Due to Statista, the average time to hire a skilled specialist is 38 days. The recruitment process consists of finding suitable candidates, reviewing their CVs, conducting several stages of interviews, checking the test task, and finally hiring. And that’s not all. After being hired, the employee undergoes orientation and learns the company’s values and work processes. Generally, the onboarding process takes three months. Moreover, some projects require temporary niche specialists.
How to deal with time-saving and getting suitable specialists? This is when IT Outsourcing steps into the game. In this article, we will talk about onshore vs. nearshore vs. offshore outsourcing. Read to the end to find out how to choose a reliable outsourcing provider.
Table of Contents
- IT Outsourcing Cooperation Models
- IT Outsourcing types
- What is the difference between Onshore vs. Nearshore vs. Offshore?
- Steps to follow when looking for an outsourcing partner
IT Outsourcing Cooperation Models
IT Outsourcing is a transfer of technical tasks or processes to third-party specialized executors using subcontracting. There are various outsourcing types and models that businesses may use for their purposes.
Depending on the type of services provided, there are four main Outsourcing models:
- IT Staff Augmentation is a temporary expansion of your team with the help of subcontracting specialists. This model is used in the following cases: busy seasons, specific projects, and the lack of programmers.
- Dedicated Development Team refers to getting a composed team that will work on certain tasks:
This is a good solution for businesses that do not yet have their own resources to cover some part of the work.
- Project-based Outsourcing is a cooperation with a provider to accomplish required tasks on a time and material basis. Thanks to this model, you can delegate software development or website creation to specialists.
- Offshore development center is the creation and management of an office in another country to save money and resources.
The type of outsourcing depends on the geographical location of the company with which you intend to work. Let’s figure out the definitions and examples of onshore vs. nearshore vs. offshore outsourcing.
IT Outsourcing types
- Onshore outsourcing involves work with a partner in your country.
- Nearshore outsourcing is a partnership with a nearby country that is in the same or similar time zone. For example, an American company works with an outsourcing provider in Mexico.
- Offshore outsourcing means cooperation with distant countries that are in a completely different time zone. An offshore for the USA would be Eastern Europe.
What is the difference between Onshore vs. Nearshore vs. Offshore?
- Onshore. This is the most expensive solution. Statista states that IT professionals from North America have the highest salaries. Hiring an app developer from the United States costs about $60-100 per hour.
- Nearshore. Be prepared to still spend a lot, but less than in the first type. For example, the average rate for a developer from Argentina is $25-49 per hour.
- Offshore. This type gives you the most opportunity to save on costs. With offshore outsourcing, you have access to qualified specialists from different countries who can do the same work for less money. For example, Node js developers for hire from Eastern Europe may cost you from $20 to $40 per hour.
- Onshore. IT specialists from the USA are qualified and experienced, but demand for these developers far exceeds supply. In order to find the necessary expert, you will need to invest a lot of money and time.
- Nearshore. As the talent pool is extended with nearby countries, it can take less time to find skilled professionals that fit the project requirements.
- Offshore. A large pool of talent offers you a variety of choices, starting from Eastern Europe countries and ending in Asian countries. You do not limit yourself by borders and choose a specialist based on your needs and budget.
- Onshore and nearshore. Due to the close location, the culture at work is the same or quite similar for everyone. You will not have to expect any disagreements in doing business.
- Offshore. The language barrier can become one of the obstacles in conducting communication. Using this method with the cultural differences involved can cause project ambiguities. But training programs that explain the values and culture of another country can often eliminate this problem.
- Onshore. Always real-time communication.
- Nearshore. The difference in time zones is about 1-3 hours, so the communication will take place almost at the same time.
- Offshore. With offshore type, there are always 7-15 hours of time zone differences. If the two parties have agreed to cooperate, this time difference can be a significant advantage. By the beginning of the working day, all the work will be done, and you will have enough time to review and make your edits. Moreover, a lot of outsourcing companies have implemented evening or even night shifts to maintain instant contact with you.
- Onshore. Personal interaction is possible.
- Nearshore. Mostly through tools for online communication. A few time-consuming business trips are available for on-site communication.
- Offshore. The projects can be managed through tools for online communication, for example, Slack, Zoom, or Google Meet.
Steps to follow when looking for an outsourcing partner
- Study the company’s portfolio, learn information about their internal processes, ask for relevant case studies similar to your request, and get an approximate estimate for your project.
- Read customers’ reviews and references. You may get honest opinions about the services the company provides.
- Check their ratings on Clutch. It evaluates companies based on their client reviews, hourly rates, company expertise, and market presence. Also, you can use TheManifest or GoodFirms to find developers.
To sum up, thanks to outsourcing, you are getting a lot of benefits, such as saving time and money, expanding your business with professional developers, and receiving expert opinions in successfully completing your project. Considering onshore vs. nearshore vs. offshore outsourcing, you have to compare such factors as costs, talent pool, cultural features, time zone, and project management. The choice is based on the goals your company wants to achieve at the end of the day.
What is nearshore outsourcing?
Nearshore outsourcing means working with a third-party company from a neighboring country to effectively deliver IT products.
What is offshore outsourcing?
Offshore outsourcing is cooperation with IT service providers from countries that are located in other time zones.
What is the difference between onshore and offshore outsourcing?
Onshore outsourcing is a partnership with service providers from the same country as your company. In contrast, offshore outsourcing deals with companies with considerable time zone differences.