Top 8 Benefits of Nearshoring Your Software Development
Sometimes your startup’s biggest advantage is right next door. Well, not literally next door, rather, nearshore (yes we’re poets, too). In this article, we’ll be analyzing the benefits of nearshoring your software development efforts.
What is nearshoring, you say? It’s the practice of transferring some or all of your software development processes to countries that are geographically close to the startup’s home base and thus within the same or nearly the same time zone.
For example, for startups and companies based in the United States, the talent pool of developers in Latin America makes this region extremely attractive for nearshoring. Latin America has a robust technical infrastructure and many countries are politically stable. This makes it an ideal place for nearshore work that requires a high level of expertise. If you are based in Western Europe, then places like Ukraine and Romania would be considered “nearshore.”
Nearshoring provides many advantages that make it an appealing option for startups of all sizes. In this article, we will describe nearshoring’s benefits and help you understand if nearshoring is a good option for your startup or high growth company.
List of Content
- The Key Benefits Of Nearshoring Your Software Development
- When to Choose Nearshoring for your Startup?
- Offshoring vs. Nearshoring vs. Onshoring
- How to Implement a Nearshoring Model for Your Software Development?
- TurnKey Is an Expert In Nearshoring
- How to Find a Reliable Nearshoring Provider for a Startup
The Key Benefits Of Nearshoring Your Software Development
Nearshoring offers many advantages for startups and high growth companies, but the ones you’ll hear the most from CTOs at a cocktail party include:
#1. Lower costs
A recent survey by Deloitte found that a vast majority of technology businesses are considering nearshoring to cut costs since wages and salaries are typically lower than in your home country (especially if you are based in the United States or Western Europe). The cost incentive is so motivating that the overall offshore market is even expected to grow by $40.16 billion over the next five years.
#2. Time saver
One of the biggest benefits of nearshoring is that it can save startups a great deal of time and hassle. Staff at headquarters don’t need to wait until the next day to get a response from their team members in a far away time zone; instead they can collaborate in real time.
#3. Better workflow control
When operations are located close by, managers can more easily keep tabs on progress and ensure that quality standards are being met. This is particularly important when it comes to software development where quality control is so essential. In addition, having closer supervision of nearshore operations can help to identify and resolve issues more quickly, reducing the risk of problems cascading out of control. As a result, nearshoring can be an excellent way to improve workflow control and ensure that operations run smoothly.
#4. Improved code quality
When teams are located close to one another, they have a better understanding of common goals, culture, language, and values. This gives them a more targeted and focused approach, which leads to improved code quality. Additionally, preferences, localization, and regulations are all made easier because of closer proximity. As a result, nearshoring is an ideal solution for startups that are looking to improve the quality of their deliverables.
#5. Expanded talent pool
As the world becomes ever more connected, nearshoring is likely to become an increasingly popular option for startups seeking to expand their pool of software developers. Local markets are usually fished out and demand higher wage rates. Nearshoring can benefit startups by allowing them to find more skilled developers, broadening their horizons, and increasing their chances of finding the right fit for their needs.
#6. Accelerated integration and onboarding of new developers
When developers join a startup, it’s important to be able to quickly and easily integrate them within the company culture. For remote developers, this can be a daunting task. However, when nearshoring, startups can connect new members with the existing team more quickly. This accelerated integration and onboarding of new developers can help reduce the overall time it takes for someone to feel like a valuable member of the team. Additionally, it can also help to create a more cohesive team dynamic by building relationships from the start.
#7. Limited time-zone differences
Another significant benefit to nearshoring your software development is that it eliminates the concerns that come with working with a dev team in a different time zone. When you nearshore, you can rest easy and be assured that everyone is on the same page because you’re all working during mostly the same hours. This can be a major benefit for startups that are looking to nearshore some of their work but are worried about time differences causing issues.
Additionally, your development teams can avoid the fatigue and burnout that comes with working overnight shifts. As a result, nearshoring can lead to both improved work quality and increased worker retention.
#8. Enhanced cultural fit
It can be much easier to communicate and discuss things when everyone is in the same time zone. There is also the benefit of being able to meet in person if needed, which can help build better relationships and trust amongst the team as a whole. Additionally, there is usually a greater understanding of each other’s culture and context when working with someone who lives in the neighboring country, which can make communication and collaboration much more smooth.
When to Choose Nearshoring for your Startup?
For all the reasons listed above, nearshoring is – not surprisingly! – extremely popular with startups and high growth companies.
Nearshoring helps startups develop or reinforce their software development team, improve overall productivity, and fill the skill gaps of locally-based developers. Nearshoring can also help introduce new processes and avoid cultural and time-zone differences within remote teams.
This all means that the answer to “when to choose nearshoring” is pretty much “always.” The only times we’ve seen where nearshoring isn’t a good option is when the technology (like defense software) must contractually be built onshore.
Offshoring vs. Nearshoring vs. Onshoring
The decision of whether or not to offshore your is a complex one, and there are many factors to consider, including where your offshore partner is based. Offshoring, nearshoring, and onshoring all have their advantages and disadvantages–let’s check them out:
- Offshoring. Offshoring usually leads to big cost savings, as wages and taxes are typically lower in distant countries. However, distance can also be a challenge, and communication may be more difficult. There is also the risk that cultural differences could lead to misunderstandings as well.
- Nearshoring. Nearshoring (which is really just a subset of offshoring) offers all of the same benefits as offshoring, but with fewer distance-related challenges. Communication may still be an issue, but it will likely be easier than with offshoring to a far away country. Additionally, there is typically less of a cultural gap to contend with.
- Onshoring. Onshoring is often seen as a way to address some of the concerns that come with offshoring. Hiring close to home can reduce the risk of communication problems and cultural misunderstandings. However, it is important to remember that onshoring generally leads to higher costs, including labor, taxes and benefits.
There are many factors to consider when deciding whether to outsource, offshore, or onshore your business activities. Here are the most important factors to consider:
Cost is often the most important factor when deciding whether to offshore, nearshore or onshore. Offshoring and nearshoring are usually much cheaper than onshoring due to reduced costs from labor, tax and benefits.
#2. Client control
When you transfer a business activity, you give up some control over that activity, and indeed onshoring gives you the most control over your business activities. But if set up the right way, offshoring and nearshoring can give you the same level of control–you just need to be sure you get a fully dedicated team from your offshore partner and not one that is part-time (like you see with outsourcing).
Offshoring and nearshoring offer the most flexibility since you can easily scale your teams up and down as business needs change or evolve. In America and Western Europe, hiring and firing team members can sometimes be so bureaucratic that you are forced to move much more slowly.
#4. Time zone alignment
If you offshore a business activity, you will need to take time zones into account when planning and coordinating work tasks. This can be a challenge if there is a significant time difference between the parent company location and the cost-effective location. Onshoring and nearshoring avoid this issue altogether as businesses can operate within their time zone without needing to coordinate with other time zones.
Quality is another consideration when nearshoring or offshoring business activities. If you don’t optimize your offshore process, you may sacrifice some quality in exchange for lower costs or greater efficiency. However, if you hire the best talent that was custom recruited for your product and pay attention to the quality assurance process, you still will be able to maintain the high quality no matter what hiring model you choose.
#6. Bigger talent pool
Offshoring and nearshoring bring the huge benefit of being able to tap into a broad talent pool. With onshoring you are limited to those developers that live within your home country, and this market is usually highly competitive, resulting in limited supply.
#7. Easy access to specialists
Sometimes a startup or high growth company needs a technical specialist that is akin to a needle in a haystack. But if you try to onshore this position, the needle becomes even smaller. With offshoring and nearshoring, the haystack is what becomes smaller instead, and many more needles are added to the pile to boot! In other words, you greatly increase your chances of getting a hard-to-find specialist if you start your search with a much bigger geography.
How to Implement a Nearshoring Model for Your Software Development?
If you’re considering nearshoring your software development, here is a standard playbook for implementation:
- Define your business goals. What are you hoping to achieve by nearshoring? Write it down as a team.
- Partner with a high quality nearshoring company like TurnKey. Many companies offer nearshoring services, so it's important to do your research and find one that's a good fit for your business and has a strong reputation.
- Ensure that your team is being custom recruited. Don’t let a potential partner convince you to use a developer off their “bench.” Instead, find a partner that builds your team from scratch around your needs.
- Confirm the best-selected candidates. Your partner should come back to you with a range of pre-screened candidates for each desired role. Be sure to be involved in the interview process.
- Onboard and integrate. Once you have your team recruited, be sure to integrate them seamlessly into your team and make them feel welcome. Do not isolate the offshore or nearshore development team and provide them with meaningful tasks that have impact on the overall product direction.
TurnKey Is an Expert In Nearshoring
As discussed, nearshoring is a great way to tap into new markets and talent pools, and with the right partner, it can be a huge success for your company.
TurnKey is a different kind of nearshore software development company. We custom recruit your dedicated software development team, and we are super transparent when it comes to pricing, so you’ll always know exactly what you’re paying for.
We believe that our approach is the best way to get – and keep! – development talent. Our recruiters are experienced in finding the best developers for your needs, and our account team is based in Silicon Valley so there is always someone local to call to provide support and guidance throughout the process.
Contact us today to learn more about how we can help you get the most out of your nearshore software development efforts.
How to Find a Reliable Nearshoring Provider for a Startup
There are a lot of things to consider when finding the right nearshore partner, from cost to quality of service. However, with a little research and due diligence, it is possible to find a provider that meets all your needs.
Here are a few tips on how to find a reliable nearshoring services provider for your startup or high growth company:
#1. Do your research
When it comes to finding a nearshoring services provider, it is important to do your research. This means reading reviews, speaking to other startups who have used the service, and getting a general sense of the quality of the provider.
#2. Consider cost
Startup budgets are often tight, so it is important to consider cost when choosing a nearshoring services provider. Make sure to get quotes from several providers and compare prices.
#3. Consider quality
In addition to cost, you should also consider the quality of the service you will receive. Again, speaking to other startups who have used the service and reading online reviews can help you get an idea of the quality you can expect.
#4. Find a provider that suits your needs
Not all nearshoring service providers are created equal. Make sure to find one that offers the specific services you need and that has experience working with startups like yours.
#5. Ask questions
Once you’ve narrowed down your choices, make sure to ask lots of questions. This will help you ensure that you are choosing the right provider for your needs.
Following these tips should help you find a reliable nearshoring services provider for your startup. With a little research and due diligence, you can find a provider that meets all your needs and helps you take your product development efforts to the next level.
Technology companies have long been pioneers in nearshoring and have enjoyed the benefits of global talent pools and greater efficiency. Google, for example, relies on nearshoring to localize its products and services for different markets. Slack has utilized nearshoring to build user experiences quickly and more efficiently. Lyft has used nearshoring to expand its engineering team as it rapidly grows into new markets. As the benefits of nearshoring become more widely known, even more startups will likely begin to utilize this cost-effective and high quality solution.
The main driver of nearshoring is to reduce labor costs and have an extended team in a similar time zone, while still maintaining similar levels of quality control and communication that would be expected from onshore employees or contractors. In recent years, nearshoring has become an increasingly popular option for startups looking to reduce costs without sacrificing quality.
One of the main advantages of nearshoring is that businesses can tap into a greater pool of software development talent. By expanding their search to include nearby countries, companies can find developers with the skills and qualifications they need. In addition, nearshoring can help to dramatically reduce labor costs; in many cases, wages in neighboring countries are lower than they are in developed economies. As a result, nearshoring can be an effective way for companies to cut costs without compromising quality or speed.
Offshoring is when you hire a team or an individual in another country, usually one that is far away. Nearshoring is when you do the same, but in a geographically closer country in a similar time zone. Onshoring is when you hire developers in your own home country. Each model has benefits and drawbacks, so it's important to choose the right one for your specific needs and objectives.