Outsourcing is now on everyone’s lips and it has become common practice to externalize parts of a project. European countries are big on outsourcing, but the question is which is better – going off to far countries like India or staying close? There is one solution and it is called Nearshoring.
Why should you outsource?
The main reasoning is financially driven, meaning that it saves money to contract outside help. This way the local personnel remains stable and contracted expertise can be replaced when unsatisfying. Plus, the number of specialists needed far exceeds the supply on site. Therefore, outsourcing is effective, cheaper and more flexible.
Drawbacks of off-shore contracts
If the main goal of your company is to cut costs consistently, then offshoring looks amazing. Prices for skilled professionals are significantly lower in countries like India or China.
Despite the appealing low cost, there are many other impediments when you work with a team that is in a different time zone with different cultural habits and work ethics. Technology facilitates communication with all parts of the world, but the time frame is almost never convenient for all parties involved. Not to mention holidays and legal days off that don’t match.
Communication and constant collaboration is a big factor in productivity.
Work ethics & culture
Distant countries often have very different organizations inside the workspace. Many use hierarchies still which can lead to time-consuming processes merely because the outsourcing company cannot move along without approval.
Cultural habits such as not refusing someone could impose problems. If an offshore company accepts a project only to be polite they might cause damage or delays in the process.
Data protection is another factor. Working in a different legal context, they might have a slightly different understanding of data handling and disclosure agreements.
When you contract near shore specialists chances are the difference gap is much smaller making communication and business interactions easier.
Europe has made great progress eliminating borders and limitations. Legal matters are simpler now, wages are still much lower in certain areas and the market is booming with trained professionals.
This does not mean that cultures are not different and glitches still happen, but the core values, work requirements, and understanding of efficiency are similar.
The timeframe is also advantageous. Differences in time zones are on average 1 or 2 hours plus or minus. Some countries are even in the same time zone with no need to worry about office hours.
Most importantly, a lot of talent is generated in Eastern Europe countries through schools or informal training or self-learning which creates a wide range of candidates eager to relocate or collaborate.
In conclusion, outsourcing will continue to be a good tool for reducing costs and getting work done. Depending on each company’s goals, deciding what fits you best when outsourcing is an internal task. Nearshoring is a valuable option because it not only saves money but also time, stress, communication errors or cultural barriers.