Short on Talent? Nearshore Recruitment Should Be Your Next Move

by PTP Chicago
October 31, 2023
Nearshore Recruitment SHould be Your Next Move

The COVID-19 pandemic, scary as it was, showed us that we don’t have to be in the same physical space to work together. This opened a door for new recruitment possibilities, allowing businesses to source skilled and qualified talent from other geographical areas, build relatively competent teams, and get the job done.  

However, offshore recruitment—a term describing recruitment from areas that are geographically farther away—brought its own set of challenges, such as operating in conflicting time zones, teams working odd hours, project delays despite round-the-clock development, and various cultural challenges of working with people from other areas of the world. 

And that’s where nearshore recruitment, a practice of sourcing skilled and qualified talent from neighboring countries, comes in. It provides nearly identical benefits as offshore recruitment but with considerably fewer detriments, which is particularly important for companies that rely on remote work. 

What is Nearshore Recruitment?

Nearshore recruitment refers to an organization’s talent scouting and sourcing strategy, which relies on sourcing talent from nearby or adjacent geographical locations. This allows businesses to reap the numerous benefits of offshore talent sourcing—which are mostly related to the cost—without having to deal with various challenges, such as different time zones, cultural differences, and language barriers. 

For example, many US tech companies have well-established operations in Mexico, which produces a significant number of engineering graduates each year. Paired with competitive labor costs, roughly the same time zones, and easy travel access, nearshoring from Mexico facilitates easy and cost-effective coordination and collaboration between various teams. 

So, the main idea behind nearshore recruitment is benefiting from the best of both worlds: the cost savings of outsourcing your work to competitively priced yet competent talent and the benefits of cultural, temporal, and logistical advantages of proximity. 

How Nearshore Recruitment Benefits Your Business

Nearshore recruitment has its own set of benefits regardless of what industry you’re working in and whether you’re hiring and onboarding individual talent, like hiring a software engineer or outsourcing the customer support section of your business. 

So, let’s start with the most obvious advantage, which is the cost reduction. Nearshoring is often more cost-effective than hiring domestic talent, especially if the neighboring country has a lower cost of living and wage scale. This leads to significant savings in terms of salaries, benefits, and infrastructure. 

Furthermore, unlike offshoring to distant countries like China and India, the geographical proximity facilitated by nearshore recruitment ensures that the hired talent is more likely to share cultural similarities and time zones with your business’ primary location. This provides a slew of additional benefits on its own, as it allows for better communication and collaboration between teams. 

This is particularly important for tech and software development companies that require closer collaboration during product development and build phases, as it makes it easier to brainstorm, test, provide feedback, and address any issues that might appear during cycles. 

Nearshoring doesn’t apply to talent acquisition alone. Outsourcing part production in manufacturing industries can also benefit from outsourcing, as it cuts down on production and shipping costs. And the numbers tell no lies; Chinese production costs have risen by more than 87% of US costs, the ocean freight from China might take up to a month to arrive, and their fuel costs have gone up 20% per year in the past few years.

Conversely, Mexican production costs fell to 75% of US costs, and ocean freight from Altamira, Mexico, to the port of Miami takes only six days. So, it’s really easy to understand how nearshore outsourcing and nearshore recruitment make sense in terms of faster development times and time to market, as well as increased profit margins due to cuts in production/development costs. 

Additionally, acquiring a wider talent pool, paired with cost savings and improved operational efficiencies, enables your business to strengthen its position in the market against competitors that don’t leverage nearshore opportunities. 

Making Sense

Nearshoring isn’t a one-size-fits-all solution to talent acquisition, and there are some drawbacks associated with the practice, though said drawbacks aren’t as pronounced as those associated with offshore recruitment. 

For example, nearshoring brings in talent from similar cultural backgrounds, but despite cultural similarities with the primary location, differences still exist. These might be overlooked due to assumptions of similarity, which may lead to misunderstandings. 

So, nearshore recruitment, as great as it is, still requires due diligence, and it has to make sense. To illustrate a point, nearshoring highly specialized software development talent definitely makes sense from nearly all the standpoints we previously discussed, including financial viability, time zone, and cultural similarities. 

However, outsourcing a call center, which doesn’t require specialized labor, could be outsourced to more economically viable offshore locations. So, the economic and efficiency benefits of nearshore recruitment largely depend on the type of talent you’re sourcing. 

Steps to a Successful Nearshore Recruitment

You have to take certain steps in order to make nearshore recruitment as successful as possible. The first step is to research the potential nearshore destinations and evaluate their infrastructure, talent pool, and economic stability. 

After that, you need to establish a robust communication channel and set expectations right from the start. Remember the small cultural differences we mentioned? It’s best to avoid them, which is why it’s important to ensure that both parties are on the same page when it comes to objectives and timelines. 

It’s also highly recommended to promote inter-team interactions, workshops, and cultural exchange, as those activities help foster a more collaborative and inclusive work environment. And lastly, nothing said here is set in stone. Nearshore recruitment strategies need periodic reviews and revisions to maintain their efficiency in helping you source the best possible talent.  

Final Thoughts

As the continued globalization and advancements in communication and technology continue to break down geographical barriers, nearshore recruitment offers a range of benefits that make it an attractive strategy for businesses aiming to remain competitive, agile, and innovative. 

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