Nearshoring: Definition, benefits and examples

There are many ways to grow and expand your business in today’s world. Offshoring, outsourcing, nearshoring-what do they all mean? With so many options for sourcing workers, it can be hard to differentiate between them, but don’t fear! In this short guide, we’ll learn together what nearshoring is and how it can benefit you and your business.

What is nearshoring?

When choosing to outsource, there are two main options: nearshoring and offshoring. Both involve hiring outside of the business’ home country, but they have some key differences. 

Nearshoring, also referred to as nearshore outsourcing, is the practice of recruiting employees from nearby countries, while offshoring refers to hiring workers in distant countries. For example, an American business hiring workers in Colombia would be considered nearshoring, while an American business hiring workers in India would be considered offshoring. 

nearshoring vs offshoring

When deciding to expand your business, it is important to determine which of these options will best help you achieve your business goals. To assist you in making this decision, let's explore some of the many benefits of nearshoring!

What are the benefits of nearshoring? 

Nearshore outsourcing offers a wide range of benefits to businesses seeking to outsource and hire in foreign countries. Imagine having access to a broader, more flexible talent pool, having teams in similar time zones that can maximize productivity, and reducing your labor costs simultaneously. Does it seem too good to be true? These are just a few of the advantages of nearshoring!

Expanding Opportunities: Top Talent and Bilingual Advantage

A valuable lesson many businesses have learned recently is that numerous jobs don't necessarily require an in-person presence. Many roles can be effectively carried out remotely, even from another country! Areas such as sales, operations, customer service, marketing, and more are particularly suitable for nearshoring.  By expanding your hiring pool to nearby countries, you can ensure that you find the most qualified workers. 

Nearshore outsourcing can provide unique benefits to many roles. Nearshoring enables businesses to find talented workers who are proficient in multiple languages. While English may be the most commonly spoken language in America, there is also a significant population of Spanish speakers. In fact, according to Sonia Thompson, a contributor for Forbes magazine,


In the U.S., 13 percent of the population speaks Spanish at home, earning it the title of the most common non-English language spoken. (Forbes, 2021)

Spanish is widely spoken in the U.S., and the population of Spanish speakers is rapidly growing. By nearshoring your customer service, sales, and marketing teams to nearby countries like Colombia or Mexico, you can leverage bilingual talent to tap into this expanding customer base! 

Culturally Close: Fostering Close Relationships

Geographically close countries often share a close cultural affinity as well. With their shared values and culture, your nearshored team will seamlessly integrate into your company's culture, in contrast to an offshored team situated in a distant country. Understanding the culture of your home country and company is vital for nurturing a strong relationship between you and your nearshore provider.

Additionally, proximity between countries facilitates constant cultural exchange and influence. When you have operations in a neighboring country, you naturally gain exposure to some of that cultural influence. For instance, the American celebration of Cinco de Mayo, which commemorates Mexican independence, highlights the cultural influence and shared value of freedom between these cultures. By having nearshored teams that grasp the significance and extent of these shared cultural influences, you can enhance your business's influence and expand its reach.

Optimizing Time: Aligning Time Zones, Effective Time Management, and Enhanced Efficiency

Nearshoring offers a significant advantage over offshoring when it comes to time management. By hiring in a country located in the same or similar time zone as your home base, you ensure that all employees can follow similar schedules. 

With offshoring, time differences between teams can be as long as 12, even 16 hours! This often results in long delays in projects, leading to wasted time and misused resources.

However, when your teams are only 1 to 4 hours ahead or behind each other, this eliminates wasted time and can even increase productive time. If your nearshored team starts earlier or ends later, it effectively extends your business' productive time per day!

nearshoring benefits

Cost Savings and Building High-Performing Teams

Nearshore outsourcing is a cost-saving option for businesses seeking to build high-performing teams on a budget. By nearshoring a portion of your operations to a more cost-effective country, your business can save on labor costs, taxes, and overhead expenses. In fact, nearshoring can save businesses 30-40% on labor costs alone! Your business can hire labor that is both cost-effective and high-quality! 

Additionally, having your teams located closer saves your business money on transportation and supply chain costs. With significant cost savings from nearshoring, you will free up valuable resources that can be allocated to other areas of your business.

nearshoring advantages

Nearshoring Examples

If you’re still a little confused about what nearshoring is and how it can benefit you, let’s examine a few hypothetical and real-life examples. 

Let’s say an American business decides to move part of their customer service team to Colombia. By doing so, they would have a team of talented bilingual experts in Colombia, resulting in resource savings. This is an example of nearshore outsourcing. However, they may face challenges setting up their nearshored operation without the guidance of an experienced nearshore provider. Nearshore providers are an excellent choice for businesses that need help navigating the process of setting up their international operation(s).

Let's examine a real-life example by looking at Sworkz, a company that specializes in nearshoring services for small and medium-size businesses. Sworkz assists small businesses looking to expand and nearshore certain aspects of their operations by identifying and hiring bilingual talent suitable for the required roles, whether it's in sales, customer service, or marketing. With Sworkz, the business gains access to skilled bilingual talent located in Colombia.

Nearshoring is a fantastic option for many businesses, but it may not be suitable for every business. If you have any questions about whether nearshoring is right for you and your business, don't hesitate to contact the experts at Sworkz!

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