Software development nearshoring benefits in the EU

Nearshore software development, involving partnerships with expert teams in nearby regions, is gaining momentum.

Nearshoring provides significant cost savings, grants access to a diverse talent pool, promotes innovation, and improves communication. In this blog, I summarized my years of experience at Software Sauna and listed the most important nearshoring benefits for you. Ready? Let’s sail!

Nearshoring benefit 1: Cost efficiency

When you’re thinking about nearshoring, the first thought that comes to your mind is cost savings. Well, you aren’t the only one, and I can tell why; it is all about getting more value out of your money. I’ve seen it in numbers: according to our customers, operational expenses can be lower by as high as 53% compared to maintaining your local unit.

Savings on infrastructure and overheads

Let’s discuss how nearshoring can be beneficial in the context of your other business costs. See, at the end of the day, a business must always make a healthy margin on its product or service business; how is that done? By controlling those pesky overhead expenses.

Imagine what you could do with that freed-up cash. We’ve seen businesses pump it back into their core operations, like enhancing customer service or pushing their sales and marketing. Or even splurge on that fancy espresso machine they’ve been eyeing. You can always have a bit of good coffee!

I’ve seen firsthand that it isn’t just about the cash savings. It’s about targeting your funds to the right areas and boosting your efficiency to get your product to the market as soon as possible. You also get to work with experienced teams who already know their stuff, which cuts down on recruitment, training, and operational expenses. And with the bonus of lower labor costs, it’s a win-win situation.

Competitive development costs

Let’s take Southeastern Europe, for example. As you already know by reading this article, I work at Software Sauna, a Croatian software development company, and I’ve seen firsthand how much more cost-effective it is. The average tech salaries here are lower than in Central or North Europe, making planning your budget and improving your ROI easier.

By estimate in most cases, direct savings in hourly rate comparisons are around 30-50% when compared to Nordic consultants.

But do you know what’s the best part? You’re not sacrificing quality for cost. As the world has gone digital and international, developer skills are similar between the countries. So, you will get highly skilled developers delivering top-notch services at rates that won’t break the bank. By estimate, in most cases, direct savings in hourly rate comparisons are around 30-50% when compared to Nordic consultants.

Nearshoring benefit 2: Fast access to a skilled talent pool

Imagine having the keys to a treasure chest of skilled tech professionals on your doorstep. That’s what nearshore software development feels like. You have quick and secure access to a talent pool swarming with tech-savvy individuals.

Highly qualified developers

We’ve seen how a local talent pool can genuinely transform businesses in other countries. It’s like a goldmine of diversity and innovation where you will find just the right person for your project. And if the fit isn’t good enough, we can always pivot and try someone else.

When nearshoring is done correctly and efficiently, you will work and communicate directly with the developers. No middle-hands, no micro-management.

Working with developers in a modern software company is all about seamless communication. When nearshoring is done correctly and efficiently, you will work and communicate directly with the developers. No middle-hands, no micro-management. This results in smoother cross-border collaborations and top-tier project execution. Remember, not all European nearshore partners can offer developers who speak full professional English.

Diverse technological expertise

Nearshoring gives you immediate access to a broad selection of talents: engineers with varied cultural and educational backgrounds, resulting in innovative solutions and different perspectives. We all know the term “thinking outside the box.” Well, what box is more important than your product or company? It’s always good to get fresh air: your nearshore partner might be the source of your product’s next big idea.

Your nearshore partner might be the source of your product’s next big idea.

Nearshoring benefit 3: Risk mitigation in the EU

Risks. No one likes them, but sadly, we aren’t allowed to live without them. However, nearshoring might be your secret weapon against them. It’s all about playing safe, and the EU knows how to keep the business playgrounds smooth and steady. With everyone following the same rules, legal and operational bumps are less likely to show up and ruin your game.

Shared regulations in the EU

The digital business landscape is balancing all these complex issues, such as compliance, legal risks, and data protection. However, operating in the EU, especially if you’re considering nearshore software development, can feel more like a walk in the park. Why? The EU member states share a common regulatory framework. Think of it like a universal rulebook that everyone’s playing by.

Knowing that your nearshore partner is bound to the same rules by default makes you sleep a bit more peacefully and another bit longer.

Shared regulations put a safety net under your business. For example, you’ve probably heard about GDPR, DSA, and AI Act. They are like your own personal bodyguards for data protection across the region. Knowing that your nearshore partner is bound to the same rules by default makes you sleep a bit more peacefully and another bit longer.

HR and recruitment

If we don’t even think about the time and the money that HR and hiring require, navigating the infamous world of tech recruitment can feel like a tricky chess game. Here’s a secret – nearshoring can be your knight in shiny armor. It’s like hitting the jackpot with talent acquisition. Nearshoring means you no longer have to sweat about that tech talent gap. But there’s more.

Nearshoring benefit 4: Innovation and speed

Picture this. You’re working on a new product, but your existing team has its hands full or needs to gain know-how of new technologies. What if you could tap into the brilliant minds across Europe? That’s the power of nearshore. It brings fresh viewpoints and creative solutions to the mix. And the best part? The speed. It can help get your product out there faster than you had imagined.

Access to innovative, new views

In software development, fresh thinking is a real game-changer. At Sauna, we’ve seen how blending different backgrounds in a nearshore team can spark innovative ideas. It’s like cooking – throw in a pinch of this, a dash of that, and suddenly, you’ve got a new favorite recipe.

Nearshore teams are like your eyes and ears in the latest trends. They’re right there in the thick of it, so they know what’s hot and what’s not. It’s like having an insider’s guide to what modern businesses and consumers crave. You get a wider perspective, learn to adapt, and become more aware of the world’s market shifts.

Faster Go-to-Market (GTM) time

You know that feeling when you have a killer idea for a product, but the clock is ticking, and your in-house team is already swamped? Or are you starting from scratch and need a team? I’ve seen this scenario play out many times in my work.

Imagine having a team of brilliant minds ready to dive into your project. They are in the same or near time zone, so you can hash things out over a quick call instead of waiting for emails to cross the globe. The time saved is not money; it’s gold. It’s like having a turbo-charged engine for your project timeline.

And when you need to scale up? No problem. Nearshoring partners have access to a pool of diverse talents. Need a React or a Python expert? You got it. And the best part? Instead of waiting for months, you’re onboard in weeks.

Nearshoring benefit #5: Communication and cultural fit

We Europeans have a lot in common, right? Small things, like watching football, loving or hating the Eurovision Song Contest, dealing with the same weather, or even the shared history, make things easier to click.

Working with a team that shares your values and work style is like having your favorite music playing in the background. It sets the right mood, and things just flow better. Let’s have a few words about communication and cultural fit.

Time zone compatibility

Vision this. You are working on a software project and evaluating options for your developer. Well, imagine having your team spread out all over the globe, working in different time zones. Not very fun, is it? But when everyone’s clock ticks the same, magic comes in place.

Think how smoothly things can run with real-time collaboration. We at Software Sauna have seen projects take off like rockets because everyone can jump on a chat or a video call at the same time. It’s like having people in the same room, minus the need for coffee refills.

And here’s a sweet bonus – you get quicker feedback loops. If you’ve ever waited for feedback from someone halfway around the world, you’ll get this. With overlapping working hours, you can tweak and adjust on the go.

Cultural and linguistic proximity

When you share similar values and work ethics, working with someone is always easier. We’ve learned that teams that understand each other’s culture get more stuff done. Why? They dodge those awkward miscommunications that can mess up a project’s timeline.

Language is another biggie. How many times have you been lost in translation on a call to your offshore partner? With modern European nearshore developers, that’s less of a worry. They are fluent in professional English, which cuts down misunderstandings and speeds up decisions.

Nearshoring benefit 6: Easy scaling to both directions

Imagine working on your important, big project, and suddenly, your workload goes through the roof, or shareholders tell you to speed up the pace. Dozens of tasks, but only two hands. Scary and familiar? This is a classic situation when customers contact us. Nearshore partners are your trusty sidekick, ready to jump in when things get crazy. We’re the Robin for Batman or Samwise to Frodo!

I remember a time when one of our clients, a startup, suddenly landed a huge contract. They were freaking out about scaling up quickly. We rolled up our sleeves and doubled their team size in just two weeks. Crisis averted!

But it’s not just about handling the highs. What about when things slow down?

But it’s not just about handling the highs. What about when things slow down? That’s where the real magic happens. Your nearshore team can quickly scale back without you having to worry about layoffs or lost productivity. It’s like having a dimmer switch for your development team.

I’ve seen nearshoring business relationships that have lasted for years, weathering market ups and downs during the last few years. It’s like having a work spouse who always has your back, regardless of the economy. That’s what we aim at. That’s what we call true partnerships.