The Complete Guide to Nearshoring for North American Businesses

Nearshoring can significantly reduce labor and operational costs. Salaries and office expenses in many nearshore locations are lower than in the U.S. or Canada, which translates to direct savings. Companies can often find equivalent skill sets at a fraction of the cost. Some nearshoring destinations even offer business incentives or tax breaks to foreign investors, further boosting cost efficiency. While nearshore rates may be slightly higher than offshoring to the cheapest overseas locations, the total cost can be lower once you factor in the efficiency gains and lower travel costs – a trade-off many firms find well worth it.

With nearshoring, your remote team works in (or close to) your own time zone. That means real-time collaboration is much easier. There’s no need to wait overnight for an email reply or to schedule odd-hour meetings. Your nearshore colleagues can join calls during your normal business day and address issues immediately. This synchronous working model allows companies to have daily communication at business hours, reducing delays. The result is faster decision-making, quicker turnaround on projects, and fewer miscommunications compared to an offshore team that’s asleep during your workday.

Nearshoring opens access to a broad talent pool beyond what may be available locally. Many nearshore countries have deep benches of skilled professionals in fields like software development, customer service, design, and engineering. For example, Mexico, Costa Rica, and Colombia are packed with skilled workers ready to contribute in specialized areas. By tapping these talent pools, a company can fill roles that are hard to hire for at home or scale up teams faster than the local market would allow. In fact, Latin America boasts over 2 million software developers, and universities in countries like Colombia produce tens of thousands of STEM graduates each year, ensuring a steady supply of qualified professionals.

Working with neighboring countries often means closer cultural compatibility and language alignment. Teams in nearshore locations like Latin America tend to be familiar with U.S. business practices and usually have strong English proficiency (often starting English education from early school years). This leads to smoother communication with fewer language or cultural barriers, meaning less back-and-forth needed to clarify tasks and expectations. Cultural proximity also helps nearshore team members integrate more naturally with your in-house team’s workflow and company culture. Shared (or similar) national holidays, work etiquette, and communication styles can greatly reduce friction. Overall, a nearshore team often “feels” like an extension of your domestic workforce rather than a separate entity.

Colombia boasts a vibrant, educated workforce with a growing number of engineers, IT professionals, and business specialists. Top universities (like Universidad de los Andes and Universidad Nacional) produce over 10,000 IT-related graduates each year, ensuring a steady influx of tech talent. Colombian software engineers are proficient in modern programming languages and even emerging fields like AI and blockchain. English proficiency, while historically low on a national average, has improved dramatically in recent years – Colombia was ranked third in the world (and first in Latin America) for the growth of English proficiency between 2011 and 2018. In major business hubs such as Bogotá, Medellín, and Cali, English levels now surpass the global average, making professional communication seamless. On top of that, Colombian professionals are typically bilingual in Spanish and English – a big plus for serving the 63 million Spanish-speaking consumers in the U.S. This combination of technical skill and language ability means you can build a Colombian team that interacts smoothly with your U.S. team and even with your Spanish-speaking customers. 

In order to support a remote workforce, Colombia has invested heavily in strengthening its tech infrastructure. The country has 10 operational submarine internet cables connecting it to the world (with more under construction), providing robust bandwidth for communications. Colombia actually ranks among the top 10 countries globally for telecom investment as a percentage of GDP (and #1 in Latin America) – this dedication to connectivity caught the attention of the World Economic Forum, which chose Colombia to host the first Centre for the Fourth Industrial Revolution in Latin America. In practical terms, Colombia’s cities offer reliable high-speed internet and modern office spaces that meet international standards, so your nearshore team has the tools they need. Moreover, Colombia’s time zone (COT) is the same as U.S. Eastern Time for part of the year, and only a one-hour difference otherwise (due to no daylight savings). This perfect time zone alignment with the U.S. allows for real-time collaboration throughout the workday. A manager in New York or Toronto can easily work with a team in Bogotá with minimal scheduling friction. And if an in-person meeting is needed, Colombia is just a few hours’ flight from most major North American cities – you can have breakfast in Miami and lunch in Medellín. 

Colombian culture has many parallels with Western culture, partly due to Colombia’s longstanding economic and educational ties with the U.S. and Canada. Business practices in Colombia will feel familiar to North American managers – from common working hours (Colombians typically work Monday-Friday daytimes, similar to the U.S.) to a collaborative team-oriented ethos. Many Colombian professionals have experience working with U.S. clients or companies, and they adapt quickly to American business expectations. A recent survey by the Colombian-American Chamber of Commerce found 85% of Colombian software developers reported high satisfaction working on cross-cultural teams. This reflects their ability to integrate and communicate well in bi-national projects. The Colombian legal and business environment is also accommodating to foreign companies: Colombia offers tax incentives for tech parks and has free-trade zones to make setting up operations easier. The government has been supportive of the outsourcing/BPO industry, recognizing it as a growth engine. 

Look for a partner with a proven history of serving clients in your industry or with similar needs. Do they have case studies or testimonials for building teams or running projects like yours? A partner experienced in, say, software development outsourcing or call center management will understand the common pitfalls and best practices. Proven success with other North American companies is a strong indicator that they can deliver for you as well.

One of the biggest values a nearshore provider brings is their ability to find and keep the right people. Evaluate their recruitment network and process – how do they source top talent in the local market? Do they have a large database of pre-vetted candidates? Also, ask about their retention strategies: the last thing you want is high turnover on your offshore team. Good partners invest in employee engagement, competitive benefits, and training programs to ensure you have a stable, motivated team.

Smooth collaboration depends on more than just time zones. Your nearshore partner should emphasize English language proficiency and cultural training. Many firms will assure you that “our teams speak fluent English,” but verify it – communication is crucial. Also assess how well they bridge cultural nuances. Effective partners will train their staff to understand North American work culture and even your company’s specific culture. This might include aligning working hours with yours, using your preferred project management tools, and fostering an “extension of your team” mentality.

Retaining control over your operations, even when they’re nearshore, is important. The best partners offer full transparency into what your team is doing. For example, you should have the ability to directly manage your team leads, set workloads, and have insight into performance metrics. Avoid providers that box you out of day-to-day management or shroud their processes in mystery. You’ll want regular reports, the ability to visit your team on-site, and open lines of communication. In essence, a good nearshoring partner lets you retain as much control as you desire, while they handle administration and compliance in the background.

Finally, consider whether the partner can scale with you and protect your interests. If you start with 5 employees but next year need 50, can they accommodate that growth? A capable partner will have access to additional talent and possibly multiple delivery centers to scale up your team quickly. They should also have robust IT security and data protection measures. This includes compliance with data privacy laws and certifications (e.g. ISO, SOC2) if you’re dealing with sensitive data. Intellectual property should be safeguarded through clear contracts and NDAs. Essentially, you want a partner who enables growth without compromising the integrity of your operations.