Nearshore Outsourcing: Software Expertise, Talent, and Growth
It’s said that every company is now a tech company. And that means business leaders need the best tech talent.
In 2021, countries across Latin America saw a rapidly growing software outsourcing industry, including roughly 500 thousand software developers in Brazil and more than 100 thousand in Argentina, according to Statista. Across the region, from Panama to Chile, Colombia to Costa Rica, nearshore outsourcing has been on the rise — and it’s showing no signs of slowing down.
It’s a hotspot for talent, and business leaders in North America are certainly taking notice, turning to nearshore outsourcing companies to fill in the gaps. The Great Resignation, during which full-time employees have been leaving their jobs at unprecedented rates, has played a role in this, but even before that, nearshore software development was reaching new heights.
Nearshore outsourcing explained
Nearshore outsourcing is a model in which businesses partner with organizations in nearby countries to help them complete projects. For the U.S., these nearshore outsourcing companies are typically in Latin America.
Businesses choose nearshore software development for a variety of reasons. They might be missing critical skillsets or talents in-house. Or, they need to complete a project quickly and don’t have enough team members to ramp up development. Because nearshore development teams specialize in filling in the gaps and scaling teams fast and skillfully — even on short notice — they have become more and more popular as an option. Moreover, leaders are increasingly finding they need to focus on their core business, and a staff augmentation company gives them back time while they hire, support, and work to retain talent for them in the meantime.
Why is nearshore software outsourcing such an attractive option?
There are countless advantages to using a nearshore software development company, particularly in LATAM. First, these providers typically have numerous cultural similarities with businesses’ countries, given their geographic proximity. They are also timezone-aligned, meaning communication can happen in real-time, and partners can respond quickly if and when emergencies arise. This contrasts with offshore outsourcing, in which businesses could be working with partners across the world.
As projects have gained complexity, and more and more technology workers are leaving full-time roles, nearshore services have become an increasingly attractive option for so many businesses. They are recognizing how staff augmentation partners like Nearsure provide vast talent pools across LATAM, ramping up teams fast thanks to a remote-first culture.
In recent years, many countries in LATAM have invested heavily in producing skilled software professionals. Several are incentivizing students to pursue computer science and related majors in college, leading to sky-high numbers of tech graduates. Plus, some tech giants, including Facebook and IBM, have set up offices in the region, as have startups, marking Latin America as a tech hotspot.
Nearshore outsourcing businesses have proven to have strong technological ecosystems. But a nearshore company offers additional advantages, contributing to the enormous growth in the sector. For example, there’s the cost reduction factor. A nearshore company in a region like Latin America is usually a far less expensive option than onshore providers in the United States — not to mention in-house, full-time developers.
Yet another reason why LATAM has seen an influx of demand for software outsourcing? Language skills. It’s certainly true that offshore partners had all but a monopoly on technology outsourcing in past decades, but English competence has played an enormous role in the growth of nearshore partnerships.
According to the EF English Competence Index 2021, several countries in the region, including Argentina and Costa Rica, exceed offshore outsourcing destinations like China and India in terms of English skills. This means stronger communication and less confusion — critical for a thriving partnership.
Top tips for outsourcing to a nearshore company
Although the nearshore software development outsourcing industry has grown significantly in recent years, for many businesses the arrangement is still a new one — at least, new to them. Therefore, it can take some guidance and getting used to before you are fully comfortable with the system.
Trust is foundational to and imperative for any partnership. But even though prospective companies are relatively close in terms of geographic proximity, you’re unlikely to meet potential partners face to face. How, then, can you build trust and become comfortable with the arrangement?
At Nearsure, we have worked to established that trust by cultivating a long-term presence in the U.S., although our distributed base is across LATAM. It is that long-term presence you should be on the lookout for — those well-established relationships with peer businesses — that you should look for when carefully vetting the nearshore company.
Begin by taking stock of the skill gaps and needs within your own organization. This will help you guide your search and know what to look for. Then, you can focus on companies that specialize in these particular areas.
The good news is that as the nearshore services industry has grown, so, too, have resources that help businesses vet potential partners. Look on websites like Clutch.co, which provides comprehensive reviews of software and IT companies, to help you find and learn more about prospective partners.
Next, research the company itself, looking through its portfolio and, if you can, speaking with previous or current clients, who can provide testimonials about the company’s expertise and experience.
Remember: you’re not just looking for any qualified nearshore software provider. You want someone with a work style and culture that matches your own. This goes for factors like project management philosophies, communication methodologies, and language proficiency, among other considerations.
Before you sign any contracts, hammer out the details, including service level agreements, approaches, and more. This will minimize surprises, helping you both in the software outsourcing process.
What does nearshore outsourcing mean for your business?
Ultimately, working with nearshore outsourcing companies allows you to focus on your core business activities. Meanwhile, a staff augmentation partner will source the best talent to help you achieve your goals, bringing your trusted engineers to support your needs for the long haul. It’s an ideal solution for companies that need additional help — and more time in their days.
This is why the sector is so strong these days: we simply don’t have the hours and number of employees we need to complete quality projects.
Nearsure, a Latin American staff augmentation outsourcing firm, has the experience and expertise in working closely with North American businesses to help them meet their technology and business objectives. We can assist you with a variety of projects, allowing you to shorten time to market and produce high-quality work.