How Nearshore Staffing Can Save You Dollars
Executive Summary: Nearshore IT staff augmentation offers companies multiple opportunities for saving money immediately and over time.
Article
8 min read
IT leaders are facing a big challenge today.
On the one hand, demand for tech talent is higher than ever. That makes it difficult to find top people.
“The demand for highly skilled software developers continues to grow. IDC, a leading market intelligence firm, predicts a shortfall of four million developers by 2025...”
-Forbes, Sept. 12, 20221
On the other hand, the global economy isn’t at its strongest. That makes it important to keep business costs low.
So, how can companies gain the benefit of world-class tech talent while saving money?
The answer is Nearshore IT staff augmentation.
“Looking for talent beyond the location of the business seems less radical amid the workforce and workplace changes prompted by COVID-19.”
-Gartner, June 27, 20222
Especially since cost savings top the list of reasons that companies outsource.
But first, what is Nearshore IT staff augmentation, exactly?
Nearshore staff augmentation involves outsourcing talent from countries with the same or similar time zones.
Nearshore outsourcing avoids the time lags of Offshore outsourcing. By tapping talent located in the same time zone or similar time zones as your company, Nearshore staff augmentation has similar potential for real time collaboration as Onshore outsourcing.
The talent’s nearby location also means better communications thanks to sharing a similar language, work culture and work ethic.
In this article, we’ll explore 12 ways Nearshore IT staff augmentation can save companies money.
By working with an established Nearshore IT Staff augmentation partner that has a high-quality talent pool, companies can expect to lower their expenses immediately and for as long as they use the service.
NOTE: Cost control is just one of 7 key factors to consider when determining if Onshore, Offshore or Nearshore staff augmentation is right for you. Learn more by clicking here.
TALENT-RELATED
The first 4 ways Nearshore IT staff augmentation can save companies money are all talent-related.
NUMBER 1: Lower Wages
NOTE: This is the most significant of the 12 ways we’ll look at in this article.
Reducing labor costs has always been one of the top reasons for IT outsourcing.
That motivation is greater than ever today as we continue to come out of the shadow of the global pandemic.
Stock market downturns, mass layoffs in the tech sector, and less access to low-cost capital for business expansion are just some of the reasons companies are under greater pressure to make their dollars go further today...while still getting all their work done.
One proven and immediate way to do that is by reducing labor costs through outsourcing.
In particular, Nearshore IT staff augmentation offers a middle ground between Offshore and Onshore outsourcing: wages aren’t as low as Offshore but are significantly less than Onshore.
For example, North American companies can expect labor savings of 30 to 40%.
NUMBER 2: No Deductions or Payroll Obligations
Nearshore IT staff augmentation enables you to access top talent without the costs of employee-related deductions or payroll obligations.
Think of it this way: you’re only paying for the WORK and NOT paying for having a WORKER.
NUMBER 3: No Benefits or Employee Compensation Obligations
Benefit plans and pensions are attractive incentives when recruiting talent. But they’re also very expensive for the company. With Nearshore IT staff augmentation, both sides understand and agree that those incentives aren’t necessary, which can save you significant costs in the long term.
NUMBER 4: Flexibility + Reduced Attrition
Increase the size of your development workforce as needed with on-demand talent.
By working with a trusted Nearshore staffing partner, you can lower your attrition rate, build a devoted team, and save money on talent costs.
BUSINESS-RELATED
The next 4 ways Nearshore IT staff augmentation can save companies money are all business-related.
NUMBER 5: No Recruiting Costs
When you hire talent, you have to pay your HR team to manage that process.
But with Nearshore IT staff augmentation, it’s like you’re also outsourcing the recruiting process. The staff augmentation service you work with handles recruiting their own pool of talent.
That’s a big deal, since:
the average recruitment time for tech/software developers is from 24 to 40 days4
the average cost per hire across all non-executive positions is $4,6835
the average cost per developer hire is 12% of their annual salary6
That means you get access to hand-picked talent while avoiding the cost, time and effort that recruiting normally involves.
NUMBER 6: No Training Costs
With Nearshore IT staff augmentation, it’s like you’re also outsourcing the training process.
In some cases, the talent will take it upon themselves to get training. In other cases, the staff augmentation service might facilitate training.
Either way, the talent comes to you with the needed training in place at no extra expense to you.
Whether your technology stack includes the likes of React, Node, Mulesoft, Salesforce, or any other leading tech solution, you simply request the certifications or qualifications you need while leaving the training costs and concerns to others.
NUMBER 7: No Post-Hire HR Costs
With employees, you not only pay your HR team to manage the recruitment process.
There are also post-hire HR costs related to everything from initial onboarding to ongoing performance management.
Not so with Nearshore IT staff augmentation. Since the talent aren’t employees, you save on your HR-related costs.
NUMBER 8: No Office Space or Equipment Costs
Working with Nearshore IT staff augmentation involves tapping into remote talent.
That means you reduce your costs related to office space and equipment purchasing and wear-and-tear.
EFFICIENCY-RELATED
The next 4 ways Nearshore IT staff augmentation can save companies money are all efficiency-related.
NOTE: This section assumes you’re working with an established Nearshore IT staff augmentation partner that has a high-quality talent pool that’s a good match for your time zone, work culture and language.
NUMBER 9: Leverage the Time of Others
Nearshore IT staff augmentation enables you to quickly add the time of others to your existing team.
That means faster project turnaround and quicker time to market.
In turn, that increase in efficiency can translate into business operations savings (not to mention increased sales and revenue).
NUMBER 10: Leverage Top Talent to Do More in Less Time
High-quality Nearshore IT staff augmentation services give you access to large pools of highly specialized talent.
Superior levels of expertise and training can translate into superior performance, with more getting accomplished in less time.
That accelerated performance means reaching your goals faster and with lower wage-related costs.
It also enables you to gain the agility and expertise your company needs to adapt to an ever-changing competitive landscape.
NUMBER 11: Integrate External Talent with Internal Team
The tech world was already moving toward a remote or hybrid work reality. Then COVID-19 greatly accelerated that trend.
Today, the remote worker is the “normal” worker in many cases, especially in tech-related roles.
According to The Economist, only 13% of the jobs posted in a tech-related thread in 2011 mentioned remote work. By 2021, more than 75% mentioned remote work.7
That trend toward remote work means you can use Nearshore IT staff augmentation to integrate external and remote talent with your internal team, whether your people are in-office or remote themselves.
Since Nearshore talent works in the same or similar time zones, they can fully participate in Scrum teams, unscheduled meetings, and real-time project team oversight and reporting.
The result is increased team output without incurring any costs to adjust your normal internal work process...or any of the other costs mentioned earlier, such as recruiting, training, ongoing HR processes, etc.
NUMBER 12: Paired Programming for Superior Expertise Sharing
Nearshore IT staff augmentation also offers the advantage of real-time paired programming.
That means you can combine outsourced industry expertise with your team’s institutional knowledge, which is often the most efficient and cost-effective approach to expertise sharing.
Paired programming can also help deliver team growth while maximizing performance, all without incurring the traditional costs associated with training programs.
SUMMARY & NEXT STEPS
Nearshore IT staff augmentation offers companies multiple opportunities for saving money immediately and over time.
It’s no surprise that the best results will come from working with an established Nearshore IT staff augmentation partner that has a high-quality talent pool.
At Launchpad, our same-time-zone Latin America team of experts are your answer to gaining the benefit of world-class tech talent while saving money.
“The quality of the people and domain knowledge at Launchpad Technologies is impressive. They take hiring their team seriously to ensure not only that their team has the competency and skills for the job, but also the culture and personality fit of their client.”
-Chris Tiernan - Head of IT at Splunk
Contact Launchpad to learn about how we can support you in your technology efforts. We’ll work with you to determine which solutions are the right ones for you and your team. Email: info@golaunchpad.io or call anytime at 1 (800) 326-0188
Learn more here.
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Launchpad Technologies Inc. - Nearshore Staff Augmentation
Launchpad’s Nearshore Staff Augmentation services enhance your team through technical staff with the right skill sets at the right time. Gain the agility and expertise you need to adapt to an ever-changing competitive landscape. Get our same-time-zone Latin America nearshore delivery team of experts working for you...without the headaches of traditional offshore.
Let’s connect: info@golaunchpad.io or call anytime at 1 (800) 326-0188
Learn more: https://www.golaunchpad.io/staff-augmentation
Sources:
2. https://www.gartner.com/smarterwithgartner/how-to-look-for-the-right-digital-skills
3. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-deloitte-global-out-sourcing-survey-2020.pdf
4. https://www.glassdoor.com/research/time-to-hire-in-25-countries/
6. https://enterprise.thesoftwareguild.com/recruit-developer/
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