Hiring a party outside the company has become a great commodity in recent years for many organizations. The three types of outsourcing – onshoring, offshoring, and nearshoring differ from each other. Why is the last one gaining on popularity?
Onshoring and offshoring – a tough choice
Cost-cutting and lack of experts are the most common reasons behind outsourcing. Staying competitive and keeping growth many times means choosing the most economical way of providing services. When you decide to give certain job functions outside your company, you can do it by choosing between companies that operate in the same country as you (onshoring), overseas (offshoring), or in a relatively close country (nearshoring). The choice not only differs in your service provider’s location, as it has more consequences in terms of the possible outcomes.
While onshoring might seem the most attractive choice due to the same cultural background, time zone, and language, the actual savings are usually the lowest. The advantageous position lays in quick responsiveness to market disruptions. Onshoring is a suitable choice for companies based in the big metropolises.
On the opposite pole, offshoring appears as the most cost-saving solution as it takes advantage of cost differentials between countries. Still, it is suitable mostly for less complex services or those requiring minimal collaboration. The downside of deciding to follow this type of outsourcing is the quality, impediments following from time zone differences, cultural incompatibility, and, in some cases, poor infrastructure.
Nearshoring, the golden mean?
Onshoring and offshoring are two extremes, and it is hard to find a balance between high quality and low cost. For that reason, nearshoring seems the right outsourcing choice. According to Hoffmann, Bove, and Rauser, this year, we will witness changes in the outsourcing job market, focusing mostly on nearshoring. Geographical neighborhood carries several advantages. Not having to cope with the time zone differences or cultural discrepancies is a big yes for many companies.
In the pre-pandemic times, nearshoring had another advantage: being close enough to travel so that the team integration could go perfectly. It is less of an option due to travel restrictions right now, but the online meetings can be still held during regular office hours, which is hard to obtain in offshoring. More than that, nearshoring means a similar expertise level which, as a consequence, provides you with knowledgeable and independent consultants. It saves your company a lot of time on, e.g., guidance.
All of it, keeping a high quality of delivery, with increased flexibility that allows you to choose the most suitable setup for your company. You save time and energy, keeping it cost-efficient.
Is nearshoring the right choice for you?
It depends on your needs, the technical capability of your teams, and business priorities. Only you can decide the right way of outsourcing for your company, but you should consider all the advantages of having a workforce that is close to you, as in nearshoring. Most importantly, it would be best if you focused on the outcomes you want to achieve. Nearshoring might be a perfect choice if you are searching for experts specialized in digitization or automation. Having them close to your home will make the work more convenient while keeping the rates reasonable.
To make sure it is the right choice for you, respond to the following questions:
- Do you need to extend the in-house team or to form a new team?
- Are you searching for subject matter experts?
- Have you defined your goals to achieve?
- Do you need remote workers with real-time availability?
- Are you focused on quality consistency?
- Do you want to cut down costs and time spent on hiring?
If you responded “yes” to most of the questions, nearshoring should work like a charm for you. If you are interested in the ServiceNow nearshoring, do not hesitate to contact us. Our teams in Poland have been working in nearshoring since 2010, providing our clients with expertise, dedicated teams, and more – you can check the details here.
Questions? Reach out to us.