Nearshore, Farshore, Onshore, Offshore: What’s the Difference?

Many factors go into the outsourcing decision-making process. You have to weigh up affordability with quality, and work culture with convenience.

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There are time zones to consider, potential culture clashes, and the right skill sets. All of these factors can generally be distilled down into one of the four main types of outsourcing:
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• Nearshore
• Farshore
• Onshore
• Offshore
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In this guide, we’ll explore the ins and outs of each to give you an idea of where you should be looking to outsource, and how remote workers time tracking can help you manage outsourced teams no matter where they are. 

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Nearshore

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The first and one of the easiest forms of outsourcing is to hire from bordering countries. With nearshore outsourcing, the goal is to recruit from nearby pools of talent that are likely to share a lot in common with your own.

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When you hire from neighboring countries such as Mexico, if you’re based in the US, you’ll open up access to a wider range of talent, and it’ll generally be a more affordable option. 

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Plus, there’s a high probability that you’ll find native English speakers, have similar time zones, and have the option of a quick visit in case you need to check in with your outsourced team.

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Generally, while nearshore outsourcing may prove to be a good way of cutting costs, it won’t provide the same degree of savings as hiring offshore.

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Pros

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•  Similar time zones
•  More affordable than internal hiring
•  Option to visit outsourced teams
•  Similar cultural values

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Cons

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• More expensive than other outsourcing options

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Farshore

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Farshore outsourcing, which is sometimes used interchangeably with offshore outsourcing, is the act of hiring from outside your country. Whereas offshore outsourcing implies hiring from any country that isn’t your own, farshore outsourcing is specifically targeting distant countries.

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An example of farshore outsourcing would be looking to India or China if your company is headquartered in the US.

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The main upside of hiring far from US shores is drastically reducing spending. When you hire from countries with a lower cost of living, you can effectively save a lot on each hire. This is unlike nearshore outsourcing, where you’re more likely to encounter hourly rates similar to those in the US.

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You can also access a global talent pool with farshore outsourcing, filling skill gaps in your company in some of the following areas:

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• BPO
• IT services
• Customer support

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Pros

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•  Low-cost option
•  Access to a global talent pool

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Cons

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• Cultural differences such as language barriers
• Different time zones

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Onshore

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Onshore outsourcing is when you look to hire locally within your region or country. Sometimes, you’re unable to fill a vacancy in your company internally, but you still need the expertise and cultural understanding of someone local.

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In cases such as this, onshore outsourcing is an excellent option. One of the primary benefits of outsourcing work this way is knowing that there will be cultural alignment and having the option to meet and train the team in person.

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You can get everyone in your onshore team up to speed with your company values and strategic goals quickly, so they can act as an effective stopgap for a busy period or just as easily be integrated as a long-term solution.

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Pros

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•  Quick integration
•  Option to meet and train the team 
•  Shared time zones

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Cons

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• Most expensive outsourcing option

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Offshore

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While farshore outsourcing is exploring the furthest reaches of the earth for top talent, offshore outsourcing is simply hiring from other countries, no matter how near or far.

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The best case for turning to offshore outsourcing is when you have a need for specialized talent that isn’t easy to find in the typical channels. Perhaps you’re expanding internationally and you need teams of German, Italian, and French translators you can rely on.

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When you open the doors to the global talent market, you can weigh up everything from specialized skill sets to price and use the factors that apply to your outsourcing needs to make a final decision.

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Pros

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•  Access to specialized talent
•  More affordable than onshore and nearshore

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Cons

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• Cultural differences
• Hiring can take longer

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Which Type of Outsourcing is Best for Your Business?

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If you’ve decided that the right move for your company is to outsource services, it’s worth considering each type outlined in this guide to make an informed decision.

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The main factors involved in the decision-making process should be:

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• Cost
• Type of talent
• Cultural alignment
• Language
• Time zones
• Importance of in-person training or meetings

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If you factor all of this into your decision-making process, you should be able to settle on the right type of outsourcing for your business.

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One of the benefits of workforce optimization through outsourcing is cutting costs. However, while it would be easy to make a snap decision based on the most affordable or high-quality hire, taking a more holistic approach pays dividends in the long run. 

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The last thing you want to do is make a rash decision that comes back to haunt you in the form of wasted time, resources, or energy. Unproductivity in the workplace can undo any benefits of outsourcing, so the wrong fit for your business could spell disaster.

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How Employee Monitoring Supports Effective Outsourcing 

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Outsourcing can be an effective hiring solution for many reasons, yet it can also represent a significant risk if you don’t have the right systems in place for ensuring performance levels are met.

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When you outsource work, you relinquish control of quality assurance to some degree, and so productivity or performance according to your standards might dip. 

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That’s why it’s a good idea to implement software for monitoring employees like Insightful to ensure outsourcing goes without a hitch. When you use a platform to monitor employee computer activity, you can track their desktop and app usage, and build a clear picture of productivity and performance for outsourced teams.

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One of the main fears you might have entering the outsourcing process is feeling as if you won’t get your money’s worth; that hiring externally means hiring people who won’t be familiar with your company values and buy into the company culture.

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As a result, you run the risk of outsourcing important work to disengaged teams who won’t take as much care with it as in-house employees would. Work from home employee monitoring can help you counteract this and keep your outsourced team on the positive side of productivity.

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Remote computer surveillance software platform Insightful can support your outsourcing in various ways:

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• Regular screenshots: With custom interval screenshots, you can use Insightful as spying software to create accountability for your outsourced teams and check in on their work even if they’re on the other side of the world.

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• Real-time insights dashboard: Working from home monitoring benefits from Insightful’s real-time data dashboards, which you can use to identify productivity trends and establish a baseline for optimal performance.

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• Attendance tracking: On a basic level, automatic remote employee monitoring through time tracking lets you know whether your outsourced team is showing up on time and working full shifts.

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