Nearshoring is a form of outsourcing. However, nearshoring and onshoring mean that business processes and responsibilities are not outsourced to far-off countries or other continents, a practice known as offshoring. Onshoring involves outsourcing within a country’s own borders (within Germany, for example), whereas nearshoring entails shifting some or all of a company’s operations to bordering or near-by countries.
Nearshoring makes it possible to cost-effectively outsource business operations that can only be performed at great expense in a company’s domestic market or are no longer feasible due to a shortage of skilled labour. At the same time, outsourcing to eastern European countries, for example, allows businesses to access a large pool of young, well-educated and motivated staff, especially in IT.
The scaling of the necessary resources is significantly easier than in the domestic market. Moreover, the agile working methods practised by nearshore employees can provide positive momentum for internal organisational structures.