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28 September 2022



What is Nearshore Outsourcing? Everything You Need to Know

Outsourcing to far-off locations is associated with a number of challenges such as huge time gaps, cultural barriers, differing work ethics, and more. That is where nearshoring comes into the picture offering a number of services such as nearshore consulting, software development, and more. The definition of nearshoring is basically transferring certain business operations to a remote team in a nearby country. But what does it actually mean for your business and how can you benefit from it? Let us take a look at the major aspects of nearshoring you should know of.

The Problem of Shrinking Talent Pools

According to Forbes, tech job offerings have grown 81% within the past two years while the applicant pool shrunk by 39%. This means that businesses are struggling to hire adequate talent from their local talent pools. This trend pushes them to turn their heads overseas and look for alternative talent pools. So, what is nearshore and how does it help you solve this problem?

What Types of Outsourcing are There?

There are different types of outsourcing that you might consider. Each offers its benefits and drawbacks.

  • Offshore outsourcing – a type of outsourcing in which a client company delegates its business operations to a vendor in a far-off country. For instance, a German company outsourcing its projects to an Indian company is a classic case of offshore outsourcing.
  • Onshore outsourcing – in this case, a client company delegates projects to a vendor located in the same country. A US-based company outsourcing to another company located in the US would be onshoring.
  • Nearshore outsourcing – in this instance, you outsource nearshore meaning to a country located nearby.

Each type of outsourcing has its benefits and flaws. For instance, offshoring is usually the cheapest option but it comes with such problems as time zone gaps and cultural barriers. Onshoring has no such problems but it is much more expensive. Nearshoring is a middle ground between the two options that mitigates their flaws while offering some unique benefits to your business. Let us take a closer look at the definition of nearshoring.

What is Nearshore Software Development?

As said, the definition of nearshore is the same as your regular outsourcing – it means that you delegate certain business-related activities to external vendors. With nearshore, you work with vendors from nearby countries, which solves several issues associated with regular outsourcing. If you avoid certain problems common to outsourcing, it is better to turn to nearshore, meaning that you will not have to struggle with time zone differences, language barriers, cultural differences, and other problems.

Reasons to Consider Nearshoring

Each company is unique and each pursues its own reasons when looking for software development partners abroad. However, there are certain features that unite businesses in their desire to grasp the nearshore software development definition and make some use of it. Some of the common reasons to start IT nearshoring are the following:

  1. No cultural barriers – working with people from the nearby country means that you might already have a general idea of what their work ethics are, how these people live, how they communicate, and how they go about business. Imagine you are a German company. It would surely be easier for you to work with a European team than, say, an Asian team.
  2. Geographic proximity – if meeting your team means an hour-long flight, then you can totally meet your team when you need to. Sometimes you just need to talk to your team face to face, and that is possible because you are located nearby, which is the definition of nearshore.
  3. Cost saving – working with outsourced teams is much more cost-efficient than hiring an in-house workforce. First of all, the economic disparity between the countries might play to your advantage. You can get the same level of technical expertise for a lower price, which allows for faster ROI.
  4. Minor time zone difference – working in the same or neighboring time zone cuts off the problem of communication delays. The difference here is literally night and day: with far-off outsourcing, you would often face the problem of your development team having a nighttime rest while it is a working time where you live. With nearshoring, this problem is nonexistent.

Recruit Faster with a Reliable Partner

Having access to an entirely new talent pool opens immense possibilities for recruitment. You are no longer bound to your local talent pool and can hire people from any of your neighboring countries. If you partner up with a reliable recruitment partner who can help you find the best talent in a matter of days, you can save yourself weeks and even months of tedious search for adequate experts. Faster talent acquisition means:

  • No recruitment bottlenecks – you don’t need to spend months upon months trying to hire experienced developers that match your project’s requirements. Your recruitment partner can just provide the required experts from their internal talent pool.
  • Faster knowledge transfer – move quickly to the knowledge transfer phase to get your new developers familiar with the project.
  • Quick project delivery – the faster you hire and transfer knowledge, the sooner your developers will get to work. This allows for a smoother and faster software development life cycle (SDLC) and swift delivery of project milestones.


Nearshoring is one of the best solutions for any business looking for cost-efficient and quick recruitment. If you need to hire software developers for your project but your local talent pool has run dry – nearshoring is the right choice. If you want to save time and money on recruitment – again, nearshoring. So, answering the question of what is nearshore software development, it is a type of outsourcing that enables fast and efficient recruitment in nearby countries. This would mitigate most of the problems associated with offshore outsourcing and offer better pricing than onshore outsourcing.


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