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A Guide to Nearshore Outsourcing: When Geographical Proximity Matters

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When it comes to task management, time may be a major barrier. Unfortunately, those in charge frequently misjudge how long particular tasks take. This situation adds unnecessary stress to the employee as well as the management. Hence, companies switch to nearshore outsourcing. This way, owners from corporations and startup businesses can delegate the tasks that can be outsourced. Through outsourcing, deliverables are seamlessly assigned to different staff in another company.

While assigning tasks doesn’t have to be difficult, being good at it does require practice. There are things that should be considered. These include how competent the individual is at performing the activity; what talents are required to accomplish the task successfully; and what sort of employee they should aspire to be in this circumstance. In all, companies must make sure that the recipient of the assignment understands what is expected of them.

Sometimes owners and even managers of companies occasionally need a little assistance to do things on time. Maintain the department’s effectiveness using outsourced services and prevent employees from overworking. Most importantly, it reduces operational costs.

What is Nearshore Outsourcing?

According to PartnerHero, nearshore outsourcing refers to a type of business process outsourcing, in which a company hires a third-party provider headquartered in a neighboring country. As opposed to other outsourcing types, nearshore outsourcing focuses on locating a provider based on the proximity along with language or cultural considerations.

Under this outsourcing solution, the client company would gain from a larger, more diversified labor pool and reduced wage expenses when working with a provider from the same continent. Also, the operational hours are the same. While there are things to consider when choosing to outsource to another company, nearshore outsourcing is best when another company has cheap labor.

In general, nearshore setup is similar to offshore outsourcing. What differentiates each other, however, is that the company teams up with skilled professionals in nearby locations and time zones. Nonetheless, there are favorable areas for onshore as well as offshore.

A globe with icons symbolizes nearshore outsourcing

Nearshore vs. Onshore: What’s the Difference?

In recent years, organizations across all industries have seen an increase in the popularity of outsourcing. It entails hiring individuals from other companies to carry out specialized tasks that in certain cases the company’s own team cannot handle. With onshore outsourcing, companies can profit from highly skilled staff with cultural similarities. So, how do nearshoring and offshoring differ from each other?

Nearshore would provide you with the best value if you’re searching for a means to expand your business but within the same time zone as yours. With a nearshore team, you can find outsourcing companies that have competent speakers you wish to add value to your customers.

Now, the onshore and nearshore outsourcing differences have been made clear. Therefore, the question now is which one best suits your company’s needs.

What is a Nearshore BPO?

The concept of global outsourcing is evolving. More non-core functions are outsourced by American companies to increase competitiveness on the global scale. These companies hire BPO providers from India and the Philippines since it allows for significant cost savings. Instead of planning on human capital, their budget can be put toward increasing total revenue.

On the other hand, nearshore BPO companies deliver in-demand non-core tasks such as customer service, administrative tasks, and data entry. With nearshore BPO, coordination is seamless. Scheduling meetings or shifts at outsourced contact centers is challenging but they make sure to meet client demands. Given their proximity, nearshore call centers make it much simpler to collaborate during regular business hours.

Why Nearshore Outsourcing?

When the global job market went into lockdown in 2020, many companies were forced to test out alternative employment arrangements. The majority of businesses saw this as a chance to review their workplace cultures. The traditional full-time office model may soon be replaced by the hybrid model, which will fundamentally alter how businesses operate and interact with their clients and staff.

In addition, hybrid model teams are common in outsourcing companies where flexible work setup meets quality output. With nearshore outsourcing, companies made contributions in improving a nation’s economic standing. Although there is no one-size-fits-all strategy for hybrid work, when done well, it may offer a number of benefits.

Why is Outsourcing Good for Business?

All industries that leverage the power of outsourcing reaped the benefits such as progress toward better and efficient organization. Also, this business strategy offloads tasks that are draining the time and energy of skilled in-house employees.

So, why is outsourcing good? In a nutshell, getting the work done without overhead costs is a good idea. Maximizing the talents of a competent group is not a one-day process. Hence, taking advantage of easy hiring becomes an asset to the project completion. With nearshore outsourcing, there’s no need to sift through the resumes of qualified talents. Put no time to waste when it comes to production.

For steady growth and productivity, small business owners should find balance in delegating projects between in-house and the outsourced team.

The Pros and Cons of Nearshoring to the Philippines

Many executives are thinking about outsourcing with nearshore call centers closer to home. They consider challenging conditions faced by overseas locations, managing remote work, and dealing with COVID-19 and other viruses. Many companies and projects have proven that outsourcing is a great business model for reducing costs when delivering high-quality digital products. Besides, this model is scalable.

In order to understand why nearshoring to the Philippines can be the best choice for your company, you must have an idea why other businesses choose the Philippines. What benefits does it offer and how does it create value?

Let’s take a look at some of the main reasons businesses of all sizes seek staffing outside of their own organization.

A nearshore outsourcing team collaborating and enjoying success.

Advantages of Nearshore Outsourcing

1. Increased Productivity and Efficiency

Flexible work and less workload might improve a company’s in-house employee’s concentration, particularly on their own responsibilities. Because of nearshore outsourcing, employees are more likely to manage their workloads. They also take responsibility and put more effort into their job when they have greater freedom in their work. Here, the important thing is the output.

2. Improved Collaboration and Same Time Zone

Collaborating with nearshore outsourcing teams is best for companies with specific goals in mind. For example, working with an outsourced marketing team may help you strategize as they have experience working with clients. Moreover, since they are in the same time zone, the process provides continuous improvement. In all, nearshore teams know how to work together toward achieving a client’s goal.

3. Wider Talent Pool

An organization that uses a hybrid work model can hire talent from nearshore outsourcing companies. The advantage of hiring from a neighboring country is when clients can tap into the larger talent pool. This might provide your business a competitive edge, enable you to enter new markets, and guarantee continuous production.

Disadvantages of Nearshore Outsourcing

1. Higher Cost than Offshoring

Even though the tasks and qualified talents are outsourced, nearshoring is not as inexpensive as offshoring. A company will find it more expensive to grow its operations as a result of increased resource costs and labor expenses in nearby countries.

2. Limited Access to Tech Candidates

Due to a lack of skilled and experienced experts in the country, the talent pool will decrease. Additionally, if you’re looking for a specific tech stack and domain, the work becomes more difficult. To address this issue, the skill pool at a nearshore company is eminent in the Philippines or India.

3. Increased Risk in Data Security.

Outsourcing entails the disclosure of consumer and company information to other parties. Nevertheless, although it is a cost-effective choice, nearshoring might be something some managers can be hesitant to give a try. After all, they’re offloading tasks to a group they don’t directly know. To prevent data losses, a nearshore outsourcing service provider must secure data, privacy, and intellectual property.

Now you know the definition of nearshore outsourcing as well as the numerous advantages. As a company, you are able to determine whether this type of outsourcing is appropriate for you. Nearshore outsourcing can be the best option for your company if you want to save expenses while improving work quality.

Philippines nearshore outsourcing team celebrating.

Hire a Nearshore Team from Outsource-Philippines

Automation, artificial intelligence, and remote work have long been predicted as the future of employment. Despite the advancements, there are companies that prefer to work with a skilled professional. One of the things they consider is how the provider’s culture fits their own.

Outsource-Philippines has years of experience and seamless workflow that facilitates communication while making sure that your assets are protected. We have the competency in managing nearshoring requirements over the years, which has helped us get a solid grasp of what is ideal for a company’s workflow.

You can get in touch with us if you’d like to learn more about our outsourcing services and how we can help your company succeed. Work with us today.