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Tech Team Nearshore: Why Portugal is The Solution For Your Retention Problem

March 15th, 2023
CTOs and managers of a tech teams need to know how to optimize efficiency in order to stay competitive in an increasingly saturated market. As the industry continues to develop, you will need to increase your tech team capacities quickly to continuing to move the business forward. However, retaining quality employees for the long term has proven to be more challenging than ever.

One primary way tech companies hang onto their capable IT staff is through outsourcing their need to IT professionals outside of their company; however, in the USA, this can quickly become cost prohibitive. The answer? Look a little further afield than your own nation—and consider setting up a nearshore development team in a country like Portugal, where the cost of living is lower, the culture is similar, and the IT professionals are very talented.



What Is Nearshore Outsourcing?


Nearshore refers to outsourcing IT work to a neighboring country, usually located within a few hours’ time zone difference. The practice is becoming increasingly common due to the benefits it provides in terms of cost savings, talent acquisition, and (depending on the country) cultural alignment.



Why Nearshore Outsourcing Is the Solution for Your Lack of Qualified IT Professionals


The technology industry is changing at a rapid pace, and companies need to be able to adapt quickly to stay ahead of the competition. Nearshore outsourcing provides a way for businesses to keep up with the industry pace.

Nearshore outsourcing provides a cost-effective solution for companies. The cost of living in some countries can be significantly lower than in others, meaning that labor costs can also be lower. This makes it easier for businesses to keep their costs down, while still accessing the best talent.

Another reason why nearshore technologies are becoming increasingly popular is that they allow companies to tap into a global talent pool. By outsourcing IT work to other countries, businesses can access a diverse range of skills and expertise that may not be available locally. This can help to accelerate the development of new products, services and solutions.



Top Countries to Outsource Vital IT Work


There are several countries that are popular for outsourcing IT work, including India, the Philippines, and China. These countries have large populations of skilled IT workers, and labor costs are generally lower than in Western countries.

However, there are also some drawbacks to outsourcing work to these countries. Language and cultural barriers can sometimes be an issue, and time zone differences can make communication difficult. There may also be concerns around data security, intellectual property rights, and regulatory compliance. As such, it is generally best to pick a country that is a little closer to home—especially neighboring countries or those that share a time zone or working hours. As such, many American CTOs and managers find that developers in Western European nations, such as Portugal, are a good fit for nearshoring their tech teams.



Why the Portugal Tech Industry?


Portugal is a country that is rapidly becoming a popular destination for outsourcing IT work. The country has a large pool of skilled IT workers, with a strong emphasis on software development. Portugal also has a thriving startup ecosystem, with a number of successful tech startups emerging in recent years.

One of the main advantages of outsourcing IT work to Portugal is the cultural alignment with Western Europe and the United States. Portuguese workers are generally fluent in English, and have a similar work culture to their Western counterparts. This can make communication and collaboration much easier, reducing the risk of misunderstandings and delays.

Portugal also has a strong focus on education and training, with a number of universities offering courses in technology and computer science. This has helped to create a large pool of skilled IT workers, with a range of expertise in areas such as software development, cybersecurity, and data analytics.

Another advantage of outsourcing IT work to Portugal is the country's favorable business environment. Portugal is a member of the European Union, which provides a stable political and economic environment for businesses. The country also has a low cost of living compared to other Western European countries, which can make it an attractive destination for businesses looking to keep costs down. (For more reasons why Portugal is an ideal country to outsource IT work, check out these ten reasons why investing in Portugal nearshore efforts is the smart move for your business or watch the video below).


Optimize Your Retention Strategy: Why It Works


Retention of IT workers is becoming increasingly important for businesses, as the competition for talent continues to intensify. One of the key benefits of outsourcing IT work to Portugal is that it can help to optimize retention strategies, by providing a more stable work environment for workers - as long as you choose the right outsourcing partner!

The country also has a strong emphasis on work-life balance, which contributes to increase productivity, retention, and job satisfaction, by providing, for example, 22 days of paid holidays plus paid parental leaves for new fathers and mothers. 

Moreover, companies with a strong focus on retention, go even further by providing extra company benefits, such as a flexible work schedule or the possibility of doing remote work. Read more about the company benefits IT professionals value the most, here



Setting Up a Nearshore Development Team in Portugal with KWAN


Setting up a nearshore development team in Portugal can be a straightforward process, especially with the help of a recruitment or outsourcing partner. The first step is to define your requirements and identify the skills and expertise that you need from your development team.

Next, you will need to choose one of two paths. You can open a company in Portugal and recruit your own tech team, or you can hire an outsourcing company to help you take care of everything - and the only thing you’ll have to do is interview a shortlist of candidates. Consider that, this outsourcing provider should have a strong presence in Portugal, and a track record of successfully delivering high-quality IT services.

If you don’t have the knowledge or time to go for the first choice, KWAN can be your outsourcing partner! Besides assessing the needs of your project and presenting you candidates according to those needs, we will take care of all the bureaucracies, such as contracts and taxes, and can even help you find an office or coworking space in the country!




Is Investing in a Retention Strategy for Your Tech Team Worth It? 


Retention strategies are an essential aspect of talent management that organizations need to consider seriously, particularly for their tech teams. Tech talent is in high demand, and companies must have a robust plan in place to retain their skilled employees. This is crucial because the costs associated with replacing an employee can be significant. Therefore, investing in a retention strategy is worth it.

One of the primary reasons why investing in a retention strategy is worth it is because it can help reduce the costs associated with employee turnover. Replacing a skilled tech employee can be costly, as it involves expenses such as recruitment fees, training, and onboarding costs (what's the real cost of losing an employee? Find out in this article!). In some cases, it can take several months before a new employee is fully up to speed with their role, which can impact productivity and result in a loss of revenue. A well-crafted retention strategy can help prevent employee turnover, saving the company from these expenses.

Another reason why investing in a retention strategy is worth it is that it can help create a positive work environment that fosters employee satisfaction and loyalty. This can lead to higher levels of employee engagement and productivity, resulting in increased business growth and success. Additionally, a positive work environment can also improve employee morale and job satisfaction, which can contribute to a more cohesive and collaborative team culture.

Moreover, investing in a retention strategy can help companies to build a strong employer brand, which can be a significant competitive advantage in today's market. Employees are more likely to stay with an organization that has a positive reputation, both in terms of their work environment and their overall corporate culture. This can help organizations to attract and retain top talent, which can contribute to their success and growth over the long term.

In short, most business owners agree that investing in a retention strategy for your tech team is worth it. A retention strategy can help reduce the costs associated with employee turnover, create a positive work environment that fosters employee satisfaction and loyalty, and build a strong employer brand that attracts and retains top talent. By investing in their employees' satisfaction and well-being, companies can stay competitive, innovate, and grow their businesses over the long term.

With a team of coaches specialized in supporting tech professionals, our People Managers, KWAN can contribute to the success of your retention strategy, by outsourcing with us, we’ll make sure your tech team gets the support needed to stay focused and fulfilled.



Why CTOs and Managers of Tech Companies Need to Consider Portugal for Nearshore Development


Portugal is becoming an increasingly popular destination for outsourcing IT work, due to its large pool of skilled IT workers, favorable business environment, and cultural alignment with Western countries. Setting up a nearshore development team in Portugal can help businesses to optimize their retention strategies, reduce costs, and access a diverse range of skills and expertise. 

With the right outsourcing provider, outsourcing IT work to Portugal  can provide an effective edge to your company, introduce new ways to innovate, and continue to expand your business. 

Talk to us, and we’ll help you set up your nearshore development team in Portugal, taking care of all the necessary documentation and even helping you with issues like how to rent an office space. Moreover, with our team of specialized coaches, our People Managers, we’ll make sure your team stays in your project, fulfilled and evolving.

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