Tech companies have often turned to offshoring as a way to outsource their development; the idea is to work with a team of developers in another country, typically countries like India or China, where the wages are lower.
However, offshoring comes with a number of prominent disadvantages. For starters, you’ll be working with people literally on the other side of the globe, which means you’ll be stuck dealing with nearly opposite schedules due to time zone differences. You may also experience tough language barriers, making it hard to convey your ideas or work together on a project.
By contrast, nearshoring development allows you to outsource your development work to a country closer to the United States, like Colombia, Mexico, or the Dominican Republic. But why would you make this switch?
The Advantages of Nearshoring
Let’s take a look at the advantages of nearshoring. Compared to hiring your own in-house team or working with people in your own country, nearshoring offers some distinct benefits:
1. Lower development costs. In the United States, developers tend to be expensive. But in other countries, the U.S. dollar goes further; talented, experienced developers can earn a lower salary than their U.S. counterparts, and still be in the upper echelons of earners in their home country. In other words, you’ll get access to similar (or even better) talent for lower costs.
2. More flexibility. You’ll also have more flexibility than you’d have if you only considered hiring development teams in your home country. By definition, expanding your range of consideration to other countries will open the door to a larger number of potential candidates to work with; accordingly, you stand a better chance of finding the perfect partner. Additionally, because you’ll be able to consider organizations and individuals in many different countries, you can optimize your selection for a number of different goals.
Offshoring offers many of these same benefits, but there are also several advantages that make nearshoring unique:
3. Clearer communication. Countries closer to the United States tend to have a higher population of English speakers. Additionally, countries in Central and South America frequently speak Spanish and/or Portuguese, which are highly related to English; in fact, about 30 to 40 percent of all English words have a related Spanish word, or cognate. Compared to languages like Mandarin or Hindi, Spanish is much easier to translate. Accordingly, when nearshoring, you’ll usually encounter fewer communication barriers—and much easier conversations.
4. Higher reliability. In recent years, the reliability of work coming from countries like China has been called into question. There are several factors for this. For starters, development teams looking to outsource often turn to China or India when they want the cheapest possible price; this incentivizes development firms in these countries to “race to the bottom,” offering lower and lower prices, and cutting corners along the way. It’s only natural that the quality of work would drop as well. Paying slightly more for a nearshoring partner allows you to save money while still getting reliable, high-quality work. Obviously, this isn’t a given—you’ll still need to vet your partners carefully, no matter what—but it’s a general trend that makes nearshoring more attractive.
5. Better customer service. Similarly, the combination of these factors means you’ll likely receive much better customer service with a nearshoring development partner. If and when something goes wrong—like finding bugs in the code or missing a deadline—your nearshore partner will be much more willing and able to resolve the issue. They’ll be more attentive and eager to keep your business, they’ll communicate more clearly, and they’ll be closer to your schedule.
7. Smaller time zone differences. Speaking of schedules, nearshoring your development work allows you to keep working with developers in a similar (if not identical) time zone. The gap between India and Washington, DC is 9.5 hours—in other words, you’re running on a nearly opposite schedule. Night and day are reversed for these areas, so collaborating can be difficult. By contrast, the time difference between Colombia and Washington, DC is merely an hour, resulting in minimal (if any) disruptions.
8. Easier travel. Finally, you’ll often find it easier to travel to a country near yours than it is to travel to a country around the world. Travel will be less expensive and will take fewer hours, and when you arrive in the destination country, you’ll have an easier time navigating the language and culture. This is assuming you eventually want to meet the team in person.
Are There Any Drawbacks?
Of course, there are some drawbacks to nearshoring as well. For example, managing the legal and financial complexities of working with a development partner in another country can be challenging; you may have to work with a financial and/or legal advisor to make sure you’re in compliance with rules in both countries, and you’ll need to figure out a way to pay your partner in another country.
For many, the biggest challenge is simply finding a trustworthy partner. How can you be sure this development partner is worth what you pay them? How do you know, for sure, that their team is as robust and experienced as they claim? How do you know you’ll be able to communicate and resolve issues as they arise? Due diligence will take time, but it’s worth doing.
If you’re interested in meeting with a nearshore developer, contact us today! We’ll talk through your current project, learn more about you, and help you understand how our team can help.