Nearshore Americas

Why Don’t More U.S. Companies Take Advantage of Nearshore Outsourcing?

There is no question that Nearshore outsourcing is hot. Countries across Latin America and the Caribbean are jumping on what seems like a golden pathway to more clients, more projects and more opportunities to expand. But of course, there is no guarantee this will be a lasting phenomenon. Which brings up a very important question: Are providers and country representatives  in it for a “quick hit” or do they see a way to generate increasing value and engagement over time?

The question is important to not just individual companies but to the Nearshore community as a whole. The success and long-term viability of Nearshore outsourcing will depend in part on the industry”s ability to define the unique benefits it can deliver. And this situation is what prompted me to deliver a presentation last week at the IMT’s Global Contact Center Forum event in Mexico City.

The presentation focused on the “Six Reasons Why US Companies Don’t Do Nearshoring.” (Scroll to the end of this post to see the actual presentation.) I based the criteria for generating the six reasons from countless conversations with customers, providers, consultants and anyone who has some strong insight into this marketplace. Furthermore, I myself was a Nearshore services customer several years ago and know exactly what its like to try to learn something about a market that – at first glance – can appear fragmented and based more on specific country strengths than on regional consistency.

Now, on to the final list of reasons why US companies fail to take advantage of Nearshore services:

Perception: The US Buyer Doesn’t Know that Services are Available in Nearshore Markets

Perception:  Required Skills Sets Are Not Available

Perception:  Latin America is too Politically Unstable/ Unsafe

Perception:  Legal Protections are Not  Strong Enough

Perception: The Nearshore Pro Services Market is Too Expensive Compared to India

Perception:  Inability for Some Markets to Scale will Trigger Wage Inflation

The challenge for the Nearshoring services community and for providers themselves is to provide consistent messaging that breaks down mistaken perceptions and encourages the intake of new, fact-based knowledge that is – ideally – driven around real experiences by real customers.

Do you agree or disagree with our top six list?

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Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.


  • I agree with your list and have experienced wage increases when a large employer entered a small near-shore market I am in. I would add that near-shore providers do not know how to market services globally and they are not as (hungry) competitive as Asian and Easter European companies that just about work for free in order to get a chance to win your business.

    • Henry, great points. We're keeping a close eye on how well some of the medium-sized Latam cities will manage to meet demands – in terms of the 'hunger factor' – notice that some governments are a lot more aggressive than others in chasing business.

  • Nice! As we once talked about how americans give things for granted ignoring the fact that in latinamerica you can easily find qualified labor force at lower costs.