The pandemic and subsequent lockdowns and social distancing measures have exposed how unprepared offshore service supply chains were for so many people working from home. This is particularly true in regions where a lack of domestic internet connections and the necessary equipment to work from home are limited.
These issues along with the better living conditions of Latin America and the modern telecommunications infrastructure with superior internet coverage are creating new opportunities for nearshore operations in countries like Costa Rica, which boasts the second-highest internet coverage in Latin America.
With the recent developments to work environment infrastructures massively impacting the outsourcing market, nearshoring is proving to be the much more stable solution for IT services.
Critical Issues with Offshoring
The global health crisis has created an overwhelming amount of pressure on overcrowded countries with limited health care infrastructure. This is contributing to offshore markets in these regions struggling to maintain critical support services in areas such as IT, finance and customer service.
Working from home simply isn’t an option for many people in the countries who contribute the most to the offshoring market. A report by the European Banking Authority (EBA) stated that: “Many such offshore facilities were less prepared to address the COVID-19 operational challenges owed to a lack of opportunities for remote working or reduced availability of staff.”
Poor Domestic Internet Access Affecting Offshore Markets
The poorer living conditions of some offshoring locations simply make working at home difficult, if not impossible in many instances. Unreliable electrical and internet connections along with crowded living spaces do not create the ideal working conditions that outsourcing organizations, crucial to IT services require.
It has been noted in the past that only 3% of India’s population has internet access at home, compared to over 80% of Americans. Google’s Executive Chairman Eric Schmidt once said that India is “well behind in the web services model that the rest of the world is adopting.”
The offshoring market has thus been hit hard by such poor connections and slow internet speeds, though the solution to these issues for US-based businesses needing to outsource IT and development tasks and services is thankfully a lot closer to home.
Why Nearshoring is a Better Option
Offshoring always involved certain risks and challenges such as time zone differences, language barriers and a variety of cultural differences and differing quality standards. It was many of these inherent issues with offshoring that drove the market for nearshoring solutions over the past decade, thanks to the greatly improved infrastructures in countries like Costa Rica.
Outsourcing important services to countries closer to the United States in terms of time, language and culture has become the outsourcing option of choice for many American businesses and organizations. Costa Rica is at the forefront of nearshore outsourcing, with companies including Amazon, DHL and Walmart, as well as over 170 other multinational companies, preferring to work with a westernized culture which benefits from a stable and progressive infrastructure supplemented by a better educated and bilingual workforce.
The recent pandemic problems affecting the offshore market have only made the advantages of nearshoring even more obvious. Therefore, it’s clear to see why nearshore outsourcing is the best option after the pandemic.
If you would like to find out more about our nearshore services, such as IT staff augmentation, mobile and web development and much more, please contact our team on +1 800 974 7219 ext. 202 or by completing our contact form here.