Software development nearshoring (IT nearshoring) is a new popular trend in the global IT outsourcing market. It is often confused with general outsourcing and offshoring terms. So before jumping to conclusions let’s shed some light on the basics.
The software development market is growing rapidly and the demand for developers exceeds the supply in many countries. Meanwhile, the cost of recruiting and retaining developers in the US, UK, and other Western European countries is quite high.
It is estimated that there is a shortage of nearly 1 million software engineers in the US alone. The number of open jobs for software developers grew by 32% from 2020 to 2021, while the number of applicants grew by only 8%.
This enormous talent gap can’t be filled quickly, so the companies willing to continue the digital transformation of business operations must find a way around it.
Nearshore outsourcing is a type of IT outsourcing where companies outsource software development to a neighboring country. The main difference between nearshoring and offshoring is the geographic location of the service provider.
Offshore outsourcing implies working with a service provider located in a different time zone, often in a different hemisphere. Nearshore, on the other hand, implies working with a company in a neighboring country or at least in the same time zone.
For example, a US company can consider nearshore outsourcing to Canada, Mexico, or South America. A UK company can consider nearshoring to Ireland, the Netherlands, or Eastern Europe.
Software development nearshoring can be up to 60% cheaper than traditional onshore models, making it a more budget-friendly option for many companies.
The global average salary for a software developer is $41,450 per year but can range from $24,000 to $85,000 per year depending on the country. The cost of living and doing business in the US, UK, and other Western European countries is also quite high.
For Software development nearshoring to Eastern Europe can help companies save on labor costs while still getting access to a large pool of talented developers. Labor costs are not the only factor that determines the cost of software development.
For more information regarding nearshore software development services rates please take a look at this article: https://nxtide.com/offshore-development-center/global-offshore-software-development-rates-comparison-by-country/.
Nearshoring provides companies with access to talented software developers in countries with strong technical education systems. There are several regions with large talent pools in the world like India, China, South America, and Eastern Europe.
Each of these regions has its own unique strengths and weaknesses. India has the largest pool of software developers but the quality of education and English language skills vary greatly. China has a strong technical education system but the cultural differences can be a challenge.
South America has a growing pool of talented developers but the cost of living, corruption and obstacles to doing business is quite high.
Eastern Europe has a large pool of talented developers (estimated up to 2 mln) with good technical education and language skills. Taking into account the suitable time zones and cultural matches makes it a leader in our rank.
Nearshoring services can help to shorten project timelines by having developers working in different time zones. For example, a US company can nearshore to developers in Eastern Europe. While the US team is sleeping, the Eastern European team can be working on the project. This overlap in work hours can help to get projects done faster.
Nearshoring can help to mitigate some of the risks associated with offshore outsourcing, such as language barriers and cultural differences. When nearshoring, companies can choose a provider in a neighboring country with similar cultural values. This can help to reduce misunderstandings and miscommunications.
Nearshoring arrangements tend to be more flexible than traditional outsourcing models, making them ideal for companies that need to be able to scale up or down quickly.
Nearshore service providers (nearshore companies) in neighboring countries are often more willing to negotiate shorter contract terms, making it easier for companies to end the relationship if they are not satisfied.
Nearshoring can help to improve the quality of software development projects by giving developers more time to work on each task. The shorter timelines associated with nearshoring can also help to improve the quality of work as developers will have less time to make mistakes.
IT Nearshoring services can help to reduce employee turnover by providing developers with opportunities to work closer to home. Developers who nearshore to neighboring countries are less likely to experience homesickness and culture shock, which can lead to them quitting their jobs and moving back home.
Nearshoring can give companies more control over their software development projects by allowing them to select and manage their own team of developers. With offshore outsourcing, companies often have to rely on the service provider to select and manage the developers. This can lead to communication problems and a lack of transparency.
Nearshoring services can help companies stay ahead of the competition by giving them access to the latest technology and tools. Nearshore partner companies in neighboring countries are often up-to-date with the latest trends and technologies, which can give companies a competitive advantage.
Nearshoring can improve customer satisfaction by ensuring that projects are completed on time and to the highest possible standard. The close proximity of nearshore service providers can also help to improve communication and collaboration, which can lead to a better customer experience.
Cooperating with the nearshore software development company has many advantages.
The main ones are:
– Nearshore companies have a deep understanding of the local market and can help you to start your operations faster.
– Nearshore partners usually have a well-developed supply chain of software developers – Nearshore companies often have a network of trusted partners that they can rely on to get the job done.
– Nearshore companies are typically more flexible and agile than their offshore counterparts, making them better able to adapt to changing market conditions.
– Nearshore companies are often more responsive to customer needs and can provide a higher level of customer service.
– Nearshore companies usually have a lower turnover rate, which can help to reduce the risk of project delays.
If you are thinking about using nearshoring services, there are a few things to keep in mind. – First, Nearshoring is not a magic solution that will fix all of your problems. It is important to carefully select a partner company that you can trust to deliver quality work on time and within budget. – Second, Nearshoring is not right for every project. Before you commit to a Nearshore arrangement, make sure that it makes sense for your specific project requirements. – Finally, Nearshoring can be a great way to improve the quality and efficiency of your software development projects.
There are a number of different ways that companies can set up their offshore / nearshore development office in Poland. One option is the Build-Operate-Transfer (BOT) model. Under this model, the local software development company (partner) sets up and operates the offshore / nearshore development office for a period of time (usually 3-5 years), after which it transfers ownership of the office to the client. This BOT model has a number of advantages you can read in this article.
Opening a Nearshore Software Development Office in Poland can be a great opportunity for businesses looking to outsource their software development projects. By partnering with a reliable and experienced nearshore development company, you can get access to a team of skilled software developers who can help you deliver high-quality projects on time and within budget.
Looking for a Nearshore Development Office in Poland? Contact us now! We are a reliable and experienced nearshore development company with offices in Krakow, Warsaw, Katowice and more.
NxTide is a specialized company focusing on building local, Software Development Teams or larger Software Development Centers in major cities in Poland. We take care of all recruitment and quality control processes making it faster and more cost-effective for you. Here is some more information about our expertise: – Over 7 years experience in creating a variety of software development teams – Over 60 teams and 300 engineers successfully hired and deployed – Several dedicated HR and IT Project Management Teams acting on your behalf.
Please take a closer look at a dedicated and flexible offer we have prepared based on market needs:
1) Software Development Teams: dedicated to clients looking to expand their software development teams or create small remote teams from scratch.
2) Offshore Development Center: dedicated to larger and permanent projects. We’ve implemented the innovative Build Operate Transfer model to make the whole process faster, more efficient, and transparent.
3) Nearshore Software Development Office: dedicated to larger and permanent projects within the same region, continent.
Over our 7-year company activity we have helped many US and EU companies to successfully build Software Development Teams and Software Development Centers in a variety of locations in Poland.
Interested? – Let’s discuss your case on a call.
Marcin Dziedzic, CEO of Pragmatic Coders and NxTide.
Over 0,8M population, 13% of total IT Engineers supply
Over 1,8M population, 24% of total IT Engineers supply
Over 0,7M population, 12% of total IT Engineers supply
Over 1,8M population, 9% of total IT Engineers supply
Over 0,7M population, 8% of total IT Engineers supply
Over 0,7M population, 7% of total IT Engineers supply
Over 0,6M population, 6% of total IT Engineers supply
Over 0,5M population, 4% of total IT Engineers supply
IT Outsourcing, Offshoring & Nearshoring in Poland
All rights reserved by
Pragmatic Coders Sp. z o. o.
Aleja 29 Listopada 20 31-401 Kraków Poland