this boosts your investment power and guarantees greater competitiveness in the search for professionals.

But it is important to remember that low-cost must be accompanied by low-risk. After all, the focus should be on scaling your team according to a quality standard. In Latin America this is absolutely possible.

Brazil, for example, is home to the largest population of Java developers in the world. Its IT higher-education programs, regarded as high-level, graduate more than 100,000 experts per year. Like many of its neighbors, the country has been exporting professionals to different regions of the planet, be it remotely or not.

Nearshore development is an effective solution to overcome the talent shortage in the domestic market and the offshore obstacles. Countries like those located in Latin America provide high- quality professionals for low costs. Besides, their cultural similarities and close timezones propitiate a more favorable arrangement for managing your outsourced talents with excellence.

Augmenting your staff is not such an easy task, but you can do it by following the best practices.

Ready to learn more? Check out our post on how to scale your development team!