Why entrepreneurs and businesses are looking into nearshore remote teams, and why you should be looking too.
We have been hearing the term “outsourcing” for a long me now, and seeing companies outsourcing diﬀerent ac vi es of their businesses, but in the past few years there’s been a new trend and we have been hearing the terms “onshoring,” “nearshoring,” “oﬀshoring” and, of course,
“remote teams.” In this eBook I explain why entrepreneurs, businesses and companies are looking into onshore remote teams and, if not, why they should take advantage of this to become more proﬁtable and grow faster.
First, I would like to start by clarifying the diﬀerences between outsourcing, onshore, nearshore, and oﬀshore.
Outsourcing was first recognized as a business strategy in 1989 and it’s a practice in which the company hires another company to perform and be responsible for existing activities that could have been done internally, giving control to the company providing the service.
When a company outsources an activity, it pays another company to perform that activity and to be responsible for the outcomes of the activity. The company outsourcing the activity doesn’t have control over the team or staff performing the activity.
Outsourcing works well when you don’t want to do recurrent activities because you don’t have the time or people and these activities don’t impact your core business or clients. This practice works well for activities like accounting, taxes, and payroll. The activities can be outsourced to a company in the same country or in another country.
Onshoring, nearshoring, and offshoring.
These three terms refer to the relocation of a business process, activity, or staff while keeping control over the process or activity as well as the staff working on it. The difference between these three terms is where the team doing the activity or process is located:
Onshoring: The team is located in the same country.
Nearshoring: The team is located in a neighboring country (if nearshoring in the USA this would include Canada or Mexico).
Offshoring: The team is located in another country far away (e.g., India or the Philippines).
The main difference between outsourcing and the other three terms is that in outsourcing, the company providing the services is responsible for all of the outcomes and is the one in control, while in onshoring, nearshoring, or offshoring, the original company remains in control and the staff work directly for it. This also applies to intellectual property; in outsourcing, the owner is the company providing the service, while in the other three, the owner is the original company.
You might have heard some great stories about offshoring, but maybe also some horror stories, mostly due to the cultural and time zone differences between the company’s country and the offshore country. When offshoring started, the main goal was to save money; quality came second or even third, so most companies were offshoring into India or the Philippines, which have great talent and really low wages. However, the cultural and time zone differences made it difficult to work seamlessly or to make their offshore teams feel like a part of the company’s culture.
Work culture has changed vastly in the past decade and companies are putting a high priority into building a unique culture so that staff can be highly motivated and loyal and feel like a part of the company. This has proven to have successful results, as each company’s unique culture affords a competitive edge. This has made offshoring difficult as it’s almost impossible to share a company’s work culture to its offshore team.
Companies wanting to have the benefits of offshoring without sacrificing their work culture as well as facing time zone differences are using the nearshoring model and hiring teams from a neighboring country. This way, their remote team or staff becomes an extension of the company, understanding and living out the company’s values and culture and working together to achieve company goals.
There are many benefits to having a nearshore remote team or even just one nearshore staff member. Some of the main benefits include the following:
Don’t forget to Read our eBook about the benefits and how to get the most of a Remote Team.
You can see more benefits here:
Advantages of a remote team vs outsourcing.
Who can benefit from using a nearshore remote team?
Entrepreneurs and companies of all sizes can benefit from having a nearshore remote team or even just one single remote staff member. Nearshoring gives access to the talent, resources, and facilities needed to expand or grow your business as well as to realize projects. As mentioned in Deloitte’s 2017 Global Shared Services Survey, “Shared services centers (SSCs) deliver greater value year after year.”
Being an entrepreneur is not easy. It usually means having a tight budget, lacking staff, and having to wear different hats while doing non-value-added activities. By taking advantage of the benefits and costs of a nearshore remote staff member/team, an entrepreneur can have a full-time executive assistant or a small team of two or three people to help with the activities and growth of a new company.
Businesses of all sizes are also taking advantage of having nearshore remote teams. Fortune 500 firms have been using this model for decades (it started with offshoring their manufacturing plants) and now they have remote teams located in different countries to help them grow and expand.
Nearshore remote teams can give small and medium sized businesses (SMBs) the necessary talent without sacrificing their budgets and scales, allowing them to grow quickly. Having a nearshore remote team allows SMBs to expand their team capacities by having staff or talent that in other ways would be impossible due to costs, as well as preventing them from needing to invest in equipment and infrastructure.
You get what you pay for.
One important thing to always have in mind when considering nearshoring is that, like with everything else, you get what you pay for. There are companies that focus on having the lowest costs, even if it means paying the minimum wage, working in bad office spaces, and having a poor working culture, which incurs hidden costs like high employee turnover rates, poor work quality, retraining, and others. While this might work for some companies, at Remote Team Solutions we strive to provide the best talent and quality, being the place where people want to work. We are proud to pay all of our team members above average rates and we have great office spaces, as we know that having the best local talent with low turnover rates gives our clients huge value while still saving around 60% of their costs.
You should always choose the right nearshore partner, one sharing the same culture as your company.
Mexico is the natural and best place to have a nearshore remote team. It is a neighboring country with a strong cultural affinity to the US, English is its second langue, it is in the same time zone, and it has a low cost of living.
Mexico has a population of more than 129 million people, as well as many globally accredited universities, producing excellent talent and skillful people.
Most Fortune 500 companies have business offices in Mexico.
As reported on Top Highlights from Deloitte’s 2017 Global Shared Services Survey, proximity matters more than ever. While cost remains a top priority when establishing or relocating share service centers, organizations are increasingly emphasizing proximity to existing operations or headquarters.
Why La Laguna Mexico vs other countries.
Same time zone.
Your team won’t be working in the middle of the night.
Only 350 miles south of Texas, La Laguna culture is similar to the USA.
Being the neighborhood of the USA, English is a second language.
No need to travel around the world to see your team; you can also easily fly any of your team members for onsite training.
Biggest talent pool.
Mexico has a population of more than 130 million and is the destination for the Fortune 500 companies due the talent pool and cost advantages. La Laguna is considered as one of the top 5 educational hubs in Mexico, with globally accredited universities and an immense talent pool.
You get 45 hours per team member per week instead of 40.
To be able to get the most out of your remote team, it is important to have the right tools. You can check our eBook – “The Best Tools for Remote Teams”, where we present what we think are the best tools in each category, from communication to project management, and their costs.