Businesses all over the world face a lot of challenges during their growth and development, and one of their difficult moments is strongly related to deciding how much of a financial investment they are willing to put into the development of certain projects. 

When faced with this decision, most business owners find the idea of developing an in-house team dedicated to certain projects much more expensive than the company’s current situation can handle.

In most cases, the solution is simple: find somebody to do it for you at lower costs. This is how we have come to talk today about terms like nearshoring.

In the case of North American organizations, the nearshore alternative is Latin America; delivering average savings ranging from 30% to 60% compared to the US market.

If you are a US-based company here are 4 reasons why you should consider Latin American nearshoring:

  1. Time and geographic proximity

Time zone and physical proximity of Latin America to the United States provides a significant advantage over more distant locations, such as Asia. Latin America has the ability to offer real-time service, which provides employees the advantage of working during standard business hours.

Time and geographic proximity also enable a much more collaborative operating model. Communication and team interaction are made much easier; particularly when dealing with issues, exceptions and shifting priorities. This model becomes an “extension of your team,” able to communicate and work together in real-time. Travel between locations is made much easier and common under this nearshore model. This greatly enables operational cohesion, effectiveness, and team camaraderie.


  1. Cultural similarities

As with geographic proximity, the similarity in cultures enables the integration of teams between the United States and Latin America.

Latin America and the United States share very similar business cultures. Pop culture and social customs are also closely aligned, making team interaction more seamless. Working styles and communication differences across regions are much easier to navigate. Business rules, operating instructions, and even schedules are better aligned.


  1. Labor pool

One of the most often overlooked factors about the Latin America shared services market is the quality of the labor pool. Based on a recent Auxis study, A Deeper Exploration of Shared Services in Latin America, seventy percent of the survey respondents reported experiencing productivity gains of over 20% after migrating operations to the shared services center. The functional scope of centers in the region goes beyond transactional processes to include high-value activities across all functions: Finance & Accounting, IT, HR, Customer Service, Supply Chain, etc.


  1. Cost attractiveness

Latin America enjoys significantly both lower labor and operating expenses versus the United States. U.S. companies that have chosen a Latin America location for back office support have typically realized savings ranging from 30% to 60%.

The savings opportunity can be even higher depending on the city in the United States and the selected location in Latin America. For example, Colombia is usually cheaper than other countries such as either Costa Rica or Panama.

If you’re looking for a potential nearshore outsourcing partner in Latin America, check out our full range of BPO services here; from our State-Of-The-Art Delivery Center in Colombia, Linkoast.