Nearshoring: What’s that when it’s at home?

Labor relations are constantly changing. The definitions of the value of labor, surplus value, and the connection between labor and management vary according to the philosophical school. Marx devised a universal class conflict, while Kalecki interpreted how money flows into businesses and the risk associated with capital investment.

Companies use a variety of strategies to attain the desired result in their effort to save costs and boost output. The use of outsourcing in this scenario is considered as a way to externalize non-critical tasks from the business process. The extent and practices of outsourcing will vary depending on the nation under study.

According to Chen (Forum, n.d.), the service sector has taken the place of industrial employment since it has a higher added value. As a result, the United States wants to develop into a nation that focuses on the service industry. 60% of agricultural consumer goods were made in the United States at the turn of the 20th century, but only 12% were made there in 2010. International outsourcing aims to concentrate on the economy’s most productive area, which is design and creativity.

One of the most crucial components of any business is its human capital. Even with the most automated production techniques, there must still be humans to supervise production, carry out specialized design processes, and supply the creativity required for innovation. Without human capital, a corporation is nothing more than a carcass.

The issue with human capital is that it behaves differently in the legal system than it would in an economic setting. When a business finds itself in a downward spiral of sales, it might take steps like cutting back on input purchases. In the organization of human capital, this facility that exists within this market does not exist in the same way.

Bringing production closer

The health crisis, the US-China trade war, and the customary difficulties of great distances and time zone differences between countries all had a significant impact on logistics and the supply chain in the last decade.

Nearshoring, which reduces the difficulties brought on by these circumstances by bringing outsourced manufacturing locations closer together, has grown in popularity as a solution in recent years.

A business model known as “nearshoring” involves corporations moving their operations to a more advantageous and nearby area, according to research done by Newmark’s Global Corporate Services (GCS) division.

Difficulty in Asia has given rise to nearshoring.

This form of outsourcing developed in response to offshore, which looks for suppliers in farther-flung regions like Asia. 2019 saw a dramatic fall in demand from the normally more popular Asian market for moving business operations.

Numerous Chinese ports and businesses had their activities suspended as a result of the pandemic and the whole China situation.

As a result, all those multinational corporations that relied on China and other eastern nations for a portion of their product manufacture saw a severe economic impact.

Why trust Nearshoring?

Pedro Barboglio, the CEO for?Remote Team Solutions, noted in?interviews?that nearshoring has advanced significantly over the past year.

Companies rely on nearshoring because it enables them to, among other things:

• Reduce expenses while maintaining operation control, which results in products and services of superior quality.
• Bringing production closer to consumer markets.
• Reduce time zone and cultural disparities, while increasing influence in the decision-making process, on par with direct employees.
• Streamline transportation and logistics procedures to improve customer responsiveness, reduce delivery times, and boost flexibility in the event of supply chain disruptions.
• Boost job creation and provide access to global talent pools and connections.

Source: Remote team Solutions Headquarters

Mexico: The way to go.

Many people are not well aware that Mexico has been growing?a lot?regarding all sorts of outsourcing services; with a well-educated workforce, it keeps a balance between competitive price points and productivity. Just to put it in context, Mexico’s story is particularly interesting: back in the 20th century, Mexico’s economy depended on agriculture. It was after World War 2, that Mexico started producing a notorious number of technical professionals and engineers. Consequently, a lot of tech infrastructure was implemented during the 1960s and the 1970s, and as a result, the GDP grew hand in hand with industrial activity such as manufacturing and oil.

The aforementioned caused a whole generation exposed to computers, information, and technology education — a trend that not only continued but it also increased exponentially to the point of generating internationally accredited universities, with an amazing talent pool often employed by global companies. As a matter of fact, most of Mexico’s technology employees relocate to another country or get hired for important positions for global companies. Recently, The World Bank published that Mexico’s information technology outsourcing industry had been growing at an annual rate of 10–15 percent and said that the country is the third-largest exporter worldwide of information technology services. Many Mexican universities offer outstanding STEM programs, some of which are ranked higher than major US universities. They produce a deep, highly skilled talent pool — at a lower cost, effectively making some of?Mexico’s cities?a prime business destination, and when it comes to staffing, most definitely the way to go.

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About the Author

Mauricio A. Cipres

After a 10-year career in Marketing and Management, having experienced all sorts of colors and flavors in sales, Mauricio is now the Business Development Manager for Remote Team Solutions, a Staff Offshoring company that helps its clients grow by building remote teams, helping them get substantial savings on employee wage and benefit costs while eliminating the time and resource burden of active employee management and reducing the employee turnover rate. Their clients, mainly from the US and Europe, operate in a wide range of industries with one thing in common: A global vision through offshore success.