Why Outsourcing Nearshore is Beneficial for Companies
April 8, 2022 •Andrew Reiter
Outsourcing, in general, is a business model that has gained tremendous popularity in the last few decades due to the growth of digital technology and globalization. Companies in the United States are continuously looking for solutions to solve the problem of rising costs in labor.
Outsourcing to offshore companies all around the globe used to be the norm because of its lower cost, but challenges with management, different time zones, and disparities arose. It became apparent that nearshore outsourcing can overcome those obstacles and is continuing to prove a more cohesive and efficient way to do business. There are several benefits to nearshore outsourcing which are detailed below.
What does nearshore mean? As opposed to offshore outsourcing, nearshore outsourcing involves countries or territories that are within close geographic proximity but also indicates locations that have a population with high proficiency in English and advanced skill sets. For the U.S., nearshore is often referred to as Caribbean and Latin America (CALA). The region includes the Caribbean Islands and Mexico but the term can be a little misleading because some Central and South American countries are also often considered nearshore.
Advantages of Outsourcing Nearshore for Customer Service
1. Highly qualified employeesNearshore countries offer a large pool of talent, particularly in Mexico where the government is heavily invested in STEM education. U.S. companies are finding that employees in the nearshore locations are highly capable, technically savvy, and perform well in the customer service and sales industries.
2. LocationThe most notable feature of nearshore outsourcing is that the locations are geographically close to the United States. Additionally, closer locations mean shorter travel times than offshore regions, which makes them more convenient to visit for the purposes of training and management. With direct flights available to and from some spots, it’s even possible to make day trips without the need for overnight stays. Finally, Partnering with a business that is in the same or similar time zone maximizes the overlap of business hours. Aligning the workdays makes it much easier to collaborate and effectively communicate.
3. Multilingual capabilitiesMost of the workforce in nearshore locations speak fluent English, allowing open and effective communication. With Spanish being the second most spoken language in America, it is important to have Spanish speakers to meet industry demands. There is an abundance of Spanish speakers in Mexico and other countries in Latin America to help meet that need.
Cultural differences are less of a barrier for nearshore locations. Familiarity with U.S. culture and processes is also more likely. Expatriates are increasingly relocating to nearshore regions, which adds the benefit of more seamless communication and understanding.
4. Advantages over offshoreTraveling to offshore locations is time-consuming and more expensive. Some locations, such as the Philippines, have become an oversaturated market. Although offshore locations are often less expensive than nearshore ones, the performance of nearshore locations far outweigh the difference in cost.
5. Focused attention on core functionsTo remain competitive, it’s advantageous for companies to invest more time in their core competencies. Nearshore outsourcing allows companies to put their time and money toward their primary goals without being burdened by extra tasks.
6. Protection Under the USMCACompanies with outsourcing partners in Mexico or Canada fall under the United States - Mexico - Canada Agreement, (USMCA). USMCA is a free-trade agreement among the three countries and protects companies doing business within them in regards to data management, trade secrets, and other outsourcing issues.
7. Cost-effectivenessOffice space, utilities, insurance, maintenance costs, and labor are all less expensive in nearshore locations (vice onshore).
Companies who outsource services like customer support are seeking more than simply a lower-cost solution and proficient English speakers. They are attracted to scalable solutions, high-quality management, stability, and modern technology. It’s also important to businesses for outsourcing services to understand customer needs with a commitment to service excellence.
Discover how RUI can streamline nearshore outsourcing for your business
Our processes, advanced technology, and focus on customer care will allow your business to thrive. We pride ourselves on top-notch customer engagement. Contact us to see how nearshore outsourcing benefits your company!