Nearshoring: Myths meet reality

Nearshoring: Myths meet reality

13. marts 2024

By Torsten Bielefeldt Schlägelberger

In today’s rapidly digitalizing business world, Danish companies face an urgent dilemma: how to overcome the growing shortage of IT talent that threatens to slow the speed of innovation and inhibit growth?

The answer for many has been nearshoring, but the path to getting there is filled with myths and misconceptions that can scare off even the most visionary leaders. Let’s explore some of these myths together and explore what reality has to offer.

Torsten betont, dass die Teams, die sein Unternehmen in Warschau, Polen und Lwiw, Ukraine leitet, keine Randeinheiten sind, sondern integrale Wachstumsmotoren, die in die Unternehmens-DNA seiner Kunden eingewoben sind.

Myth 1: "The economic advantage has shrunk"

In many Eastern European countries, salary development has been higher than in Denmark, so it’s true, but there is still a large economic advantage. We have customers who experience savings of close to 40% compared to having a similar team in Denmark. In addition, there are competences available in Ukraine, Poland and Portugal that are very hard to find and attract in Denmark.

Myth 2: "We can't retain a team, so we should expect frequent employee turnover"

Our 10Club, which our colleagues join when they’ve been with us for 10 years, is living proof of our ability to retain talent and build strong teams. With 20% of our colleagues having been with us for over a decade, we disprove the myth of frequent turnover in the nearshore industry.

Myth 3: "It will not be possible to ensure domain knowledge is built"

Our ability to create a working environment that motivates consultants to stay with Conscensia means that you can confidently expect knowledge to be built up in the overall team. Read more about the key considerations when choosing a nearshoring partner in Conscensia COO Line Milthers article “Mastering the art of nearshoring partnerships,” where we explore the depth of these relationships.

Myth 4: "Nearshoring is only a short-term solution"

Nearshoring is not just an emergency solution; it’s a sustainable strategy that can lead to long-term partnerships and continuous growth.

Contrary to the myth of short-term collaborations, Conscensia has developed deep and integrated relationships with clients such as Kamstrup, Spar Nord and Saxo. These partnerships, where developers’ longevity is a testament to mutual satisfaction and commitment, are the foundation for trust and long-term growth.

Logos af Kamstrup, Spar Nord og Saxo Bank, som illustrerer Conscensias succesfulde samarbejdspartnere i softwareudvikling.

Myth 5: "Ukraine is unsafe"

We are providing our customers with the options to choose from several delivery hubs that has different pros/cons.

The full scale invasion of Ukraine that began two years ago has tested the strength and spirit of both the people and businesses. But despite the difficult circumstances, our Ukrainian hub has not only survived, but thrived with a 5% growth rate.

In the article “Two Years of Resilience and Growth“, which you can read here, you can get a first-hand insight into the situation in Ukraine two years after Russia’s invasion.

Myth 6: "Our company is not big enough to nearshore"

Some believe that nearshoring is only viable for large projects with extensive teams. In reality, nearshoring offers flexibility, allowing companies of all sizes to scale their teams up or down as needed.

Myth 7: "Quality suffers from outsourcing"

Nearshore and offshore are very different and the demands to utilize one or the other are very different and important to be aware of. Nearshored teams in countries like Poland and Ukraine are highly skilled and motivated. Productivity depends on team dynamics and leadership, not geography. Many experience higher productivity with nearshored teams.

Hænder formet til et hjerte malet i de polske og ukrainske flagfarver, der symboliserer enhed i softwareudvikling.

Myth 8: "Intellectual property right is at increased risk"

Through clear contracts and carefully selected, reliable partners, the protection of intellectual property right’s is no more of a risk than with local hiring.

Myth 9: "Cultural barriers are a hindrance"

The cultural and geographical proximity between Denmark and popular nearshoring destinations like Poland and Ukraine helps minimize these barriers, making collaboration smooth and efficient.

At Conscensia we onboard all parties to the cultural differences that exist. Cultural fit has been an important criteria when we chose our locations.

Myth 10: "Cross-border communication compromises projects"

While language and communication barriers may seem challenging, a shared understanding of English and the use of modern communication tools ensures a seamless exchange of ideas and feedback.

Is a nearshore team the solution for your business?

By addressing and demystifying these common myths, we open up a new world of opportunities for you to solve your Digital Realities. Our customers use this as an excellent opportunity to drive innovation and growth as opposed to an interim solution to talent shortages.

During 17 years experience and long customer partnerships we have build a proven model that can guide your company through the transformation from myth to reality and help you realize the full potential of nearshoring. In my previous article, “Denmark’s digital future: Growth or Stagnation?”, I explored how Denmark can navigate the digital era.

Interested in learning more about nearshoring?