Nuno Godinho is the Chief Information Officer at velv.
I have over a decade of experience in nearshoring, involving extensive dialogue with clients and partners across various industries and company sizes. This has given me a deep understanding of evolving trends in nearshoring locations and industries as well as the critical aspects of selecting the right country and successfully initiating and implementing nearshoring models that are increasingly popular in Europe.
Deciding on the most suitable country is the first step, and while geographic location matters, it’s far more important to consider political and social stability both in the country you select and its neighboring regions. Time zone differences also remain a significant factor. However, perhaps most crucial is aligning work cultures and making sure you’ll be prepared to address communication challenges, as these often stand out as the primary hurdles in remote collaborations.
Let’s dive in and explore how to successfully begin implementing a nearshoring strategy.
The Best Nearshoring Location In Europe
In recent years, nearshoring has become a crucial strategy for companies seeking agility, cost efficiency and access to top-tier talent within geographical proximity. As organizations reassess their operational models, Europe has emerged as a nearshoring hot spot, with several countries standing out for their unique advantages.
Some leading nearshoring destinations in Europe include:
Portugal
With a combination of innovation, modern infrastructure and a highly skilled workforce, Portugal has positioned itself as an attractive nearshoring destination.
The country offers strong socioeconomic and political stability, scoring 96 out of 100 in the Freedom House index in 2024—on par with nations like Sweden, Norway and Finland. The surprising alignment between Portuguese work culture, particularly in engineering, and that of Nordic countries has prompted several companies from these regions to relocate their engineering teams to Portugal, such as the CTS Group and Visma.
Poland
One of the most popular nearshoring destinations in Eastern Europe, Poland offers a large talent pool in software engineering and IT, along with competitive operational costs. However, some challenges include labor market volatility and increasing competition for skilled professionals.
Romania
Recognized for its strong tech sector and multilingual workforce, Romania has been attracting nearshoring investments. The country provides a good cost-benefit ratio, though bureaucratic hurdles and infrastructure inconsistencies remain challenges for some businesses.
Hungary
With a well-educated workforce and a business-friendly environment, Hungary has been drawing companies looking for competitive nearshoring alternatives in Central Europe. However, recent political instability has presented some challenges.
How To Start Using Nearshoring Services In Europe
1. Define Your Nearshoring Goals
Before embarking on the nearshoring journey, clarity on business and strategic objectives is paramount. Organizations must assess whether the primary drivers are cost reduction, skill acquisition, market expansion or operational resilience.
Nearshoring is not a one-size-fits-all solution; rather, it should align with a company’s long-term vision and growth trajectory. Make sure you involve all of your teams in the decision and define which model would work best for you. For instance, extending your existing teams or having a full dedicated team are two different approaches, as one gives you more control than the other.
2. Choose The Ideal Nearshoring Partner
Selecting the right partner can make or break a nearshoring initiative. Beyond technical expertise, companies must evaluate cultural fit, project management methodologies and track record. A rigorous due diligence process—comprising reference checks, pilot projects and contractual transparency—can ensure a reliable and sustainable partnership.
3. Structure Your Nearshoring Model
A well-defined operational framework can streamline the transition. Companies can opt for dedicated teams, managed services or hybrid models depending on their level of control and integration requirements. Establishing key performance indicators (KPIs), workflow protocols and governance mechanisms can enhance accountability and ensure nearshoring efforts align with corporate objectives.
4. Seamlessly Integrate Nearshore Teams
Cultural and operational alignment plays a crucial role in nearshoring success. Bridging geographical gaps through clear communication strategies, agile methodologies and regular knowledge-sharing can foster a unified workforce. Implementing robust onboarding programs and collaboration tools can mitigate friction and accelerate productivity.
5. Optimize And Scale
Nearshoring is not merely a cost-saving tactic—it’s an enabler of innovation and growth. Continuous performance assessments, feedback loops and iterative improvements drive efficiency. As companies mature in their nearshoring journeys, expansion into adjacent markets or additional service lines becomes a natural progression.
Support From Your Vendor
Throughout your nearshoring implementation, understanding your partner’s ability to support you—particularly during the final three steps—is crucial. Your nearshoring partner should not only source top-tier engineers and IT teams but also provide meaningful insights into their performance. It should offer flexible arrangements to avoid restrictive contracts and assist in enhancing your internal processes across the board.
It’s essential to clearly understand your vendor’s unique value proposition, what distinguishes them and how closely their strengths align with your company’s needs.
The Future Of Nearshoring In Europe
As the nearshoring landscape continues to evolve, those who seize the opportunity today will position themselves at the forefront of global competitiveness tomorrow.
Hopefully, this guide will serve as a valuable resource as you embark on your nearshoring journey—just as it has supported many companies I’ve collaborated with over the years. By leveraging insights, best practices and real-world experiences, you can approach nearshoring with greater confidence, ensuring a smoother transition and long-term success.
As you begin this strategic shift, remember that continuous learning, adaptability and choosing the right partners are key elements that will empower your business to thrive in an evolving global landscape.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
