What’s the difference between Onshore, Offshore, and Nearshore?

Ana Morales
By Ana Morales
2020-02-11

You might be acquainted with the terms Onshore, Offshore and Nearshore, but let's break down each one to determine the best option for you and your business.

Hiring Software Engineers abroad is a strategic way of delegating operational needs to specialized third parties. Why? Because it helps you focus on your company’s main activities and ultimately, become valuable business partners.

Companies base this decision, mostly, on cost comparisons, distance, language or cultural barriers and experienced workforce. Each aspect depends on the type of outsourcing you decide to work with.

As you might get a clue, there are three types of outsourcing: Nearshore, Offshore, and Onshore. All of them differ in one single aspect: the distance between the main company and the external company.

Let’s get started, shall we? 

Onshore
Convenient but pricey

Onshore is the closest option to your home country because you get to work with a company located in your country. This sounds great, right? But, watch out.

Even though Onshore means a closer location, it doesn’t mean lower costs.

Yes, you and your partner will be in the same time zone and yes, there will be no language or cultural barriers. However, costs are higher compared to Nearshore and Offshore.

Offshore
Affordable, but hard to keep 

Offshore is when your partner is located on the other side of the globe. For example, if you live in the United States and your partner is in Asia or Europe, this is offshore.

Pros? It offers higher cost savings and access to highly skilled labor.

Cons? It is the hardest to maintain and your costs may end uprising due to miscommunication and expensive flights.

Nearshore
A win-win solution

Last but not least, we have Nearshore which is basically when you work with a company that’s in the same geographical region as you.

Communication is not an issue. You can find qualified candidates with English proficiency and there’s almost no major difference regarding culture and time zones barriers.

That’s why Nearshore is the in-between choice for hiring global talent. 

Aspects to consider with Onshore, Offshore, and Nearshore partners

Before you take a decision between Nearshore, Offshore and Onshore, take a look at the next 5 key aspects. Set your priorities firsts and make the best choice for your business.

#1 Costs savings

As we know, you can find lower costs with an Offshore team, but break down all the costs that will go with this option.

For example, travel costs. You will need to travel once in a while and check up on your team. This applies for both Nearshore and Offshore partners. 

If you choose to hire a partner in Asia (Offshore), plane tickets will always be more expensive than traveling to Latin America (Nearshore). 

#2 Workforce

What type of workforce are you looking for?

It doesn’t matter where you choose to hire your workforce, you will always find professionals with technical skills everywhere. However, there are countries that are more specialized in certain areas compared to others.

Choose the right team. They are gonna be handling your company’s needs.

How can you do this?

Ask for recommendations, search for their work and with whom they have worked with. Do former clients have complained about them? Think twice before making a deal with this company.

#3 Quality

Quality services and products involve both costs savings and workforce. 

If you want to be delivered with high quality work you have to analyze what it is more important to you: costs savings or experienced workforce.

Remember, when you decide to go with the best of the best in the industry, higher costs will come along. This also depends on the location.

Onshore developers will cost more than hiring Nearshore or Offshore developers. But, this doesn’t mean there are less talented developers in Offshore or Nearshore locations. You can find a great team wherever you choose to hire your team.

Do you want the best developers or lower costs? Choose wisely

#4 Location

Do you need a partner to be closer to your home country? If this a priority for you, choose either Onshore or Nearshore.

Having a partner in the same geographical region is an advantage for your communication and work delivery. Time zones can be a big issue for Offshore locations because in Asia or Europe time zones are up to 10 hours ahead, making it a bit trickier to find the right moment to discuss work projects.

On the other hand, with Nearshore or Onshore you can keep fluid, real-time communication with your partner.

#5 Language and cultural barriers

There are many different languages all around the world. That’s why you should pick a country whose workforce can speak the same language as you.

Today most jobs positions look for bilingual skills because this serves as a bridge between your business and your partner.

Another aspect to look for is cultural barriers. Do research before making your final choice because this will allow you to avoid miscommunication and other business missteps.


Now that you know what to evaluate. Think it through without a hurry, set a list of your priorities and research your potential partners.

Remember, choosing Offshore, Nearshore or Onshore is a big deal for your company. It can either make you or break you. Choose the best partner for you and build a relationship based on trust, communication, and commitment.

At Applaudo, we have over 6 years of Nearshore Software Development expertise. Our customers are in more than 15 active locations across the United States and Latin America. We got the team you need to build your projects!