Nearshoring: What It Is and Why You Should Know

Key Takeaways

Nearshoring is having business operations performed by teams or individuals based in geographically close countries with similar time zones.
US companies typically save 30-70% on labor costs through nearshoring to Latin America while gaining access to specialized talent pools in high-demand fields like software development, accounting, and customer support.
Successful nearshoring requires partnering with specialized recruitment firms or platforms, establishing strong remote working practices, and providing fair compensation that balances cost savings with competitive local rates to ensure long-term retention.

You’ve probably heard the term “nearshoring” tossed around at conferences or seen it in your LinkedIn feed lately. It seems everyone’s talking about it, but what’s the real story? Is it just another buzzword, or is there something actually useful here?

Nearshoring is taking off because hiring in the US has become a nightmare. That perfect candidate either costs a fortune or gets snatched up by a competitor before you can even schedule a second interview.

Businesses, from startups to established mid-market companies, are turning to nearshoring as a practical solution that just makes sense.

What Is Nearshoring? A Simple Definition

Nearshoring is having business operations performed by teams or individuals based in geographically close countries with similar time zones.

It’s about building part of your workforce in nearby regions, where professionals work remotely alongside your US-based team. For US businesses, this typically means establishing teams in Latin American (LatAm) countries like Mexico, Argentina, Colombia, and Brazil.

Unlike traditional offshoring to distant regions like India or the Philippines, nearshoring focuses on geographic proximity, which brings significant practical benefits like real-time collaboration and cultural alignment.

It’s important to understand that nearshoring isn’t the same as outsourcing to a third-party company. With nearshoring, you’re building your own team—these professionals work directly for you, just from a different location. They become integrated team members who follow your processes and contribute to your company culture.

Here’s what it looks like in practice: A US-based fintech startup needs to build out its development team but can’t compete with the salaries being offered by tech giants. Instead of limiting their search to local candidates, they hire senior developers in Costa Rica, Colombia, or Argentina who work during US business hours, attend the same virtual meetings as US-based staff, and become fully integrated team members—all while saving the company 30–70% on salary costs.

Nearshoring vs. Offshoring vs. Onshoring: What’s the Difference?

Let’s clarify how these terms differ because the terminology can get confusing:

Nearshoring: Hiring talent in nearby countries with minimal time zone differences (for US companies, that means other North American countries or those in Central or South America)
Offshoring: In contrast to nearshoring, offshoring typically refers to hiring talent in distant countries with significant time zone differences (like India, the Philippines, or Eastern Europe)
Onshoring: Workers within your own country (e.g., remote US workers for US companies)

While onshoring might seem like the safest and easiest option, the reality is that the US is facing a labor shortage in many industries. This makes it increasingly difficult for growing businesses to compete for top talent, particularly in high-demand fields like engineering, accounting, and data science.

Why US Companies Are Turning to Nearshoring

People often assume nearshoring is just about cutting costs, but that’s only part of the story. Smart companies are embracing nearshoring as a strategic growth move—they’re hiring smarter, not just cheaper.

When you can’t find the talent you need locally or can’t afford the A-players in the US market, nearshoring lets you build high-performing teams without compromise.

Here’s what’s really driving this shift:

Access to specialized talent

Finding specialized talent in the US has become increasingly difficult, even when money isn’t the obstacle. For example, companies we work with spend months searching for senior accountants in the US with no luck, only to find perfectly qualified professionals with US GAAP experience in Argentina within weeks.

Nearshoring opens up access to a much wider talent pool. Instead of competing for scarce local talent, you can tap into markets where highly skilled professionals are more available.

Significant cost savings

US companies typically save 30–70% when nearshoring to Latin America compared to hiring US-based talent. These savings come from lower costs of living in these regions, not from compromising on quality—or short-changing your hires.

This is a genuine win-win. While you save on costs, your Latin American team members often earn more than they would make locally, creating strong motivation and loyalty.

Sure, some companies try to squeeze every last dollar of savings, but that’s shortsighted.

In our experience, the most successful nearshoring relationships are built on finding the sweet spot—paying competitive rates for Latin America while still making substantial savings compared to US salaries.

Companies that pay too little find their hires jumping ship as soon as someone comes along with a better offer. Pay fairly, and you’ll build a stable, committed team while still realizing significant cost benefits.

Real-time collaboration

Here’s where nearshoring really shines compared to traditional offshoring: your team works during your hours. LatAm countries are typically within 0-5 hours of US time zones depending on where you are and where you’re nearshoring to, which means:

No waiting 24 hours for email replies
Ability to have actual conversations and solve problems in real-time
Team members who are available for customer calls during US business hours
Simplified scheduling for meetings and collaborative work

This time zone alignment makes nearshoring feel much more like having a remote US-based team than a traditional offshore operation.

Cultural compatibility

Latin American professionals often have strong cultural alignment with US business practices. Many have previous experience working with US companies and understand American workplace norms, communication styles, and expectations.

Plus, you’ll find excellent English proficiency, especially among the top-tier professionals that nearshoring allows you to afford. This eliminates one of the biggest friction points of traditional offshoring.

The Challenges of Nearshoring (And How to Overcome Them)

No business strategy comes without challenges, and nearshoring is no exception. But here’s the thing: none of these nearshoring challenges are deal-breakers. They’re just hurdles you need to plan for.

Finding and vetting talent

Without an established presence in Latin America, it can be challenging to know where to look for top talent and how to assess candidates’ skills and experience effectively. (Quick—name the top three universities in Colombia or which LatAm companies are the equivalent of working at a FAANG company. Not so easy, right? Not to mention that their resumes often look completely different from what you’re used to seeing.)

Solution: Partner with a staffing or recruiting firm that specializes in nearshoring to Latin America. Yes, that’s what we do here at Near, so of course we’re going to recommend it—but we’ve seen firsthand how much easier the process is for companies that get expert help versus those trying to figure it out on their own. These specialized firms have established networks, understand local job markets, and can pre-vet candidates to ensure you’re only interviewing high-quality prospects.

Legal and compliance considerations

Hiring internationally involves navigating different legal systems, tax implications, and compliance requirements, which can be complex without specialized knowledge.

Solution: Use an Employer of Record (EoR) service, hire contractors rather than employees, work with an agency like Near that handles these complexities for you, or utilize global HR platforms like Deel or Oyster.

These approaches simplify the legal aspects and ensure compliance while still giving you all the benefits of working with nearshore talent. When you partner with a specialized firm or use the right platforms, you can focus on the work rather than worrying about international labor laws.

Communication and management adjustments

Even with cultural similarity and time zone alignment, remote teams require intentional communication strategies to ensure everyone stays connected and aligned—this is true whether your team is all in the US or distributed globally.

Solution: Implement clear communication protocols from day one. Use collaboration tools like Slack, Zoom, and project management platforms to keep workflows efficient. Regular video meetings help build relationships and maintain team cohesion.

It’s also important to make intentional efforts to help remote hires feel like part of the team—small things like including them in casual (virtual) conversations (maybe on a “water-cooler” Slack channel) and celebrating their accomplishments can make a big difference in engagement and retention.

Which Roles Are Best Suited for Nearshoring?

Practically any position that can be performed remotely is a candidate for nearshoring.

Here are the most common roles US companies successfully nearshore:

IT and software development

Software developers (front-end, back-end, full-stack)
QA testers and automation engineers
DevOps specialists
Data scientists and analysts

Latin American countries like Mexico and Argentina have strong tech communities with experienced developers who are familiar with the same programming languages, frameworks, and methodologies used in the US.

Finance and accounting

Accountants and bookkeepers
Financial analysts
Payroll specialists
Tax preparers

Accounting and finance roles are among the top 10 hardest to fill in the US. By nearshoring, you can find finance professionals faster while maintaining compliance with US financial standards.

Customer and technical support

Customer support representatives
Technical support specialists
Help desk analysts
Client success managers

Nearshore customer support teams in Latin America often have excellent English skills and can work during US business hours, providing seamless support to your customers. A major bonus: many can provide bilingual Spanish and English support, allowing you to serve a broader customer base without hiring separate teams.

Sales and marketing

Sales development representatives (SDRs)
Digital marketing specialists
Lead generation specialists
Content creators and social media managers

Many nearshore sales and marketing professionals have experience working with US markets and understand American consumer behavior and expectations.

Design and creative services

Graphic designers
UI/UX designers
Video editors
Content writers and copywriters

Creative professionals in Latin America often bring diverse perspectives and global design sensibilities to your projects, while working within your brand guidelines.

‍Best Practices for Successful Nearshoring

Based on our experience helping hundreds of US companies build successful nearshore teams, here are the key practices that make the biggest difference:

Start with clearly defined roles and expectations. Document exactly what you need before starting your search, including required skills, experience level, and performance expectations.
Prioritize communication skills. While technical skills are important, strong communication abilities are crucial for remote collaboration. Look for candidates who can express themselves clearly in both written and verbal formats.
Use video interviews extensively. Video calls give you a better sense of a candidate’s communication style, English proficiency, and cultural fit than phone or text-based interviews.
Implement a structured onboarding process. Create a comprehensive onboarding plan that familiarizes new team members with your systems, processes, and company culture. This investment pays significant dividends in productivity and retention.
Foster inclusion across borders. Make a conscious effort to include nearshore team members in company communications, celebrations, and decision-making processes. The more integrated they feel, the more they’ll contribute.
Provide fair compensation and growth opportunities. While cost savings are important, don’t focus solely on paying the lowest possible rates. Fair compensation and clear growth paths lead to higher retention and performance.

Final Thoughts

The domestic talent shortage isn’t going away anytime soon. Traditional hiring approaches are leaving companies understaffed, losing their competitive edge, and wasting resources on lengthy recruitment cycles.

Nearshoring offers a strategic solution by providing access to a vast talent pool of qualified professionals while maintaining the quality and communication you need to succeed. After seeing hundreds of companies transform their growth trajectory through strategic nearshoring to Latin America, we’ve found it’s often the perfect solution for US businesses facing hiring challenges.

The time zone alignment, cultural compatibility, and cost efficiency create a powerful combination that’s hard to match with any other hiring approach. Whether you’re looking to build a development team, staff accounting positions, or expand your customer support capabilities, nearshoring can help you achieve your goals faster and more efficiently.

Ready to explore how nearshoring could work for your business? Book a free consultation to discuss your needs and see how we can help you find top Latin American talent to join your team.