Why (Atlantic)Canada Is An Ideal Nearshore Outsourcing Destination For USA?

When you think about the term “outsourcing”, whether it be for software development, information technology, or customer service, the most common countries that pop up are India and the Philippines; not Canada. The primary reason for this is that the companies can hire high-quality talent at cheaper rates, reducing their overall operating expenditures, leaving more room to build their business. However, the landscape is changing as the changing cost-benefit dynamics of labor and the issues stemming from politics, are putting pressure on American companies to look elsewhere.

What is Outsourcing in Technology & What Are the Benefits of It?

Outsourcing, in general, is the process of utilizing a third-party individual or organization outside of your company to handle specific business activities. Outsourcing can be done locally or internationally and is a common business practice among companies looking to expand or grow without requiring major investment in expansion infrastructure.  Outsourcing in technology or IT outsourcing, is the process of hiring outside resources (often labor) to handle certain information technology functions. This applies to a wide range of services including software development, web development, application maintenance, data storage, customer support, technical support and telecommunications.

The benefits of outsourcing in technology include.

•  Freeing up internal resources by delegating specific business activities to a third-party. This gives in-house employees the time to focus on more pertinent tasks.

• It reduces overall cost, as labor in other countries tends to be lower. This also applies to the cost of infrastructure or generous tax systems in other countries.

• You are able to access skills that are unavailable in your local region. This can give your company an edge over your competition.

Finally, it allows businesses to accelerate the production of their core services and products. This is because you free up time that would otherwise be spent on time-consuming processes, allowing you to scale, faster due to uninterrupted workflow.

What is Nearshore Outsourcing & What Advantages It Have?

Unlike offshore outsourcing, which sees your business activities completed by those in distant countries in a bid to optimize your overall budget; nearshore outsourcing involves the process of offloading particular tasks to neighboring countries in a bid to get better control over your operational expenditures. With nearshore outsourcing, there is more significance placed on language, location, political atmosphere, and time zone differences. Advantages of nearshore outsourcing include the following.

• Time Zones. The first major advantage of nearshore outsourcing is that business hours overlap with the similar time zones. When your company is closer to the client, you can lead a more cost-effective interaction between you and your third-party partner. Why? The similar time zones erase the need for extra work hours, which produces a lower overall cost. The further away you are from your development team, the greater effect the time zone will have on your ability to communicate clearly and effectively.  
• Mobility & Proximity (easy to meet). If a project requires a personal meeting during its development cycle, the travel costs associated with a drive or flight is way less than if you were working with an offshore company. Distance between main cities or hubs are covered by airlines and trains, so traveling directly to a meeting is relatively easy and may not even require an overnight stay.
• Similarity in Culture. Working with a company that has a similar (or the same) language and culture as you is going to speed up the work being done immensely. Miscommunication due to language barriers will be almost non-existent and the communication process will be much faster. This goes hand in hand with similar cultures, as holidays and absence situations will be much better understood and can even be planned for in tandem together.
• Known Geopolitical Situation. You can avoid your project becoming derailed due to geopolitical issues such as military conscription, political unrest that leaves employees without access to basic needs, and extreme bouts of inflation in countries where currency exchange rates spiral out of control. You also avoid problems with trade embargoes that tend to restrict business access to countries until certain conditions are met.
•  Cost Effectiveness. There are major cost savings to be had with nearshore outsourcing as resources are not wasted on waiting for responses, waiting for task management to be done, or working out mishaps due to language barriers. Being able to meet up with the development team saves on major problems further down the line, and having a similar currency, ensures that the money goes a long way.

So, Why Choose Canada for Nearshore Outsourcing?

While Canada may not have the same volume of people as international countries, Canada is a leader in cutting edge technology, has political stability and similar laws as the United States, and is very similar with regards to culture and time zones.

• Diversity. Canada offers an extremely diverse landscape, with multiculturalism, immigration, and pluralism making up the cornerstone of Canada’s identity. This ethnocultural diversity facilitates creativity in the workplace, which brings together individuals with different life experiences, and provides unique outlooks and solutions to problems that arise.  A diverse workforce is imperative for inventing new products and services, meeting a large range of client demands, and helping companies expand into new markets while connecting them to a larger audience.

• Government Grants & Supports. Canada has a massive range of programs and support structures for doing international business within the country. You can find funding for exporters, associations, communities, and innovators, support for specific sectors like women in international trade or technology accelerators, funding and financing for business, exports, and investments, as well as, business growth and support for financing, mentoring, international contracts and more. You can view these government programs, here.

• Growing Tech Immigrants.  With the recent overhaul of the H1-B work visa program in the United States, less tech talent is moving to the country. Canada on the other hand, still continues to bring in tech immigrants to help augment the local talent pool. You can find back-end developers, full-stack developers, web developers, front-end developers and more, all of which offer unparalleled quality due to their education and experience. 

• Skills Based Immigration System. Canada has a skills-based immigration system in place that selects newcomers according to their adaptability, skills, education, and language proficiency. This system allows immigrants to fulfill market needs and ensure that the newcomer can adjust to life in Canada.

• Lower Infrastructure Cost. The cost of infrastructure, specifically that in the four Atlantic provinces (Newfoundland and Labrador, New Brunswick, Prince Edward Island, and Nova Scotia) is extremely low cost. This is primarily because Atlantic Canada currently lacks population growth to stimulate new economic endeavors. For companies looking for low cost infrastructure, Atlantic Canada works extremely well due to low competition and a workforce that needs jobs.

• Established Remote Work Culture. Traditional sectors in Canada are offering more remote positions and the Canadian federal government has been testing out the viability of established shared working environments.

• Happy Society (More Productivity).  Canada is currently ranked as one of the happiest countries in the world and a happy country indicates that overall quality of work-life balance is good. The happier the society, the more productivity you are going to receive, and Canada ranks well in this area.
• Growing Pool of Fresh Graduate Talents.  Canada is a world leader when it comes to generating a pool of fresh graduate talents. According to the New York Times, over half of Canada’s young adults earn an associate degree (or higher) versus only the thirty percent of other countries. With access to a larger pool of educated students, means you have access to higher-quality raw talent, individuals who have discipline and strong communication skills and high aptitude for efficient work.