5 benefits of nearshoring

I speak every day with companies looking to get started with business platforms like Salesforce, Google or Amazon AWS. They all run into the same problems. Namely: permanent scarcity of people for implementing, maintaining and successfully deploying these platforms. In this blog, I discuss onepossible solution to the scarcity in the Dutch labour market: nearshoring.

Working with a new business platform requires an entire team of people. Developers, business analysts, project managers. But these people are hard to find in the Netherlands. Let alone the entire teams organisations need to get started with a new platform. So the companies I speak with are always looking for other, alternative ways to find good people. Since it’s now clear that the scarcity of IT professionals in the Netherlands is a structural situation – and only expected to increase – companies are searching increasingly across borders for a solution. Nearshoring is an option that can provide a solution.

To avoid any conceptual misunderstanding: by nearshoring, I mean engaging capacity in another country, but not too far from home. Five concrete benefits of nearshoring are listed below.

  1. Considerably lower costs

The cost benefit is the primary driver for Dutch companies opting for nearshoring. The arithmetic is straightforward. A Dutch developer goes easily for €100k per year. A developer from southern or eastern Europe, often costs some 40 to 60 per cent less. So nearshoring not only solves capacity problems, it’s also interesting from a business standpoint.

  1. Rapid scaling-up

There are too few IT professionals in the Netherlands, and this situation is expected to continue in the coming years. But across the border, the situation is different. In many European countries, countless IT professionals graduate from university each year, with labour market supply outpacing the growth in demand. This gives Dutch companies access to multiple and larger talent pools in such countries as Portugal and Bosnia-Herzegovina. By hiring highly skilled professionals from these countries, Dutch companies looking to launch large implementations or projects can scale up quickly.

  1. Close to home

Nearshoring is close to home by definition, as opposed to offshoring. Physical meetings with a nearshore team cost only a day of your time and the price of a plane ticket to Lisbon or Sarajevo. Geographic proximity makes it possible to schedule regular meetings, organise a joint kick-off or discuss problems with projects. This is much more difficult with a team in Bangalore.

  1. Cultural similarities

By extension, with nearshoring, cultures are relatively close. The more cultural similarities there are between two collaborating parts of an organisation, the easier it is to cultivate mutual understanding and prevent unintended conflicts. Contrast this with teams from substantially different cultures.

  1. Flexibility

A nearshore team or layer increases a company’s flexibility, and therefore its effectiveness. It is easier to scale up or down quickly, without the time-consuming and often expensive processes associated with Dutch employees.

There’s a good reason that my own clients are increasingly asking for nearshoring services. To meet this demand, I recently established New Technology Teams. Under this label, I supply nearshore teams from Portugal and elsewhere. If you would care to exchange ideas about nearshoring, I would be glad to speak with you.