Nearshoring gains traction for US talent needs
CWS 3.0 - Contingent Workforce Strategies
Nearshoring gains traction for US talent needs

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According to SIA’s 2024 Year In Review and What CW Program Managers Need to Know in 2025 webinars, finding talent outside of the US remains a hot topic. In fact, expanding recruiting efforts beyond US borders is gaining traction. Companies find themselves in an increasingly competitive business landscape where they are forced to seek innovative ways to optimize costs, expand their talent pools and still maintain high levels of productivity.
And as the research shows, nearshoring in particular has become a viable strategy for finding additional talent. Unlike years past, when offshoring to countries like India and the Philippines was popular, we find that US organizations are realizing immense value from looking at resources in neighboring countries, such as those in Latin America.
The need for innovative workforce solutions has never been more pressing. According to the US Bureau of Labor Statistics, the US had 8.8 million job openings in 2023 but only 6.3 million unemployed individuals. This means that if every single person who was available to work had a job, there would still be 2.5 million unfilled jobs. And we are also seeing the labor force participation decline further due to baby boomers retiring and members of Gen Z embracing more of a gig work philosophy.
Lastly, with wages and inflation in the US continuing to rise, many companies face difficult and often conflicting decisions regarding headcount — decisions around needing to fill roles but also needing to cut costs. Now more than ever, the case for implementing a nearshoring policy becomes crucial. Instead of cutting jobs, companies can strategically move roles to other countries, ensuring both cost efficiency and operational continuity.
A Nearshoring Strategy
SIA’s online Lexicon defines nearshoring as “a form of outsourcing arrangement performed in roughly the same time zone with less than one day’s travel to reach the nearshore destination.” For US businesses, this would mean implementing a strategy that sends work (or finds workers) in Latin American countries.
According to a report by SGF Global, Latin America comprises more than 33 countries and a workforce of 370 million. This gives companies an attractive alternative outside of hiring solely within the US. Latin America is also now particularly appealing due to supply chain disruptions in China, concerns over intellectual property protection in some foreign locations and time zone challenges in India.
The advantages for nearshoring talent became increasingly more apparent during the pandemic, when remote work was necessary and where the talent lived was less important. And Latin American countries offer many other benefits to US businesses:
Cultural fit. Most workers in Latin America are familiar with American culture. Many have gone to schools in the US, watched American television or have prior work experience with US-based clients.
English as a second language. While only 10% of Latin America’s workforce speaks English, there are specific areas — such as San José del Cabo, Guatemala City and Mexico City — where workers are often fluent.
Time-zone friendly. Latin American countries share the same time zones as the US, which helps with business continuity and ease of collaboration.
Diverse workforce. The workforce in Latin America is equally divided between men and women, ensuring diversity in hiring.
Competitive wages. The cost of labor in Latin America is significantly lower than in the US, providing cost savings.
While nearshoring offers many benefits, be aware of the challenges before choosing this strategy:
Legal regulations. Much like varied state laws within the US, each country in Latin America has different labor laws regarding holidays, benefits and contract structures.
Worker classifications. Some regions may not have a contract-based culture. Other regions do not offer W-2 relationships or independent consulting. Knowledge of how the worker arrangement is going to be structured is important for both employee and employer.
Infrastructure capabilities. Infrastructure challenges make technology connection difficult in some countries. Finding reliable internet access or having access to cell towers is simply not available in some areas of Latin America.
Nearshoring from a Business Perspective
Outside of the benefits and challenges of choosing a nearshoring strategy, deciding where to nearshore from an industry and business perspective is another influencing factor. Therefore, choosing the right country is also essential based on business needs. For example:
- Puerto Rico is known for having workers in IT, healthcare communications and software development.
- Trinidad is known for its oil and gas production and large telecommunications presence.
- Peru is centrally located in the middle of Latin America, making it a prime location for easy travel access.
- Mexico has labor laws that limit core business functions to FTE hiring, but all non-core business services can be contracted.
- El Salvador offers government-issued tax incentives for foreign businesses that hire in the country.
Read more: Nearshoring in Mexico: Jobs, talent and the road ahead
Making Nearshore Work
The benefits of time zones, ease of travel, English-speaking employees, cultural similarities and a wide variety of countries close to the US make the case for nearshoring a strong one.
“Finding talent in your backyard is not hard if you have the right partner,” Mauricio Sion, managing director of SGF Global, said in an SIA webinar. “Many global staffing partners can assist US companies with visas, compliance to Latin America labor laws, assistance in choosing the right country for business needs and even navigating culture differences.”
As the workforce continues to evolve, hiring remotely helps companies expand their talent pool and stay competitive. With the right nearshoring strategy, businesses can now tap into a whole new world of talent.