What is nearshoring?

Nearshoring is a business strategy in which a company outsources some of its business processes, IT services, or software development tasks to a service provider located in a nearby country. This approach is often chosen over offshoring, which involves outsourcing to a service provider in a more distant country.

Some of the advantages of nearshoring include:

• Proximity: Nearshoring allows for closer collaboration and communication between the client company and the service provider due to geographical proximity. This can result in better understanding of the client's requirements and faster response times.

• Time zone compatibility: Nearshoring to a nearby country often means working in the same or similar time zones, which can facilitate real-time communication and collaboration.

• Cultural affinity: Nearshoring to a country that shares a similar language, culture, or business practices can help to overcome communication barriers and facilitate smoother working relationships.

• Cost savings: While nearshoring may not always offer the same cost savings as offshoring, it can still provide cost advantages compared to onshoring, especially when it comes to labor costs.

Some popular nearshore outsourcing destinations include countries in Eastern Europe, such as Poland, Romania, and Ukraine, as well as countries in Latin America, such as Mexico, Brazil, and Argentina. These countries offer a skilled workforce, competitive labor costs, and relatively close proximity to many Western European and North American businesses.