It's Time to Nearshore - Letter from Authors

First of all, it's our greatest pleasure to see an increasing interest in nearshoring from business and academic communities across the world. It became apparent that Nearshore community is growing at a fast pace and more people became interested in nearshoring day by day.

We've seen a growing membership in our Nearshore Group on Linkedin as well as growing demand for information from business and academic representatives across the world, who are willing to raise the standard of management knowledge in the field and explore nearshoring benefits.

It also became clear that our active position in investigating nearshoring at both corporate and governmental levels became critical into providing a specialists means on what works and what does not, so helping businesses to make the right choice for their business engagement models.

Today, it is crucial as never, as European businesses are under the growing pressure of labor shortage from one side, and escalating discontent with traditional offshore model from another. Businesses in largest EU states such as Germany and France show signs of reluctance towards globalization of their sourcing strategies, while there is a growing labor gap with shortage of 400 000 IT specialists and engineers only in Germany.

A survey conducted for the leading German magazine revealed that a high percentage of the German businesses questioned for the poll said they had declined contracts during the first half of 2010 because they did not have enough staff to take on the extra work.

This lack of labour is developing into a dangerous brake on growth, particularly for small and medium-sized businesses and at this point it can only be reversed by companies looking for staff augmentation services abroad.

Serious immigration problems, strict labour policies and tax regulation together with the low-popularity of hi-tech specialities in countries such Germany, France, Netherlands make filling the gap for the account of internal training or immigration programs highly unrealistic.

From other side, outsourcing and, especially nearshoring proved to be a viable alternative to complement existing resources with highly-qualified yet less expensive workforce.

Being not only a cost-reduction mechanism, as with its closeness and cultural advantages nearshoring opens up perfect possibilities for various outsourcing models and approaches, from multi-sourcing to captive centers, it is also a prefect entering strategy for Western European companies to advance to economically growing Eastern European market, as the partnership with local providers not only provides access to less expensive and developed labor market and skills, but also enhance local market knowledge and expertise.


Conclusion

With this crucial aspects in mind we conducted a series of studies to discuss the current issues of the EU largest economies associated with the lack of qualified hi-tech specialists and labor restrictions.

We also want to update the perspective of Eastern European countries for providing nearshore outsourcing and staff augmentation services, and their possibilities to fill the gap in increasing labor shortage inside the European Union.

The first part of the study can be accessed here or in “Publications” section.