Debunking 11 Common Misconceptions About Nearshoring in Latin America

Hiring is hard. Sourcing qualified candidates takes a huge amount of resources, interview periods can drag on longer than expected, and many organizations simply can’t fill roles fast enough to keep pace with business growth. 

But still, many employers are hesitant to try the solution of nearshoring to Latin America (LatAm), even though this region is increasingly becoming a hotspot for untapped talent in various industries.

This apprehension often stems from common misunderstandings about nearshoring.

To help disprove some of these myths, we’ll explain the approach of nearshore outsourcing and dispel 11 common misconceptions about nearshoring talent in LatAm.

What Is Nearshore Outsourcing?

Nearshore outsourcing is a strategic business practice in which companies delegate certain tasks or projects to third parties in a nearby country, often in similar time zones. 

For US-based companies, nearshore outsourcing means partnering with providers in Latin American countries. Talented professionals in LatAm are highly educated and versed in various specialized fields.

This close proximity also means cultural alignment, which can lead to smoother integration with existing teams. This detail is immensely valuable for collaborative projects.

Additionally, nearshoring offers additional benefits, like agility—quick team setup and coordination—and responsiveness to changing market demands, which is often harder to achieve with teams spread across vastly different time zones.

11 Misconceptions About Nearshoring in Latin America

When thinking about nearshoring, many might picture a traditional call center or IT support team. The reality is far more diverse and evolved than these outdated stereotypes suggest. 

Let’s debunk some of the most common misconceptions about nearshoring:

Misconception #1: There will be language barriers

The belief that language differences will inevitably lead to communication difficulties is one of the most persistent misconceptions about nearshoring. This concern is largely unfounded, as English skills across the region have seen significant growth.

Argentina stands out for its high level of English fluency, often leading the pack in LatAm. But countries such as Bolivia, Costa Rica, the Dominican Republic, Paraguay, and Chile also rank in the top 60 worldwide. 

Even Mexico, which may not have the same reputation for English proficiency as some of its peers, boasts a considerable and growing number of skilled workers who are fluent in English. 

Misconception #2: Nearshore talent can’t match the quality standards of local talent in the US

The notion that LatAm professionals can’t match the quality standards of US talent is outdated and incorrect. LatAm boasts a wealth of skilled individuals who are a product of its rigorous education system and burgeoning tech industry.

Many have pursued international certifications and understand global best practices, and some have even gained direct experience with US companies. For instance, accountants we have placed at Near have experience working with Deloitte, EY, KPMG, and PwC—all four major global accounting firms. 

This region has seen a significant rise in world-class educational institutions and a vibrant startup ecosystem that equips professionals with contemporary skills and a global outlook. 

Misconception #3: Nearshoring is only suitable for certain roles

A common misconception is that nearshoring is only appropriate for technical roles like IT or data entry. In today’s connected world, remote workers can perform almost any job done in a traditional office setting. 

These include roles in administration, finance, customer service, digital marketing, design, and legal services. LatAm professionals have strong technical skills and bring various skills across multiple industries.

We have placed candidates in 43 industries, filling positions ranging from entry-level sales positions to chief financial officers. Our largest segment is marketing, with IT making up only 4.5% of placements. 

Misconception #4: Nearshoring is more expensive than offshoring

The assumption that nearshoring is inherently more costly than offshoring stems from a superficial comparison of wage rates alone. It’s true that, at first glance, the salaries in LatAm may appear higher than those in some Asian countries. 

However, this view fails to account for the total cost of engagement and the nuanced financial benefits that nearshoring can offer.

When you factor in the expenses associated with time zone differences, language barriers, and cultural barriers that often come with offshoring, the cost benefits of nearshoring become much clearer.

Our clients save an average of $42k annually per hire while needing only up to 21 days to find and hire a suitable candidate. 

Misconception #5: There is a lack of technology infrastructure and skills

There’s a dated belief that LatAm lags in technology infrastructure and that tech talent is scarce. 

Significant investments in high-speed internet, mobile connectivity, and technological innovation hubs have created an environment that supports and encourages remote collaboration and technical work.

In January 2024 alone, the region’s tech startups attracted over $315m in venture funding, indicating strong confidence in its growth potential and technological capabilities. As a result, LatAm is rapidly becoming a hub for innovation and technology.

Misconception #6: Nearshoring means fewer jobs for US talent

With the US still facing significant unemployment rates, there is a common fear that nearshoring removes job opportunities for the domestic workforce. But unemployment isn’t only a symptom of opportunity. 

The current US job market has a significant gap between the number of open positions and the available local talent. In many cases, nearshoring can complement the domestic workforce rather than compete with it. 

Take Digital Wildcatters, which redirected the cost savings it gained from outsourcing with Near to create a new position based in the US that wouldn’t have been viable without the financial breathing room provided by nearshoring. 

Misconception #7: Nearshore talent slacks off and isn’t accountable

There’s a persistent myth that remote workers tend to slack off and cannot be held accountable due to the physical distance from the headquarters.

While this may have been more of an issue 15 years ago, modern project management tools, performance metrics, and communication practices ensure accountability and engagement, regardless of location.

Frequent, structured meetings and clear key performance indicators (KPIs) help maintain visibility and accountability within remote teams. Today’s technology allows for seamless videoconferencing, real-time collaboration, and efficient task tracking that keeps everyone aligned and focused on common goals.

Misconception #8: Nearshoring is too complex and hard to manage

Some businesses mistakenly believe that nearshoring requires sponsoring and frequently flying talent to and from the US for oversight and management. Short answer—it doesn’t. 

New tools and services simplify the management of distributed teams. Digital platforms allow for efficient communication, project management, and collaborative working environments that are no less effective than traditional in-office setups.

Agencies like Near expedite the hiring process, meaning you can find and hire qualified candidates two to three times faster than in the US and still save on costs. 

Misconception #9: Nearshoring is only suitable for big companies

Small to medium-sized enterprises (SMEs) and startups often need to be agile and cost-effective to thrive and scale. Nearshoring allows them to tap into a pool of qualified talent while managing expenses effectively. 

By leveraging nearshore teams, these smaller businesses can extend their capabilities and services without substantial up-front investment in local hires or infrastructure.

In fact, nearshoring can be a strategic move for smaller businesses looking to innovate and compete in the marketplace. 

By accessing international talent and expertise, you can accelerate product development, enhance service offerings, and improve competitiveness without the same resources larger corporations have.

Misconception #10: Nearshoring hinders innovation and creativity because of the distance and different cultures

Research has shown that diversity drives innovation. Nearshoring can be a catalyst for fresh perspectives and novel ideas. 

LatAm, in particular, shares many cultural touchstones with the US, which can streamline collaboration and fuel creativity rather than create roadblocks. These cultural similarities, combined with different viewpoints and experiences, enhance the creative process rather than hinder it.

Misconception #11: Nearshore talent is only supplemental and can’t fully integrate into your team

The belief that nearshore talent can only handle routine or repetitive tasks is a major misconception. Today’s LatAm workers can take on complex and creative roles, collaborate with in-house teams on an equal footing, and contribute valuable insights. 

Far from being limited to ancillary tasks, nearshore team members can lead projects, manage teams, and participate in high-level decision-making processes.

By embracing the full potential of nearshore collaboration, companies can extend their staff and enhance their internal teams with rich, diverse skill sets.

Final Thoughts

Debunking these misconceptions about nearshoring in Latin America reveals a world of opportunity for businesses looking to scale, innovate, and thrive in today’s competitive marketplace. 

Interested in going deeper? Discover real-world insights and practical wisdom from our years of helping US companies hire LatAm talent. Equip yourself with the knowledge to make informed decisions and capitalize on the rich potential of nearshoring.