This model consists of outsourcing business processes and technology to countries close to the main operation.
In the past decade we have grown used to hearing words like offshoring and outsourcing, referring to companies that decide to migrate some part of the business or operation, to countries where the cost of labor is lower than where the company is based. For example; India and the Philippines have become lower-cost alternatives for companies based in the United States.
After the Covid-19 pandemic in 2020, there was a growing trend from worldwide companies that were looking for options that were closer and still accessible, such as Colombia, Mexico, Chile or Brazil.
This is when the idea of nearshoring became more recurrent in North American companies, since it refers to moving business processes, technology or operations to places that are geographically closer, that have similar work times, and also the cost of hiring is lower than the country of origin.
These are the sectors and industries that benefit most from nearshoring:
Manufacturing
Companies used to outsource activities in China because of the low relative cost, but since the pandemic, companies have been slowly choosing to migrate to nearby countries to protect the company and continue operations in the case of a new global crisis.
Logistics and Supply Chain Management
Due to the Covid-19 pandemic in 2020, after thousands of factories closed around the world, a supply chain crisis emerged that highlighted the need for proximity in logistics operations.
From there, the strategies changed and businesses looked to Latin America to help solve a crisis that enveloped the whole world. The benefits of nearshoring ranged from outsourcing their operations, to being able to adapt more quickly and efficiently to future problems in the supply chains, to reducing travel costs and even shipping.
Customer Support
We tend to keep countries like India or the Philippines in mind when it comes to customer service. But recently it has been seen that countries like Colombia are usually a great alternative in customer support for North American companies due to proximity and time zone, since they would have agents answering calls at the same time of the client, turning out to be a more comprehensive solution.
Information technology
Among several Latin American countries, Colombia has stood out as a hub for digital talent, so it is not surprising to see that throughout the continent the outsourcing of IT functions has increased by more than 150%.
Retail
It has become a struggle for retail companies to remain competitive, so nearshoring is a great alternative to continue to maintain low costs and quality in the customer experience. With this new trend, companies have additional options that are much closer than using China.
Health and pharmaceuticals
The pandemic played a key factor in the nearshoring demand for health and pharmaceuticals as companies opted for much more geographically nearby places to make their business more efficient.
Automotive and Transport
Although the industry continues to go through a great challenge due to the shortage of inventory (due to supply chain crisis),several North American companies have opted for nearshoring as a solution to precisely face the crisis.
Nearshoring has proven to be a great option to protect your business, improve customer experience and even reduce costs. Find out how TCA Staffing might be able to help your business with a nearshoring solution.
Our strategic location in Bogotá allows us to provide a variety of personalized services focused on the logistics sector that are perfectly integrated into the needs of your company. Contact us!
