Are you looking for a way to increase profitability? Nearshoring might be the solution you're looking for. You can effectively reduce costs, increase efficiency and build a competitive advantage. But, to get the best results, it's important to do it right. That's why we want to share our insights with you.?
Over the past few years, having multiple partners across different countries has become increasingly important to mitigate potential disruptions caused by crises like the pandemic, the Ukrainian conflict, and economic instability. While some businesses may reduce their headcount during the current economic downturn, they must retain their software developers. Software developers are vital to any business relying on digital platforms and applications to serve customers.?
Therefore, the demand for software development remains high even as companies cut back on other departments. To minimize costs, companies search for the best value providers of software development services and shift sourcing to more cost-effective regions. Experts project the global outsourcing market to grow by $40.16 billion by 2025.?
Nearshoring is the practice of building teams in the same or similar time zones. This strategy offers several advantages, including:
- Cost Efficiency: The current software engineering talent landscape in the United States presents financial challenges; consequently, 87% of IT businesses consider nearshore outsourcing to reduce costs. As we read in the Deloitte report, US tech companies have recently cut approximately 95,000 software engineers, and these same organizations have added about 875,000 jobs since 2019. The layoffs represent 10% of the broad workforce expansion over the past four years. Furthermore, cost pressures and an uncertain economic outlook are causing leaders to tighten business and IT operations budgets. Nearshoring offers a strategic solution, allowing companies to tap into skilled talent at a fraction of the cost.
- Global Talent Pool:? More than 90% of IT leaders plan to expand their modern software engineering and cloud environments, yet 80% say inadequate employee skills are holding them back. Automation and process improvement are expected to remain at the top of leaders’ priority stack, so engineering talent will be key to their success. With challenges in accessing onshore talent and the demand for cloud-native skills outpacing supply, nearshoring provides access to a diverse and expansive global talent pool. It helps companies overcome skill shortages and fosters a collaborative, multicultural work environment.
- Strategic Focus on Innovation: Nearshoring enables organizations to dedicate international tech centers to specialized functions, fostering automation and process improvement. This strategic approach ensures that leaders can maintain a sharp focus on innovation, a top priority for over 50% of CEOs, as revealed in a 2023 survey.
Nevertheless, nearshoring may be challenging, especially if companies enter a new market. For recruitment, they must create a personalized strategy, set realistic targets, and diversify talent pipelines from competitors, universities, and tech programs. Also aligning the skills of remote teams with the organization's specific requirements becomes critical. Some cultural nuances may impact collaboration and team dynamics despite the geographical closeness. That’s why a successful nearshoring strategy should be built on:
- Clear Communication Channels: Establishing transparent and efficient communication channels is paramount. Regular video conferences, collaborative tools, and a well-defined project management framework help bridge geographical gaps.
- Cultural Integration: Prioritize cultural integration initiatives to foster a sense of unity among distributed teams. Shared cultural experiences, team-building activities, and cross-cultural training create a cohesive work environment.
- Strategic Partner Selection: Choosing the right nearshore partner is instrumental. Evaluate potential partners based on their expertise, track record, and cultural compatibility. A top-notch software house helps companies enter new markets by creating a strong brand story and customizing recruitment strategies. They ensure smooth growth by supporting talent acquisition, building strong foundations, and diversifying sources for hiring.
Do you want to build an effective strategy for your team in the nearshoring framework? Are you looking for an experienced and trustworthy partner? Write to us and see how we can help you: [email protected]
- Global Business Process Outsourcing Market 2023-2027, technavio
- Software engineering Nearshoring, Deloitte?
- Global Outsourcing Survey 2022, Deloitte
