Nearshoring is the transfer of tasks, processes or roles to a nearby, low cost country. In recent years, Western Europe has shown huge interest in the Nearshoring opportunities of Eastern Europe. The Nearshoring business model overcomes most of the difficulties associated with Offshoring to distant countries and provides highly-qualified, less expensive workforce.
Nearshoring to Eastern Europe provides numerous advantages to companies of all sizes and industries. However, it should be stressed that companies should look to Nearshoring to Eastern European countries that are members of the European Union, which provides advanced regulation, political stability, improved communication infrastructure, qualified resources and lower labour and operating costs when compared to companies in Western Europe.
Eastern European countries have a strong emphasis on education and well developed educational systems. In countries like Bulgaria there are almost 60,000 students who graduate per year from 50 universities serving the needs of modern businesses. The Eastern European workforce is well educated, multi-lingual, highly skilled and loyal.
One main reason for Nearshoring is cost reduction as Eastern European countries offer lower labour and operating costs for highly–qualified employees.
Nearshoring within the same continent has its advantages, especially when compared to Offshoring to distant locations. Closer companies tend to have historical links that increase the cultural compatibility and alleviate language problems. Also, working with countries on the same continent means that clients and employees are operating in similar time zones, helping communication and co-ordination between both parties. Face-to-face meetings are easily achievable because of the lower travel costs and short travel time between nearby countries. The regular meetings, communication and collaboration increase the project success rates and improve business controls. These factors provide greater control and clarity over Nearshored processes and costs. The regular meetings improve quality, increase the efficiency of the team and allow active management and performance measures.
The main risk to companies that Outsource is turning over access of their sensitive data assets. In order to protect your data, Nearshoring within the EU provides additional security because of the common laws within the European Union and also the adherence to the Data Protection Act. Working within the EU minimises the risks of providing information to people outside your company.