A Complete Guide to Nearshore Software Development

Many companies nowadays struggle to hire software developers locally. Fortunately, nowadays geography has become less of a barrier to hiring tech talent. With nearshore software development, you can get access to broad pools of developers and have a skilled team built on your terms. Despite its significant benefits, this approach has potential challenges as well. In this post, we will look at nearshore development in detail, consider its pros and cons, and ways to make the most of your cooperation with a nearshore software development company.

What is nearshore software development?

As per the nearshore definition, it's a way to access and hire developers in neighboring countries through a provider specializing in such services. When you hire a nearshore software development company you will enjoy geographic proximity with your remote team and a similar working schedule with your headquarters. An alternative nearshore software development definition is building a team in a similar time zone, which also brings out the most important aspect of this approach – an overlap of business hours.

You may inquire about the “nearshore outsourcing definition,” as yet another way to determine the process of setting up teams in a similar time zone. Here the term “outsourcing” implies delegating your software tasks to a team located in the same time zone, so the concept of “nearshoring” remains the same.

Apart from nearshore software outsourcing, you might have familiarity with other approaches to delegating software development tasks to external teams. Those include onshoring and offshoring as alternatives to nearshore software development outsourcing. Let's take a closer look at them:

Onshoring: It's the process of building a team of developers located in the same country. For example, a company headquartered in LA launches a tech team in Boston. Onshoring can be a costly option, given the salaries of software developers in the USA and Western Europe, which is the main concern of tech leaders nowadays.

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Offshoring: This approach assumes relying on the workforce located in a country with a significant time difference (up to 12 hours). An example of offshoring would be a business located in Germany hiring a team in China. With offshoring, companies expect to reduce expenses and make the most of the global workforce.

It's clear that nearshore software development is the middle ground between onshoring and offshoring. You can benefit from an affordable workforce that's only a few hours away from you.

Comparison of nearshore vs offshore definitions

While the nearshore definition is rather straightforward, it’s best to compare the two approaches to gain a better understanding of each. In the paradigm of nearshore vs offshore definition, we can say that these approaches have a lot in common, but let's take a closer look.

	Nearshoring	Offshoring
Time zone difference	Minimal or no time zone difference	A significant time zone difference
Geographical proximity	Close proximity to your headquarters	Far from your headquarters
Cultural aspects	Shared cultural similarities due to geographical proximity	Potential discrepancies in culture
Communication	Easier communication due to similar time zone	More challenging communication due to time zone discrepancies
Travel time	Shorter travel time and fewer expenses for team visits	Longer travel time and higher expenses for team visits

To sum up this part, we can say in the context of nearshore vs offshore definitions that the nearshoring approach might have an upper hand over offshoring, which brings us to the next question: Why should you hire a provider of nearshore software development services? Below we put together the key advantages and disadvantages of this approach to help you decide if this is the right way for you to go.

Pros of nearshore software development services

Geographic proximity. Nearshore software development focuses on your location, offering you a balanced approach when it comes to the cost of talent and time difference. Unlike building a far-flung team in the Philippines which will be 7 hours ahead of your German office, you can consider a provider in Ukraine and collaborate with the negligible time difference. Another nearshoring example is a US-based team hiring a provider of nearshore mobile app development in Mexico with a 1-2 hour difference.

Access to an affordable workforce. If you're building a product on a shoestring budget, you can find a team that fits the bill via a nearshore software development company. Such companies typically succeed in providing suitable candidates with affordable rates. That's what we at HireTop see as a priority when hiring nearshore devs for our clients.

Simple scaling. Sometimes companies require adding more talent to work on the offshoot of their core project. Such teams are typically considered to be short-term (3-6 months), so it makes little sense to spend money on full-fledged administration and overhead. Instead, you can go with nearshore software development to hire temporary devs and keep them for as long as you need.

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Budget optimization. Nearshore development is a means of saving costs. By hiring the right nearshore software development company, like HireTop, you can forget about such costly activities as payroll, bonuses, recruitment, setting up office space and infrastructure, and more. Moreover, we help companies launch teams in cost-effective locations, such as Eastern Europe (Ukraine, Poland, Romania, etc) and the Baltics. Check out our rate card to see how much you can save with us.

Short distance. A significant advantage of nearshore software development is that it lets you pay team visits without the stress of long flights. With your team located in Eastern Europe, you can fit your business trip into a single business day. Combined with minimal time zone difference, you won't have to suffer from jet lags.

Comparable laws. If you're operating in such data-sensitive industries as banking, fintech, or healthcare, you may want your provider of nearshore software development services to comply with all the regulations. Providers located in the neighboring countries benefit from being close enough to be familiar with and follow all needed regulations.

Fast kick-off. With in-house recruitment, you might spend months looking for suitable candidates. Nearshore software development, on the other hand, lets you skip this time-consuming step and close your vacancy within a few weeks. By partnering with HireTop, you will select technologists for your project yourself after we provide you with pre-vetted candidates.

Cons of nearshore services

While there are some juicy benefits to near shore development, it's not without some shortcomings. Here they are:

It's not the most affordable option out there. Let's face it – there are cheaper alternatives to nearshore software development outsourcing. Despite the obvious downsides of hiring a far-flung team in India or the Philippines, it can be your source of the workforce with some of the lowest rates in the world.

You may face a lack of providers. Chances are the countries with suitable time zones don't have well-rounded pools of IT talent. If that's your case, consider partnering with HireTop as a provider of nearshore software development in such skilled tech hubs as Poland, Ukraine, Romania, Estonia, Latvia, and Lithuania.

You need to have the internal capacity to make it work. Nearshore software development assumes that the client will be involved in all key steps of the process, from recruitment to the development process and communication with team members. Fortunately, the concept of nearshoring is aimed at making the processes of communication and management as simple as possible – if you hire the right provider.

How to make the most of nearshore software outsourcing?

In this part, we compiled several points that will help you approach Nearshore software development with the utmost efficiency.

Define a set of tasks you want your nearshore software development company to tackle. Getting suitable candidates is in the best interest of you and your provider. With that in mind, be sure to provide your nearshore software development partner with a list of planned deliverables to let them search for qualified software developers who will be able to cope with them.
Get a project manager for your nearshore development team. While the concept of nearshore software development assumes no middlemen between you and your external team, it is a good practice to add a project manager to oversee the nearshore team onsite and serve as a point of contact for you. It works well if you lack time to monitor the daily activities of the team.
Choose a provider of nearshore software development you can trust. It's a good idea to work with companies who have a proven track record of companies under their belt. Additionally, ensure all processes are transparent. We at HireTop are always open when it comes to developers' salaries and our fees as a provider.

Your trusted nearshore software development company

HireTop is an Estonian nearshore software development company with Ukrainian roots. We help businesses worldwide gain access to skilled hubs of tech talent across Eastern Europe and the Baltics. Thanks to our experience and reputation as a reliable employer, we can build your all-star nearshore team fast.

We help you staff your team with dedicated software developers who will be baked into your processes and work with your internal team directly. By partnering with us, you will get candidates who suit you when it comes to their competencies, including mobile and web development as well as knowledge of programming languages. We can also cover Blockchain, IoT, AI/AR, and other hot skills. Don't hesitate to send us your requirements and let's build your nearshore team.

Bonus from OpenAI

To select the best nearshore software development company, you should follow these steps:

Define your project requirements and goals: Before you start looking for a nearshore development company, it is important to have a clear understanding of your project requirements and goals. This will help you narrow down your search and identify companies that have the skills and experience to meet your needs.
Research potential companies: Once you have defined your project requirements, you should research potential nearshore development companies to identify the ones that have the skills and experience to meet your needs. You can look for companies through online directories, industry associations, and recommendations from other businesses.
Evaluate the company’s portfolio and references: Once you have identified a few potential nearshore development companies, you should evaluate their portfolios and references to see the quality of their work and the satisfaction of their clients. This will give you a good idea of the company’s capabilities and help you make an informed decision.
Consider the company’s communication and collaboration skills: Communication and collaboration are essential for the success of any software development project. Therefore, when choosing a nearshore development company, you should consider their ability to effectively communicate and collaborate with your team.
Consider the company’s cost and pricing model: Cost is an important factor to consider when choosing a nearshore development company. You should compare the cost and pricing model of different companies to find the one that offers the best value for your budget.
Negotiate the terms and conditions: Once you have selected a nearshore development company, you should negotiate the terms and conditions of the contract to ensure that both parties are clear on their responsibilities and expectations. This will help prevent misunderstandings and conflicts during the project.