In short, Nearshoring is the outsourcing of professional activities to an organization in a country nearby with lower average wages. Nearshoring can be distinguished from Offshoring, which is the outsourcing of activities to countries that are further away.
But why is this particularly relevant now?
Because of the current tight labour market. This means that the economy is close to full employment, and recruitment becomes increasingly difficult. This in turn places upward pressure on wages. Research indicates that in the second quarter of 2020, the market continues to be tight. This leads to a shortage and scarcity of workers in many professions, which is the case in the IT industry.
This market tightness leads to a shortage of developers in many countries, such as the Netherlands. As a result there are many roles that are left unfulfilled for a longer period. At the same time, however, the number of tech start-ups is growing, requiring more programmers to join them.
Nearshoring! In countries where the ICT sector is growing, it’s extremely popular to become a developer. Nearshoring has a big influence on this, as it provides people with the opportunity to earn more than in other sectors. This brings huge opportunities to countries that don’t have enough capacity themselves and consequently rely on others to continue to grow.
We’ll discuss the pros and cons of Offshoring vs Nearshoring in part 2 of this guide next week. Can’t wait? Download the whitepaper below!