It seems like a new nearshoring/outsourcing company emerges in Latin America almost weekly, not to mention globally. This proliferation can understandably breed skepticism among decision-makers earnestly seeking to expand their operations with external talent. The overflow of information makes them hesitant to embark on due diligence, fearing they might plunge into an endless time-wasting rabbit hole and potentially make the wrong decision.
The reality is, like with anything, a significant portion of these agencies offer excellent choices for exploring global talent, but many others are merely peddling illusions. Today, we'll share insights into how many nearshoring companies operate and provide pointers on detecting potential issues early, before initiating business with them.
- Promising Thorough Screenings but Conducting Them Superficially
This is perhaps the most prevalent problem. Truth be told, Latin America is teeming with professionals—thousands are already working in software, with thousands more graduating every day. According to our studies, only 6% of this talent pool meets the standards required to successfully work for US-based companies. We know this firsthand, having interviewed over 6,000 candidates in the past two years. Thorough and proper screening takes time and, consequently, money. Many agencies opt for superficial searches using intelligence tools and send raw CVs without establishing solid connections with these individuals. This leads to wasted hours sifting through unsuitable candidates or, worse, encountering issues post-hiring that should have been caught during early screenings.
How to detect?
Ask about the agency's recruiting practices. Inquire about the number of interviews they conduct and the documentation they provide about the candidates they share. Pay attention to specific details such as their methods for screening English proficiency. Look for confidence in their process and tangible deliverables.
- Neglecting to invest in a robust Success Management structure
One of the most significant issues we identify when speaking to clients with prior nearshoring experience is weak success management practices, even when the clients don’t necessarily recognize it. Poor synergy between teams, subpar or below-expectation performance, lack of responsiveness, or punctuality are all issues that shouldn't persist in a nearshoring operation with solid processes and professional staff dedicated to success management. These professionals should be deeply involved, ingraining themselves into the client's channels to address issues promptly.
How to detect?
Inquire specifically about their success management structure. Ask about the tasks of their account managers, how they handle complaints, and their SLA (Service Level Agreement) for resolving issues. Examine their organizational structure on platforms like LinkedIn to determine if they officially employ dedicated success managers. Most nearshoring agencies are more concerned with selling than investing into a solid operation so they prioritize professional salespeople over strong success managers.
- Underpaying consultants and using fixed pricing structures
A significant advantage of remote hiring is the potential for net-positive, mutual benefit across the board. Through nearshoring, US companies can access otherwise untapped, exceptional talent pools, professionals in Latin America can aim for otherwise locally unattainable compensations, and agencies can facilitate and provide the necessary structure to bridge opportunities that wouldn't be possible otherwise. Unfortunately, many agencies neglect the latter aspect, providing only slightly competitive compensation to engineers while charging US companies premium rates. Paying fair wages may mean thinner margins or passing on clients seeking cheaper rates, but it fosters fruitful, long-term relationships between clients and consultants. Put simply, an underpaid engineer is a ticking bomb, their motivation could suddenly drop and their performance along with it, or they could leave at a moment’s notice leaving your project stranded and having to invest in replacements, among other problems.
How to detect?
Utilize online platforms like Glassdoor to research agencies and assess consultant feedback regarding benefits and fair treatment. Beware of fixed pricing structures; agencies may charge high rates while offering disparate compensation to individuals in similar roles. At Oceans, our dynamic pricing structure ensures rates align with individual expectations and true market value.
Navigating the nearshoring and outsourcing landscape can be daunting, with numerous options and potential pitfalls. By asking the right questions and prioritizing transparency, professionalism, and fair compensation, decision-makers can identify trustworthy partners. At Oceans, we are committed to providing top-tier service, with dynamic pricing, rigorous screening, and a focus on success management. With careful consideration, businesses can harness global talent to drive growth and innovation for years to come.
