Globalization and digitalization of work have created high competition for companies looking to hire people with certain skills like software development. The increasingly rising demand on the local market triggers higher wage costs and longer timeframes required to find talent. All of this is forcing companies to look for solutions beyond borders. In this article, we’ll take a quick look at IT nearshoring and how to use it to build successful software development teams serving typical business needs.
We all understand that the primary choice for every company would be to have all its resources in-house and we know why sometimes it isn’t simply possible. The second choice is nearshoring (also called nearshore outsourcing), which stands for running software-related activities in a country near your business location (in comparison to offshore location eg. in Asia). It’s very than different from traditional offshoring, as nearshoring has a mix of benefits of in-house and offshore solutions: A nearshore software team can share your location, which facilitates daily communication and collaboration. The nearshoring also has the following benefits:
– The team’s setup costs are much lower because there are no major infrastructure investments required to start nearshore operations.
– Nearshore software development teams have higher quality standards compared with offshoring ones, as they aspire to remain nearshore for future business evolution.
– The team has fewer cultural and language barriers, reduced communication timeframes, and therefore faster delivery.
Nearshore software development locations can be found all over the world, but they are rapidly growing in popularity, now that more and more companies focus on digital transformation. Below you’ll find the best of nearshore software development locations (and some not-so-nearshore) based on popularity. In the next paragraphs, we will try to focus more on a specific one.
India is the most popular place in the world for nearshore software development centers. It’s well-loved by many companies thanks to lower salaries than western countries’ standard rates, high quality of developers, and a huge number of universities producing new skilled professionals every year. There are different regions ideal for various types of projects so it might be worth considering multiple locations when choosing an offshore destination. NearshoreHub has prepared a comprehensive guide about outsourcing to India.
Mexico is another attractive location with oceanic as well as cultural closeness to the US. The same as with other nearshore software development destinations, there are certain regions that specialize in different industries and functions. Nearshore Hub has also prepared a guide about outsourcing to Mexico.
Bulgaria is considered one of the most successful offshoring destinations and currently holds first place among European countries for fastest-growing IT exports (in Europe). It’s not surprising: Bulgaria provides high-level professionals at affordable prices, English proficiency is widespread, and IT companies enjoy government support and a favorable taxation system.
Brazil has always been a great option for Nearshore outsourcing in terms of software engineers’ salary costs in comparison to other locations. There’s also no shortage of high-quality universities producing skilled professionals in computer science or engineering every year (more than 700 colleges), which makes the labor market very competitive.
Ukraine is the 2nd leading country in Eastern Europe (after Poland) when it comes to IT outsourcing and nearshore software development. The quality of Ukrainian professionals is well known, and their labor costs are lower than in most European countries (Poland, for example). The main advantage of outsourcing to Ukraine is that you can hire Web, Mobile, Back-end developers with quite good English language skills
The software developers’ rates in Poland are higher than in Ukraine, but still much more attractive than in Western Europe. In comparison to other locations, this country offers better stability, infrastructure, and higher standards and work ethics (comparable to western countries). The big tech companies have already taken advantage of these facts and opened their local IT R&D Centers (eg. Google). Education level and technical training at universities is also on a very high level. Furthermore, Poland with its rising IT graduates is expected to have over 620k software developers in 2025 reaching almost 25% of the regional supply. This is why we will focus on this country as the preferred nearshore software development team location.
The Philippines was always famous as an offshore outsourcing location for English-speaking work such as customer support or data entry. Nowadays the focus points have shifted towards website design and web application programming thanks to young graduates from colleges pursuing eLearning degrees with IT specializations. Nearshore Hub has written a Guide to Outsourcing to the Philippines you might find useful if you’re planning your outsourcing location in the Asia Pacific.
Egypt currently holds 22nd place on the world economic freedom rating, which is lower than other locations we’ve mentioned above; however, it provides high-quality talent at affordable rates making Egypt competitive enough for nearshore software development.
Malaysia is considered the best choice for companies looking to outsource software development in Asia. The country takes first place on competitiveness rankings among Southeast Asian countries and holds the 35th position among other countries globally. Malaysia’s strong points are a highly qualified workforce, English proficiency, developed infrastructure, and a great number of IT professionals with programming & engineering degrees coming from well-known universities such as Stanford and Berkeley.
Romania is another Eastern European location offering great opportunities for nearshore software outsourcing. English proficiency of the workforce in Romania is considered good, although it doesn’t match the level of English-speaking professionals in other nearshore hubs. The choice of the depends on your company location and needs. If you prefer quality, stability, safety, and good infrastructure you should focus more on nearshore locations in Central-Eastern Europe with a preference to EU countries.
The nearshore market of CEE region is large enough to provide nearshore outsourcing services for all types of companies. The region offers enourmous IT talent pools (over 1 milion) combined with good infrastructure and quality nearshore software development services. The CEE nearshore market is forecasted to grow over the next few years. This can be proved by the nearshore deals concluded in the region. Research of U.S. Investments in CEE nearshore deals shows that 80% of nearshoring companies are located in Poland, Hungary and Czech Republic. This statistics proves high demand of nearshore software outsourcing services provided by global nearshore hubs of Central-Eastern Europe countries.
Team composition can also heavily depend on your company needs… for example, if you are working on a website, the team will need to include web designers as well. Additional roles that you might need to hire: mobile developers, QA automation developers (Selenium), and/or Dev-ops engineers. In fact, every software development team needs to be balanced. It’s a simple rule – to succeed, your team needs great programmers, experienced testers, and outstanding project leaders. The basic structure of nearshore teams should therefore include:
– Back-end Developers
– Front-end Developer(s)
– Quality Assurance Engineers/Managers
– Project Manager(s)
If your budget allows it you can also add business analysts, QA automation engineers (using QTP/UFT or Selenium). There is no golden number when it comes to size. At NxTide we have seen very successful nearshore software development teams with no more than 10 people on board. In fact, we believe that smaller teams perform better in the remote work environment, The real thing you should focus on is “the quality” not quantity.
The nearshore software development location you choose is not the only factor that will influence your success. You will also need to hire the best nearshore software development team available.
When searching for nearshore software developers, it is highly recommended to focus on the holistic strategy called the 3 Cs:
– Communication skills (C): nearshore teams use mostly English as a working language and it’s very important that each team member has good communication skills.
– Capability (C): nearshore programmers need to be highly skilled in their areas of expertise.
– Culture (C): nearshore software development companies tend to create teams based on one culture and achieve success in nearshoring projects when they do so. When we think about nearshore location, we mean company culture and not national culture; therefore your nearshore software development team can be 100% Polish but still have Swedish, French, or American corporate culture and approach towards IT projects.
Knowing how to recruit the people we want is 50% of the success. The other side of the coin is where to find the best employees in a short period of time. We assume that the whole team composition process shouldn’t last more than 6 months. This is not an easy task but it’s definitely achievable.
First of all, you need to build up your local company brand and then promote it in the right places like:
– popular local job boards
– industry forums
– specific Facebook groups
– LinkedIn groups industry
– events (meetups, conferences)
The other strategy worth mentioning is executive search (direct messaging) conducted by your HR department. This approach is more expensive but in the long run, it’s worth every penny. It’s is effective in finding seasoned professionals who aren’t very active on the job market. The other approach is to partner with the local outsourcing partner offering specifically nearshore teams development. There are probably dozens of HR agencies that will promise you everything you could imagine within a short period of time. The truth is that they don’t really know who nearshore programmers are and where to find them. This is why it makes a lot of sense if you partner with a real nearshore software development company (eg. NxTide) that is specialized only in nearshoring services.
Your future, nearshore software development partner should be a company you can trust and rely on. Of course it’s important to make sure that the people you hire are good enough but this is only 50% of the success. The real deal is to understand what your local IT company should do for you – basically, offer full scope of nearshore services not just some random outsourced programmers. You do not want to work with HR agencies or outsourcing companies – but with the real IT partner taking the same risks and burdens to yours. This way is the right way.
Some of the best, specialized, nearshore companies could offer a cooperation model called “Build-Operate-Transfer” (the latest trend in nearshore development services). The BOT is simply a model where nearshore outsourcing partner builds the necessary infrastructure, hire nearshore development team and then transfer all operations into the customer’s hands. (more about benefits of Built Operate Transfer model)
At NxTide we have been working in nearshoring industry for more than 6 years, therefore our clients have never been disappointed with results from one of their outsourcing projects. We know exactly how to find a qualified nearshore development teams and how to set up a proper project management process. Our customers say, that nearshoring works flawlessly every time thanks to our specialized HR teams with a great help of exceptional IT project managers. Would you like to know more? – book a call with us.
IT Outsourcing, Offshoring & Nearshoring in Poland
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