Nearshore Staff Augmentation: A Guide For Your Business

Nearshore staff augmentation offers cultural compatibility, cost efficiency, and time zone alignment — a compelling mix that onshoring and offshoring can’t deliver.

Industry giants like Tesla and AT&T have long used it, and smaller companies are starting to, too. Among SMEs that already outsource, 21% want to nearshore their next project.

These trends are expected to add a hefty $78 billion to Latin America’s export sector beyond 2023.

Wondering if this strategy is right for you?

Let’s talk about what nearshore IT staff augmentation is, how it compares to other outsourcing methods, and what benefits it can deliver to your business. 

What Is Nearshore Outsourcing?

Before we define nearshore staff augmentation, it’s important to understand its umbrella framework: nearshore outsourcing.

Nearshore outsourcing involves contracting projects to companies in neighboring regions. This close-to-home approach sets it apart from offshoring, which means outsourcing to a different continent.

That’s why, for tech-driven businesses in the United States, nearshore outsourcing often means working with developers in neighboring Latin America — particularly Brazil, a prime destination to outsource development teams (but more on that in a minute).

In fact, according to Crunchbase, in 2021, Latin America was considered the fastest-growing venture capital market.

What Is Staff Augmentation? Understand How It Works

Nearshore staff augmentation goes beyond outsourcing. Instead of simply handing off your project to a third party, nearshore staff augmentation allows you to supplement your existing in-house team with developers from a nearshore software development company for however long you need them.

You manage these additional team members directly, but you don’t employ them — the nearshore staff augmentation firm does.

When your project concludes, they return to the firm and are reassigned to new projects with another client.

This lean and mean arrangement saves you from having to recruit short-term employees only to let them go when the project ends.

It also lets you access highly skilled professionals and maintain full creative control over your product — all without long-term commitments.

You mays also like: Staff Augmentation vs Managed Services: Which Is Best?

Who Needs Nearshore IT Staff Augmentation Services?

Nearshore staff augmentation can be a great strategy for businesses that need to bulk up their IT staff without the overhead of in-house hiring.

• Early-stage and SMEs in competitive markets often find themselves in a talent scramble with larger, more established brands. Nearshore staff augmentation lets them tap into a wider pool of skills without entering a bidding war. That’s why it’s a good rapid team scaling strategy for startups.
  
• Don’t have an internal recruitment team to onboard software engineers? Staff augmentation services give you access to vetted experts with the exact proficiencies you require, ready to jump in and add value to your project.
  
• Companies in secondary or tertiary cities may struggle to attract top tech talent due to local shortages. Nearshore staff augmentation opens doors to the global skills market. It breaks geographical barriers to connect you with the expertise you need, regardless of your location.
  
• Businesses that already outsource some of their development processes but require more control may find a perfect blend in nearshoring. Unlike outsourced software development, this strategy supports closer collaboration because the developers integrate into your internal team.
  
• Companies with budget constraints can turn to nearshore staff augmentation as a more economical alternative to onshoring. (That said, even industry giants with abundant resources routinely use it to reduce costs.)

Mitigating Risks in Nearshore Staff Augmentation

It’s natural to have reservations if you’re new to staff augmentation. Let’s dissect the risks and illustrate how a competent nearshore company can address them.

• Language barriers – Communication hiccups can slow down progress and lead to misunderstandings. Thankfully, Latin America is fluent in English. Its IT workforce is comfortable using the language and can seamlessly meld with your team.
  
• Cultural differences – Differences in communication styles and business practices can cause challenges when working across borders. Nearshoring minimizes the risk. After all, North and South America share intertwined histories and core values — including a strong work ethic, belief in individual potential, and the importance of workplace hierarchy. This common ground makes collaboration smoother.
  
• Data security concerns – Data breaches are ever-present risks, even in in-house software development. Don’t let it deter you from exploring nearshore solutions. To put your mind at ease, choose a nearshore partner with a solid security protocol and a proven track record. At Cheesecake Labs, we strictly adhere to international data protection standards and have achieved relevant certifications to keep your data safe.

What Are The Benefits of Nearshore Staff Augmentation?

Nearshore solutions offer a buffet of advantages, especially when you zoom in on the ‘nearshore’ aspect. It can enrich your team with resources and efficiencies to propel your project forward.

• Access to world-class talent – Latin America’s talent pool is brimming with skilled professionals. This is particularly true for Brazil — a rapidly growing innovation hub. Its potential has caught the attention of tech giants like Google, which is actively investing in the country.
  
  Brazil has significant investments in higher education. In fact, 81.87% of its labor force holds advanced education degrees (compared to just 71.78% in the US and 73.45% in Canada). This opens up access to exceptional talent and substantial labor cost savings without sacrificing quality.
  
• Cost advantages – While salaries in nearshore countries are higher than wages in offshore locations, they remain significantly more affordable compared to onshore rates.

For example, the average monthly pay of a software developer in Brazil is around $2,189 USD — that’s $6,000 less than the US average of $8,470 USD.

Keep in mind that you’re not just saving on wages. You’re also eliminating benefits, office maintenance, and equipment costs. These freed-up funds can be redirected towards R&D or marketing.

• Effective communication and collaboration – Due to American influences on their early education and university systems, IT professionals in Latin America are proficient in English and comfortable with Agile methodologies that have become standard in North American workflows.
  
  The similar time zones between North and Latin America also make nearshore software development smoother.
  
  Business hours and workweek structures closely mirror each other, so your augmented staff can easily participate in your daily internal rituals — something nearly impossible when you work with offshore teams on the other side of the world. As work can progress during similar hours, delays and missed deadlines are reduced, too. 

These are just a few of the many advantages of nearshoring. Check out our comprehensive blog on the Benefits of Staff Augmentation to go deeper.

Best Staff Augmentation Country In Latin America

Nearshore staff augmentation is a golden opportunity to access tech experts across Latin America. But in a vast continent dotted with tech hubs, which country should you be looking at?  

Brazil is a top contender. Thanks to recent decentralization efforts, Sao Paulo is now just one of many technological clusters in the country, with Vale do Pinhao in Curitiba, San Pedro Valley in Minas Gerais, Base 27 in Espirito Santo, and Porto Digita in Recife, also becoming key technology hubs, according to Bloomberg Línea.

Brazil hosts the most innovation hubs of any country in Latin America. Plus, it combines world-class talent, sufficient English proficiency, and a favorable time zone, making it an optimal partner for North American companies.

The University of Sao Paulo is ranked 120th globally among the best universities in 2024, with its Engineering and Technology department ranked 175th. Another noteworthy institution, the Federal University of Rio de Janeiro (UFRJ), is renowned for its exceptional information engineering programs, securing the 3rd position among Latin American universities.

In the Coursera Global Skill Index 2022, Brazil emerged as the second-ranking country in Latin America in terms of technological advancement, securing the 63rd position worldwide.

The cost savings of hiring Brazilian tech talent can be substantial, ranging from 30-50% more cost-effective than hiring in the US, depending on the role and location.

These savings can make a significant difference in your project’s budget — freeing up resources for other crucial areas.

Here’s a Quick Crash Course on Brazil:

Currency	Real (R$)
Population	203M
Time zones	GMT-2, GMT-3, GMT-4, GMT-5
Number of developers	500,000
Coface business climate rating	A4
World Bank ranking for ease of doing business	59.1 out of 100

Close-up: Colombia vs. Brazil for Nearshore Technology Outsourcing

Colombia and Brazil are often pitted against each other in the tech outsourcing arena.

Which country is the better choice? According to the information above:

• Senior software developers in Brazil and Colombia have a similar salary range.
• Both countries’ time zones are compatible with the US.
• However, Brazil’s talent market is 3x the size of Colombia, suggesting a wider range of skills and expertise available for nearshore staff augmentation.
• Brazil also demonstrates a higher English proficiency, which may facilitate smoother cooperation with international teams.

Overall, Brazil’s bigger talent pool and communication proficiency make it ideal for projects that require cutting-edge technology and seamless collaboration.

Tips for Successful Nearshore Staffing:

Like any staffing strategy, nearshore augmentation only works when there are well-defined processes and open communication channels.

Here are some essential integration and remote collaboration guidelines:

• Establish clear procedures 
• Promote collaboration
• Build connections
• Foster a strong team culture
• Maintain transparency

Want to know more? Check out our in-depth guide for IT staff augmentation management tips.

Case Study: Nearshore Staff Augmentation Services In Action

A few years ago, German car subscription startup FINN faced a critical juncture: it was ready to expand into the US market, but it was bogged down by outdated technologies. Its existing systems of spreadsheets and emails simply couldn’t keep pace.

The team tapped into Cheesecake Labs’ nearshore staff augmentation services to access high-caliber accelerated product development teams, and the decision proved transformative.

FINN has since expanded across 12 states and exponentially grown its subscriber base. It’s a great example of disruptive innovation through nearshore collaboration!

Want the full scoop? Discover FINN’s in-depth case study for all details.

Overall, nearshore staff augmentation can help you do amazing things even with a small in-house crew. It delivers flexibility, control, and access to skilled human capital while keeping costs in check.

Whether you’re racing to build a minimum viable product or scaling existing offerings, it gets you where you need to be — fast and economically. 

Ready to supercharge your team with some of the best tech talent out there? Cheesecake Labs offers innovative nearshore development solutions. Get in touch to chat about your project.