Nearshore Software Development Companies: Pros and Cons

Nearshore Software Development Companies: Pros and Cons
Photo by Lance Asper / Unsplash

With the growing recession, collapsing economies, and political instability throughout the world, institutions all over the world suffer. When institutions suffer, the individuals suffer, and when individuals mess up, their business, work, and overall quality of life suffer. And that’s no good for anybody.

Businessmen, in particular — when faced with a decision to either let their efforts go down the drain or save their sinking ship through an alternate way, will always prefer the latter. And it’s the smarter choice too — some of them will choose a cost-effective way for their business, even without being forced into making the involuntary decision. Do we blame them? Not at all. It’s smart, to say the least.

Today, we’re highlighting the ever-growing trend where individual folks and companies from the ‘more-developed’ part of the world prefer associating themselves with companies from ‘under-developed’ parts of the world. And don’t worry — this doesn’t have anything to do with colonialism or manipulation.

In fact, it has more to do with minimizing those things by bridging the gap between the two economies on opposite ends of the spectrum. Business needs are delegated down the tier and both entities benefit from it.

Today, we’re particularly talking about sourcing developers from nearshore companies. Consider this piece a detailed guide about the topic. Let’s dig more into it!

What is Nearshore Software Development?

The process of leveraging developers from nearby countries (usually at a relatively low cost or some other benefit) is called nearshore software development.

Individuals, development agencies, and companies all over the world are now increasingly outsourcing their work to similar companies and individuals in other parts of the world. Why? The primary reason — the employer entity pays the employee entity on the former’s domestic pay scale.

How is this beneficial for both entities? It’s because the employer company can either hire individuals from the same country at higher prices. Or, they can just hire individuals or companies from a nearby country and use their services for a low price instead.

The employee entity, in this case, usually benefits because they’re usually getting paid the same or more (than they would in their own country). It’s a sad capitalistic synergy but when you think about it, this part is actually the silver lining.

What is the Difference Between Nearshore Development and Offshore Development

The two terms are often used interchangeably now — thanks to Zoom calls and work-from-home scenarios. Nearshore development is when you hire developers from nearby countries. Offshore development is when you hire developers from outside your country.

Since there are thousands of companies and startups operating remotely. Services like development, digital marketing, SEO, content management, editing, etc. — don’t necessarily require an in-house setting.

The requirements can be conveyed on Zoom calls and tasks can be assigned on Trello boards — it’s a simpler world out here.

So if you’re wondering if there’s a way to get work done without burning your pocket and paying half your bank balance on taxation, it’s offshore and nearshore companies or individuals.

Nearshore Development Services are Better: Here’s Why:

  1. The most concerning and worrisome part of offshore outsourcing is the time zone difference — especially when there are complex products and services in question. You’ll need reliable stakeholders from the other end who can guarantee you the required uptime.
  2. The other problem of offshore outsourcing is work quality. If you’re based in the USA, you might not get the required work quality from somebody sitting in the Himalayas with poor internet.
  3. When it comes to Nearshore Development Companies — they’ll usually have an office or associates in your country. Secondly, they’ll have a responsible and professional team who will cater to your business needs despite the slight time zone.
  4. Genesis Engineering originates from New York where we’ve got a proper design and engineering team that collaborates with our other engineering team in Pakistan that works in the same (EST) time zone.

Freelancers or Agencies?

Ask the Right Questions

There are two questions you need to ask yourself before you decide to move forward with a freelancer or agency:

  1. What are your work needs, your anticipated workload, and whether you’ll be needing a group of services?
  2. Can you manage multiple people by yourself?

When to Choose a Freelancer

If the workload is little, you might not have to hire multiple people — in that case, an offshore freelancer would do. In fact, if you don’t have a lot of work, going with a freelancer is probably the best choice you can make for your business.

When to Go With a Company

But if you’ll be needing a complex application designed, produced, and deployed — you might end up needing more than a single guy.

When that’s the case, it’s best to move forward with a company. It’ll save you from the hassle of communicating back and forth with the designers, developers, and managers. You’ll only be communicating with a single face from the company who will bring you up to pace on everything and answer all your questions.

At times, your meetings might be accompanied by the man of the hour — the dev, or the designer. But it’s still all very manageable because the company/agency, as a unit, is responsible. And frankly, a company is almost always the most reliable option too!

The Best Way to Save Money Whilst Getting Results?

If you’re good with multitasking and you’re used to managing multiple people at once, you can go for multiple freelancers as that will likely cost you a lot less money as compared to working with a development agency.

The Pros and Cons of Nearshore Software Development

It must be understood that everything has its pros and cons. While there are people who benefit from hiring developers outside of their country, you’ll also easily come across those who are completely opposed to the idea. And many a time, there’s a reason behind it. Let’s discuss some of the benefits of offshore outsourcing first.

The Benefits of Nearshore Software Development

Cost-Efficient

The primary purpose of hiring software developers outside of your country comes down to one thing — lower development costs. How? The developers are mostly sourced from countries in Africa or Asia.

These developers are usually hired and managed by a representative.

So, why do they agree to work at lower costs? Simple — they don’t.

It’s just that the pay scale in their countries is pretty low. Most of the time, they’re working in great settings and get paid more than their home country’s usual pay scale.

They have competitive salaries yet it’s nothing compared to what a developer in the United States gets paid. Imagine a developer making $5000 per month in the US. You could pay $1500 to $2000 per month to a developer sitting in Pakistan or India for the same amount of work.

Another reason why these developers agree to work at lower rates is that developing countries have weaker tax restrictions. Allowing them to save money that would otherwise be spent on taxes while living in a developed country.

This ultimately turns out as a great bargain between an employer sitting in Canada, the UK, or the US and an employee that works remotely from another country.

When you hire a company for development, you get similar benefits but in a much more collected way.

The interesting part is — these nearshore development companies will almost always have a local office in the country they’re doing business in.

This helps them build trust with the employers and they’re ultimately more reliable to large organizations.

Remote Teams

Remote work and hybrid teams are the way forward. How? Let’s be real, there are so many professionals who prefer working by their schedules. Freelancers, in particular, take on individual contracts that allow them to work at their own pace.

By allowing remote professionals to work in your team, you’ll be making your team much more diverse. The people who prefer to work alone are usually lone wolves. They’re the most reliable folks you can come across. Particularly because they know how to tackle pressure and realize the importance of customers.

The second benefit of having a remote team is that you’ll save thousands and thousands on in-house costs each month. You won’t be paying office bills. You won’t have to rent a place and you won’t have to worry about managing them. It’s that simple!

When you work with Genesis Engineering, you get access to a diverse hybrid team. Reliable resourceful individuals who’ll take care of your project, because that’s all we’ve done. That’s the only way we know.

Quality-Centered Work

One issue that most employers dread when hiring offshore engineers is quality. Frankly, it’s a genuine concern. If you’ve ever had hard luck working with a reckless individual, you’ll know.

This is why we advise that you only work with reputable companies. When you work with freelancers, only use platforms like Fiverr or Upwork where you can hold them accountable through feedback.

Most freelancers would love to provide you with quality work because it means good feedback and ratings for their profile, and that ultimately means more business for the freelancer. That’s how you can get quality for your buck while saving overall costs.

When you work with a company, get on calls with them. Here are the right questions to ask at your first meeting:

  1. If you’re from the US, ask the company if they have a local presence in the United States. It’s much better if they do, even if it’s just a business development associate.
  2. Find out how they manage their teams. Is it in-house or outsourced? In the case of developers, it’s better if the team is managed in-house. Because of the urgent technicalities involved. With designers and copywriters, you can easily benefit from a remote setting.
  3. Ask for their portfolio. See the companies they’ve worked with. Check out their past work history.

Minimal Management

The best part about hiring nearshore teams is — you’ll have minimal management tasks on your end. Perhaps you can get them to join your company’s standup meeting every day. And that 15-minute conversation on the progress they’ve made should be more than enough.

If huddles and stand-ups aren’t your things, just give them a deadline for a set of tasks and catch up on everything a week later.

Long-term Benefits of Building Associations With the Right Teams

In the long term, you’ll have worked with individuals from all over the world. You’ll interact with some of the brightest minds. Not only will it benefit them but it will benefit you. Your business will get a boost. You will strike conversations that will pave way for greater revenue streams.

You see, there’s nothing to lose here, really.

The Cons

The cons are basically just you running into bad luck or not doing due diligence properly. Here are some issues that you can encounter:

  • You might experience issues when it comes to timely deployment and meeting deadlines.
  • You might come across frauds who will waste your time for easy money.
  • You might experience disruption in communication. Make sure to choose a company where employees can speak English properly to report back timely and precisely.
  • If you want the company to work in a specific time zone, converse this timely. At Genesis, we work in all USA time zones and negotiate things down to EST since that best suits our employees.

The Takeaway

To sum it all up, here’s the gist of all that we’ve conveyed in this blog:

Offshore development becomes reliable when it’s accompanied by a local presence. We’ve referred to that as nearshore development. You’re going to save lots of costs when you opt for it. We’ve summed it all up with the primary pros and cons of nearshore software development. Why? Because that’s what we do at Genesis Engineering. And we’ve been at it for over a decade.