The special case of outsourcing when software development is close to the client’s workplace is called nearshoring. Also known as off-site outsourcing, nearshoring is an outsourcing model where the client hires a dedicated team which works remotely, but not so remotely that both sides lose contact with one another.
What Is Nearshoring? Examples
Let us look at an example, for instance Brussels.
India and China are considered offshore locations since they are thousands of miles away from Brussels, and between different time zones.
Countries in Eastern or Middle Europe such as the Czech Republic or Belarus are considered nearshore locations, since they are close in distance, i.e. they can be reached with a same-day flight, and are between zero and two time zones away.
Main reasons for outsourcing
Outsourcing proves to be an effective way in which a company can reduce its costs and retain focus on the core aspects of the business. If you have ideas, but hands and brains are missing in your company, outsourcing specialists can be a fast and economic option.
Main reasons for Eastern Europe nearshoring – Highly-skilled labour
The former Soviet Union had a strong educational emphasis on engineering and the sciences. As a consequence, many of the countries in this region today have a highly-skilled workforce in areas such as computer science, but at much lower labour costs than in Western countries.
Main reasons for Eastern Europe nearshoring - Cultural similarities
Some companies believe that Eastern Europe has a distinct advantage over places such as India when it comes to outsourcing, because employees tend to take a more collaborative and less process-driven approach to projects.
The guys in India said yes to everything, copied the mistakes we had deliberately put in there, and didn't ask us anything about the business - it was all very systematic. The team in Russia looked at our proposition, asked if it was functional, noticed the mistakes and asked us why we did things in this way. They are more challenging and had much better engagement.
Typically India is good at processing in a factory model, doing things quickly and being cost-efficient, whereas Eastern Europe is a better destination for more experimental tasks.
Main reasons for Post-Soviet Countries nearshoring – Lower cost of living
Since they are not in the EU, Ukraine and more recently Belarus, have comparatively lower prices when compared to Poland, and with cost of living lower than places such as Moscow and St. Petersburg
Cultural similarities, highly-skilled labour, a more convenient time zone for European clients and lower cost of living make nearshoring from post-Soviet countries such as Ukraine or Belarus very attractive to Western companies.