Maximizing The Benefits Of Nearshoring: Four Key Strategies For Success

It’s been over a decade since I started nearshoring within the U.S. tech market. In the process, I’ve run into countless leaders and executives who have endless questions about outsourcing opportunities. I’ve also met many whom I feel could be extracting much more value from their tech resourcing solutions. When close to 287,000 outsourcing businesses operate within the United States—an increase of 3.7% at the start of 2023 compared to 2022—it’s only natural that tech leaders and other executives feel overwhelmed with the options.

In this article, I will pass along four very simple yet key strategies for nearshoring success out of the U.S. This is knowledge I’ve gained and now compiled after years of experience working through an established business group with North American-based companies constantly seeking to augment their tech teams.

According to Investopedia, outsourcing is “the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff” and is “usually undertaken by companies as a cost-cutting measure.” When outsourcing takes place in a nearby country, we speak of nearshoring.

Whether as a measure for pure growth or to speed up time-to-market and high-level tech solutions, I’ll go over four practical measures any leader can implement immediately to extract the best value from their business relations.

1. Lead with honest and transparent communication.

I firmly believe in honest and transparent conversations to the point of instilling them at the very heart of every company I own. I found this basis to be a must in kicking off effective and assertive processes. That certainly applies to any information technology provider.

What my solution architects and account management teams have found in getting relationships started is that many companies know what they want but not necessarily what they need.

Turn this around. Seek clarity as to where you are with your teams, the point at which your company finds itself and where it wants to go.

An effective way to start is by having the rough talks first. Don’t stick to all the good-and-easy conversations. On the contrary, face the difficult ones early and head-on. Doing so at all times is what makes a significant impact on long-term business relations of value in this field.

2. Take control of your discovery phase with well-managed expectations.

Clear expectations are easier to manage. With clarity, people can define problems more efficiently to detect opportunities.

To maximize staff augmentation benefits, you and your nearshore partner need to excel at outlining why you’re entering this new business relationship. The request can’t just be an order you draft up with your vision that another company follows. Rather than say, “We need 15 Java developers” as part of your contractual relationship, communicate that you need to move away from a legacy platform to enhance your product, for instance.

Rather than negotiating, identify business providers who are genuinely in this sector to help companies achieve their business goals. A great nearshore outsourcing partner seeks to understand the reason behind your tech requirements to successfully manage any underlying needs.

A two-sided but fuller and more proper understanding of your actual project demands can ensure your expectations are in alignment. That is key for true success in the entire collaboration process.

3. Do the hard legal work to build solid foundations.

We’re certainly used to discussing contracts, but are we really diving deep into the legal and fine print work of customizing terms and conditions? As leaders, we need to make sure the foundation of future work collaboration is solid from the start.

Include all relevant details in your legal discussions. The most common items people overlook here are a focus on pay ranges and the timeframes for advanced notices. Add clauses where needed, including termination periods. You should touch upon every meaningful detail, with holidays being no exception.

Define what works best for your business economics as part of your preparation work. Not many heads of departments are as prepared for these discussions as they should be. What salary model works for you? Variations do exist. Hourly rates have proven to work for one of my companies. Find out what’s most convenient for your team.

4. Lower the burden of managing tech talent.

Perhaps my best piece of advice when procuring a new nearshore outsourcing partner is to ensure they can significantly lower the burden of talent management. This line of work is not just about software development. On the contrary, it has to do with all of the success and performance management that allows remote tech talent to do their best. That includes flawless payroll and a great culture that assure a low developer churn, low attrition margins, a sense of fulfillment and satisfaction and more.

We’ve found the key to our success lies in ensuring the work-life balance for the long term with everyone with whom we decide to do business. What does success look like for your company and teams?

As a result of securing a nearshore partner, diversity and workplace ratings can also improve. For example, remote Latin American tech talent is giving one of my companies a cultural exchange value that enhances already cost-effective solutions. Time zone benefits and competitive salaries are just another great part of the mix. Seek those added values as well.

Do the background work to sign a partner you trust.

Above all, I highly recommend you sign a great deal with a partner you can trust. A nearshore outsourcing relationship can indeed be based on mutual benefit, and there’s no reason why you should be missing out on that potential.

Rather than looking at nearshore companies as service providers, secure long-term business partnerships that will continue to work well.

This article was originally published on Forbes.com