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If you’re a tech business leader, be it a founder owner, CTO, or CIO, you’re likely no stranger to the concept of offshoring. Yet, the term ‘nearshore staff augmentation’ might not be as familiar. In this piece, I’ll break down what nearshore staff augmentation is, its unique features, and its potential impact on your tech staffing. Let’s dive in.
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Nearshore staff augmentation is a strategy where companies outsource tech roles—like Software Developers, DevOps Engineers, and Product Managers—from countries close to their geographic location. With nearshore staffing, firms integrate a remote team that aligns well with their in-house team. This nearshoring staffing approach complements your existing team, addressing the time zone pain point often associated with offshore models. Nearshore staff seamlessly integrates with tech teams, helping maintain production quality. The benefit? Your development team gets a boost, operational costs are cut, and employees remain in sync, whether they’re part of your in-house or nearshore team. This is obviously the reason why 80% of companies in North America are actively considering nearshore staffing.
Staff augmentation is on the rise, largely due to its flexibility, quick deployment, and cost benefits. Yet, understanding the nuances of the various models can guide you in choosing the right fit for your company.
Onshore outsourcing involves hiring staff from within your own country or region, say North America. It’s an excellent choice when deep collaboration, fluid communication, and data confidentiality are paramount. While the benefits of this model are clear, especially in terms of work styles and culture, the cost can be higher because of the region’s living and labor expenses.
Nearshore outsourcing focuses on partnering with talent from a nearby or a neighboring country—think Latin American countries if you’re based in North America or Eastern Europe for many Western European nations. A key advantage is the alignment in time zones, or at least similar time zones, and a similar culture. This means business hours are synchronized, making collaboration smoother. Plus, the cost benefits are more palpable than onshore outsourcing, given the competitive labor rates in regions like Latin America or Eastern Europe.
Venturing into offshore outsourcing means hiring from a different continent altogether. If your primary drive is cost savings and you’re willing to navigate the challenges of work culture differences, then this might be your best bet. Offshore teams, perhaps from South America when you’re stationed in Eastern Europe, might present challenges such as language barriers and cultural differences. The major advantage, however, is significant cost reductions.
In essence, your choice hinges on your priorities. Onshore brings proximity and aligned work culture at a premium. Offshore offers marked cost savings, but with cultural and time zone challenges. Nearshore sits comfortably in between, offering both cost benefits and a work culture that isn’t too far removed from your own.
For years, software development outsourcing has predominantly centered around established tech hubs like Ukraine, Romania, India, China, and Poland. These countries, while known for their software developers and low labor costs, are geographically removed from the US, leading to the term “offshore staff augmentation.”
However, the landscape is shifting. Latin American nations, including Brazil, Costa Rica, Argentina, Mexico and Colombia are emerging as formidable players in this domain. While hiring full-time employees from these nearshore countries might not be as economical as the traditional offshore options, it’s still cost-effective compared to US-based developers. Opting for a staffing firm in these Latin American regions offers US companies distinct benefits, especially in projects where you need to work closely with the team and within the same time zone. The quality of the workforce is a key benefit of nearshore staffing, with 80% of nearshore developers having a bachelor’s or master’s degree. These advantages set them apart from talent found in Eastern Europe and Asia. Integrating this new wave of talent into your company, managed your nearshore partner, provides a fresh and efficient outsourcing option for businesses.
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Navigating the complex landscape of staff augmentation can be challenging. As tech businesses aim for efficient software development while balancing costs and communication, one solution rises above others: nearshore staff augmentation. Delving into its core advantages, we’ll explore why this strategy is an emerging favorite.
While nearshoring might not be as low-cost as some traditional offshore locations, the operational costs of leveraging Latin American talent remain significantly lower than North American rates. Opting for tech staff outsourcing not only aids in reducing operational costs, but it also cuts the direct costs associated with full-time in-house employees. These savings encompass salaries, benefits, paid vacations, and other perks. It’s a cost-effective strategy, ensuring you save money without compromising on the quality of services.
A major hiccup with offshore teams is managing time zone disparities. This often translates to delayed projects and misaligned schedules. Latin America, in contrast, shares similar time zones with North America, promoting increased productivity. Their business hours, usually spanning from 8:30 to 5:00 with a lunch break, and a standard workweek of 40 to 44 hours, mirrors the US structure. This ensures your nearshore staff can integrate into company practices, enhancing communication and collaboration. Such alignment, crucial for benefits like video conferencing and real-time collaboration, is a challenge when dealing with talent from regions with stark time zone differences.
While each region has its distinct cultural traits, North, Central, and South America share similar values rooted in their intertwined histories. Common threads include traditions of Native Americans and European settlers. Despite each nation’s unique evolution, some core values have endured, such as a robust work ethic, the potential of individuals, and a deep respect for workplace hierarchy. These similarities can provide additional support when juxtaposed against locations like the Philippines, Ukraine, Poland, or India. Embracing nearshore services ensures your team reaps the benefits of shared values, fostering smoother integration and countering the challenges of the ‘great resignation’ era.
In a nutshell, nearshore staff augmentation offers a blend of technical expertise, cost savings, seamless communication, and cultural compatibility. It’s an avenue for tech businesses to access a rich talent pool, ensuring they remain competitive in the ever-evolving tech landscape.
Integrating nearshore staff augmentation is a pivotal move for startups and established businesses alike. Here’s a concise guide to get you started:
Remember, the success of incorporating nearshore teams hinges on meticulous planning and the right partnerships.
Within the rapidly evolving tech landscape, Headspace, a soon-to-go-public enterprise, felt the talent crunch. Despite having a significant development team in the U.S., the quest for top-notch developers at a competitive price was challenging. They partnered with TurnKey to establish Center of excellence in Mexico.
Remarkably, within 30 days post-contract, the initial hires for this Mexican center were on board. Encouraged by this early success, Headspace even broadened their original vision for the center.
From the client’s perspective: “Collaborating with TurnKey surpassed our expectations. In under two months, they seamlessly built our initial team. The quality and speed of acquiring such exceptional engineers left us genuinely astonished.”
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