How to start nearshoring: Step-by-step for North American talent teams

What if the answer to your organisation’s talent shortages and rising labour costs wasn’t thousands of miles away, but right next door?

North American HR and talent are increasingly asking this question as they navigate one of the most challenging labour markets in decades. 

With skills in short supply, wages rising, and pressure to scale quickly, many leaders are discovering that neither offshoring to distant countries nor fully onshoring talent offers the right balance. 

Thus, nearshoring is emerging as a practical middle ground as it allows companies to tap into skilled professionals in neighbouring countries. The best part? Companies can achieve all this while still maintaining cultural alignment, easier compliance, and faster collaboration. 

Let’s dive into why nearshoring matters now, who it’s for, and how HR and talent leaders can take their first steps towards making it work.

Why nearshoring matters now

The first challenge many organisations face is knowing where to start. Should you double down on local hiring, send more work offshore, or explore an entirely different model? With economic pressure and global workforce disruption making every decision more complex, this uncertainty is common.

Nearshoring provides a clear entry point:

• Talent shortages: Many companies struggle to fill roles. This is especially true in industries such as technology, operations, and customer support. Nearshore regions often have deep pools of skilled professionals trained in the same platforms and practices as those in North America.
• High costs: Domestic hiring remains costly, while offshore models introduce risks related to time zones, oversight, and cultural fit. Nearshoring balances cost efficiency with manageable collaboration.
• Scaling needs: These days, growth means adding capacity quickly. Nearshoring enables faster integrations thanks to closer time zones, easier travel, and more familiar regulatory frameworks.

To frame nearshoring in context:

Who this guide is for

This step-by-step guide is for:

• HR leaders who are navigating skills shortages and pressure to scale operations.
• Talent acquisition teams tasked with hiring faster while managing cost.
• Executives evaluating workforce strategies that support both growth and resilience

If your organisation is struggling to meet hiring goals domestically, weighing the risks of offshoring, or simply seeking a roadmap to explore new workforce models, this guide is for you.

Step-by-step guide to starting nearshoring

The following steps will guide you through the process of defining goals, assessing suitable roles, selecting the correct country and partner, managing compliance, and ultimately building a high-performing nearshore workforce.

Step 1: Define business goals and workforce needs

The most common mistake companies make when approaching nearshoring is jumping straight into “where” or “who to hire” without first answering the more strategic “why.”

Before evaluating countries, roles, or partners, HR and talent teams should begin by aligning nearshoring to their organisation’s overall business objectives. Start by navigating the drivers behind the initiative:

• Cost efficiency: Many companies turn to nearshoring to reduce labour and operating costs while retaining control and oversight. For example, nearshoring can achieve cost savings without the productivity trade-offs that often come with distant offshoring.
• Talent access:Access to skilled talent is the top reason global enterprises adopt nearshore and regional models, particularly for specialised roles in IT, customer success, and finance.
• Scalability and speed: Organisations looking to expand into new markets or extend customer support coverage often find that nearshoring enables faster ramp-up due to overlapping time zones and cultural alignment.
• Operational resilience: Diversifying where and how work is performed (through models like nearshoring) can mitigate risk and strengthen resilience in an unpredictable global environment.

To make these objectives tangible, talent leaders should align with executive stakeholders to answer these questions:

• What business problem are we solving with nearshoring?
• Which functions or workflows are most critical to address first?
• How will success be measured? Through cost savings, speed to hire, service coverage, or innovation capacity?

Defining these goals upfront transforms nearshoring from a tactical cost-cutting measure into a strategic workforce solution.

Step 2: Assess which roles are suitable

Not every role in your organisation should be subject to nearshoring. The key is to identify functions where proximity matters (such as when time zones overlap or when cultural alignment and communication speed add value) versus roles that can be performed effectively from anywhere in the world.

A practical framework is to categorise roles as either operational or strategic.

• Operational roles include customer support, payroll administration, and IT helpdesk. These roles often benefit most from nearshoring. These functions require responsiveness, real-time collaboration, and a strong grasp of local or regional context. For instance, having customer service agents in similar time zones reduces wait times and improves service quality.
• Strategic roles are those in senior leadership, high-level product strategy, and sensitive compliance functions. These roles, on the other hand, are best retained onshore. These positions often demand close proximity to headquarters, direct influence on corporate decision-making, and deep contextual knowledge.

To make this assessment, talent leaders should consider three key factors:

1. Collaboration intensity: Does the role require daily interaction with headquarters or cross-border teams? High collaboration roles are stronger candidates for nearshoring than for distant offshoring.
2. Customer impact: If the role directly shapes customer experience, cultural fit and time zone alignment are critical.
3. Knowledge sensitivity: Functions that rely heavily on proprietary knowledge, intellectual property, or regulatory oversight may be riskier to outsource.

Overall, your HR and talent teams can avoid the pitfalls of a blanket outsourcing strategy and instead build a nearshore workforce that complements their core operations by approaching role suitability systematically.

Step 3: Select the right nearshore country

Once you’ve defined goals and role suitability, the next question is where to nearshore. For many North American organisations, this decision can feel daunting: Latin America alone offers more than a dozen nearshore markets, each with its own strengths, risks, and cultural nuances.

To make an informed choice, HR and talent leaders should evaluate countries through four lenses:

1. Talent availability and skill specialisation: Which markets have the strongest pools in IT, finance, customer service, or other functions?
2. Cost competitiveness: How does total cost (wages, benefits, taxes, infrastructure) compare across markets?
3. Time-zone overlap and proximity: Will your nearshore teams work seamlessly with U.S. or Canadian headquarters?
4. Compliance and stability: How reliable are the country’s legal, regulatory, and political frameworks?

Here’s how some of the most common nearshore destinations stack up:

• Mexico: Proximity to the U.S. and cultural affinity make Mexico a leading choice. Its IT and engineering talent pools are strong, particularly in tech hubs like Guadalajara and Monterrey.
• Colombia: Known for its expanding technology sector and competitive wages, Colombia has become a hotspot for nearshore BPO and IT services. Also worth highlighting is its strong bilingual workforce and growing reputation for innovation.
• Costa Rica: With a highly educated workforce and a stable political environment, Costa Rica attracts companies seeking quality over the lowest cost.

The right country will depend on your priorities:

• If savings are the primary focus, Mexico and Colombia may stand out to you.
• If political stability and premium talent quality matter more, Costa Rica could be the right fit.
• If you’re scaling multiple functions across Latin America, you may even adopt a multi-country model: Diversifying risk and maximising access.

Step 4: Choose the right partner

Even after selecting a nearshore country, success depends on choosing the right partner. Your choice of partner is critical as it can help you avoid compliance risks, high turnover, or poor integration. The right partner acts as an extension of your HR and talent function, handling local complexities while you focus on strategy.

When evaluating potential vendors, consider this checklist:

1. Compliance expertise: A credible partner must understand worker classification, payroll, and employment laws in your chosen country. Misclassification is one of the most common risks in cross-border hiring.
2. Talent acquisition strength: Does the partner have proven recruiting networks and the ability to source specialised roles quickly? This is critical for scaling efficiently.
3. Scalability: A strong partner must be able to support you as needs evolve. From adding more headcount, to diversifying into new functions, to entering additional nearshore markets.
4. Cultural language alignment: Look for vendors with bilingual capacity and a track record of integrating teams with North American culture and workflows.
5. Technology and transparency: Partners should provide clear visibility into hiring pipelines, compliance processes, and performance metrics, so you’re not “flying blind.”

A practical way to approach partner selection is to treat it as a strategic procurement exercise rather than a transactional one. Beyond comparing fees, assess whether the partner can flex with your evolving workforce strategy, and whether they act as a compliance shield as well as a talent enabler.

Step 5: Address legal and compliance requirements

Even the best-designed nearshoring strategy can unravel if compliance isn’t handled correctly. Employment law, tax obligations, and data protection rules vary significantly across countries, and mistakes can expose organisations to fines, reputational damage, or even bans on operating locally.

When planning nearshore hiring, HR and talent teams must pay close attention to:

1. Worker classification: Misclassifying employees as contractors is one of the most common (and costly) compliance pitfalls. Global companies are increasingly scrutinised for contractor misuse, with penalties running into millions of dollars.
2. Tax obligations: Corporate tax exposure can arise depending on the structure of contracts and operations. Clear separation between headquarters and nearshore teams is critical to avoid creating an unintended “permanent establishment.”
3. Employment contracts: Local employment agreements must comply with labour codes, covering notice periods, benefits, holidays, and termination rights. Templates from the home country often fail local legal standards.
4. Data protection and privacy: With nearshore teams often handling sensitive data, regulations like GDPR (in the EU) or equivalent local frameworks must be respected. In fact, data sovereignty is one of the top risks in global workforce models.
5. Intellectual property (IP): Ensure contracts explicitly state ownership of work products, code, or creative output developed by nearshore employees.

One way to mitigate these risks is to work with an Employer of Record (EOR) or global workforce solutions partner, which assumes responsibility for compliance while you retain operational control.

Step 6: Build recruitment and hiring processes

Once the legal and compliance framework is in place, the focus shifts to attracting and hiring the right talent. Recruitment in nearshore markets requires more than simply translating your existing process. It demands adapting to cultural expectations, digital-first practices, and new ways of assessing it.

Here are key strategies for success:

1. Leverage digital recruitment platforms: Many nearshore markets, particularly in Latin America, rely heavily on digital job boards and social networks such as Linkedin for professional hiring. Partnering with a local recruiter or EOR providers ensures visibility in the right channels.
2. Tailor your employer brand:Employer branding is a top priority for talent leaders. Globally, presenting your company as a stable, growth-oriented employer in the nearshore region will differentiate you from competitors.
3. Structure interviews for cultural skills alignment: Combine technical assessments with behavioural interviews to evaluate both hard skills and cultural compatibility. Structured, competency-based interviewing reduces bias and helps identify candidates who can integrate quickly.
4. Evaluate cultural and communication skills: For customer-facing or collaborative roles, bilingual fluency and cross-cultural communication ability should be a core part of the selection process.
5. Create a streamlined candidate experience: Lengthy or opaque recruitment cycles drive away top talent. Shortening time-to-hire is now a critical differentiator in competitive labour markets.

Step 7: Onboarding and integration

Hiring nearshore talent is only the beginning. The real challenge lies in integrating new employees into your organisation so they feel connected, productive, and aligned with your culture. Poor onboarding often leads to disengagement and turnover, while effective onboarding creates lasting value.

Here’s what we mean by effective onboarding:

1. Standardise the onboarding process: Consistency fosters alignment. Provide nearshore employees with the same structured onboarding experience as onshore staff, including access to company values, policies, tools, and role expectations. 
2. Invest in cultural integration: Cross-cultural awareness and shared rituals contribute to team cohesion in distributed organisations. Simple initiatives, such as welcome sessions, mentorship programmes, and cultural awareness workshops, go a long way.
3. Enable early wins: Assign achievable first projects that demonstrate trust and build confidence. Celebrating these early successes helps nearshore employees feel valued and part of the bigger picture.
4. Use buddy systems and peer networks: Pairing nearshore hires with onshore colleagues accelerates relationship building, knowledge sharing, and smoother day-to-day collaboration.
5. Prioritise communication tools: Ensure nearshore employees have full access to collaboration platforms, project management tools, and internal communication channels from day one.

The ultimate goal of onboarding is not just functional readiness—but cultural belonging. Nearshore employees who feel integrated are more likely to stay engaged, collaborate effectively, and contribute to innovation. This transforms nearshoring from a short-term staffing fix into a sustainable workforce strategy.

Supporting nearshoring success

Launching a nearshore workforce is only the beginning. Long-term success depends on how effectively you integrate, collaborate, and manage performance across borders. Let’s explore the practices that ensure nearshoring delivers sustainable value.

Communication and collaboration best practices

One of the biggest challenges teams face with distributed models is ensuring that nearshore employees feel connected, not isolated. Misaligned communication often leads to project delays, misunderstandings, and disengagement. Conversely, when collaboration is seamless, nearshore teams can operate as valid extensions of North American headquarters.

Here are proven practices:

1. Leverage time-zone overlap: Schedule core meetings during overlapping hours to maximise real-time collaboration and decision-making.
2. Establish team rituals: Regular cross-border rituals (such as daily stand-ups or weekly retros) strengthen cohesion and maintain focus in distributed teams.
3. Adopt digital collaboration tools: Tools like Slack, Microsoft Teams, and Zoom bridge physical distance.
4. Promote transparency: Document processes, decisions, and project updates so both nearshore and onshore employees can access the same information.
5. Encourage cross-cultural learning: Small investments in cultural awareness training can remove barriers and build stronger interpersonal connections.

Overall, you can ensure that your nearshore teams thrive together by embedding rituals, aligning time zones, and fostering open communication and dialogue.

Tools and processes for nearshore team management

Without clear systems in place, managers risk losing control over workflows, productivity and compliance. The right mix of tools and processes ensures nearshore employees are fully integrated and managed just as effectively as onshore staff.

Here are the essentials:

1. Project management platforms provide structure, task allocation and accountability across teams.
2. Performance tracking enables transparent productivity tracking (when used thoughtfully), ensuring output is measured fairly across locations.
3. Knowledge management systems and shared repositories reduce reliance on ad hoc communication and preserve institutional knowledge.
4. Performance management frameworks serve as continuous feedback loops, facilitating quarterly reviews and clear KPIs to maintain engagement across remote and nearshore teams.
5. Beyond HR policies, integrated compliance dashboards can help ensure payroll accuracy, correct worker classification, and adherence to local labour regulations.

Performance management and continuous improvement

Balancing cost-efficiency with consistent quality requires structured performance management and a mindset of ongoing optimisation. Key practices include:

1. Setting clear KPIs and performance baselines: Define metrics that go beyond cost (such as productivity level, error rates, time-to-market, and customer satisfaction scores). This ensures that you measure nearshore teams by impact, not just output.
2. Adopting continuous feedback loops: High-performing distributed teams rely on regular reviews, coaching, and transparent feedback to maintain alignment and improve quality over time.
3. Leveraging analytics for insight: Workforce analytics provide visibility into trends in retention, engagement, and productivity.
4. Encouraging innovation at the edge: Nearshore teams often bring unique perspectives and creative solutions. Distributed teams can drive innovation when empowered with autonomy and supported by collaborative processes.
5. Iterating processes regularly: Continuous improvement requires periodically revisiting workflows, tools, and structures to refine efficiency and ensure quality scales alongside cost savings.

Turn your nearshoring plans into sustainable success

Nearshoring offers North American HR and talent leaders a powerful way to address today’s most pressing workforce challenges: talent shortages, rising labour costs, and the need for scalability.

As this step-by-step has shown, success doesn’t come from cost savings alone. It comes from defining clear goals, selecting the right country and partner, addressing compliance, and building processes that support recruitment, onboarding, and long-term performance.

You can transform nearshoring into a sustainable workforce model by deliberately moving through each stage, from initial strategy to continuous improvement. The payoff is agility, resilience, and innovation, with nearshore teams operating as valid extensions of North American headquarters.

At CXC, we’ve helped businesses worldwide navigate the complexities of nearshoring, bringing deep expertise in compliance, workforce management, and global talent solutions. 

If your team is ready to explore nearshoring or strengthen your existing programme, we can help you build the right foundation for success.

Evaluate your readiness and take the first step towards nearshoring success with CXC—contact us today.

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