In the business world, there are numerous terms everyone must be aware of. Recent years have brought even more terms, of which some sound quite similar. A couple of those terms include offshoring, nearshoring, and outsourcing. Offshoring has been common practice for businesses for years now. But recently, some businesses are choosing nearshoring as a better option. The thing is, not every company has heard of it. And others have no idea if it will benefit their business, because they are not as familiar with this option as they should be.
What is Nearshoring?
Nearshoring is similar to outsourcing. When a business outsources work, they hire a contractor to complete the tasks. Those contractors can be located in the US, or they can be in another country. Normally there is a contract involved. That contract can end after a few months or continuously be renewed.
A company may choose nearshoring when they hire a contractor to work with their business. Nearshoring involves hiring a person who lives closer to the physical location of the company. That person may still live in another country. But that country would border the country where the business is hiring from.
Most of the time, businesses prefer nearshoring over offshoring, because they can work with people within the same time zone.
How to Choose Nearshoring Locations
Businesses may have difficulty choosing a nearshoring location if they have not done it before. There are a few things every business should keep in mind prior to deciding on a specific location.
Every nearshore destination should:
- Be close to the country where the business is located
- Have similar time zones – The time zone does not need to be exact, but it should be close enough that work can continue without delays.
- Excellent cost to quality ratio
- Fewer cultural discrepancies
- Advanced infrastructure and facilities for offices
- High quality IT education
- Ability to offer multiple services at a lower cost
- Professionals who speak proficient English
- Large number of expert professionals to choose from
Every company will have its own personal requirements in addition to these. Companies in the US will mostly want to consider nearshoring with locations in Latin America. Mexico and Colombia are the two countries that normally receive highest consideration for nearshoring.
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How to Ensure Nearshoring Works Well
Nearshoring will not just automatically work for companies. There are a few things that must be done before this type of venture is considered a success. First, companies should ensure their mission, vision, and core values are in alignment with the contractor, or contractors, they have chosen. Forgetting to do this can cause a loss of productivity or something worse.
Compromise is a word that will come up often with nearshoring. Not everyone works the same way, so compromising may be necessary. A nearshoring company, or contractor, may be able to complete ninety percent of the tasks they are asked. The business hiring that company, or contractor, will have to determine whether they really need the other ten percent or if they can compromise and say ninety percent is good enough.
Of course, every business wants to hire a contractor who is competent at their job. When nearshoring, businesses must make sure that who they are hiring is actually capable of completing the work. Requesting a list of qualifications, certifications, and other requirements is an excellent way to ensure the workers will be competent.
How to Manage Nearshoring Teams
It can take a lot of patience to manage a nearshoring team at first. The new team members may have a different style of working or communicating. Therefore, it is important to have guidelines in place and make sure everyone understands them before the work is started.
Communication is key when people are working in different locations. There are plenty of communication apps, as well as email, to keep up with what is being accomplished. Finding the right app will ensure answers to questions are sent immediately.
Those apps can also be used to check in with everyone about their personal lives. While some people will be reluctant to share lots of personal information, creating a team normally includes knowing a little about the other people on the team.
Miscommunication is common in all businesses. However, it is even more common when two offices are hundreds, or thousands, of miles apart. Instead of letting miscommunication take over, everyone should communicate effectively. Concerns and questions should be brought up early. And no one should feel like they are being looked down on for asking a question others may already know the answer to.
Accountability is necessary in all workplaces. It can be difficult to keep nearshoring employees accountable. Management tools and accountability apps are helpful in this situation, because everyone involved will know what is expected of them during working hours.
Nearshoring is an excellent option for many businesses nowadays, because they can get necessary tasks completed without the hassle of different time zones. Any business who hasn’t tried nearshoring should consider it if they are struggling with finding help in their own area.