Nearshoring Numbers: Does the strategy really stack up?
At WebCreek, we’ve always stood by our nearshoring strategy. Experience has taught us that it saves our clients time and money, that it brings together a diversity of minds, and that it’s truly the most productive way to develop greatness. But we admit it: we’re biased, convinced by 20 years of nearshoring efficiency. For this reason, we want to crunch the numbers. Does nearshoring really make that much of a difference? We’ve measured according to efficiency, productivity, and creativity, and let the stats do the talking.
Let’s face it, efficiency boils down to two key factors in the business world: time and money. With nearshoring in Latin America, companies become more efficient in both. By working in the same time zone, offices save a 12+ hour lag in conversations. They can collaborate in real time, with meetings that avoid late-night calls and delayed responses. Likewise, executives save a 22+ hour plane ride for travel between offices (Meyer, 2019). Monetarily, businesses save 30%-60% (compared with North American offices), with currency exchange rates that allow for well-paid jobs in the local context, while still offering competitive prices to customers (Corredor, 2018).
Price cuts do not have to come at the cost of quality, contrary to many traditional offshore models. Whereas offshore locations tend to function at merely 35%-50% productivity rates (as North American or European offices), nearshoring offices “experience the same or comparable productivity rate to that of the location from which the jobs were deployed” (Boersen). That is, nearshore offices tend to be twice as productive as offshore offices, retaining the top-notch quality demanded by leading customers.
For US and Canadian companies, nearshoring locations stretch across Latin America. Spanning Central and South America and including over 11 countries well-known as tech hubs, the region holds a diversity of people and cultures. And higher levels of diversity likewise fuse new approaches to problem-solving, innate adaptability, and more creative innovation (Gomez, 2018). These rising tech powers, likewise, are investing in their infrastructure, in order to continue offering top creative talent. For example, Mexico now offers tax breaks and funds to “aid the creative industry,” while Colombia is busy investing USD $6.5 billion into “defining the economic nexus of creative and digital industries, blending Colombia’s rich cultural heritage with its high-tech value proposition” (Ammachchi, 2015)(Ward, 2019).
There we have it, gathering our experience and research into one, final verdict: nearshoring really is the best strategy for efficiency, productivity, and creativity. It combines the best of all business worlds, into a single time zone that never misses a beat in providing quality innovation.