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Your roadmap needs two senior engineers this quarter. Your recruiters have been searching for months. Then someone on the board asks whether you have looked at nearshoring, and you want a clear answer before the next meeting.
So, what is nearshoring? Nearshoring means building part of your engineering team in a nearby country, close enough in time zone that both sides share most of the working day. This guide explains how it works, how it compares with offshoring and onshoring, which European countries lead, and how to tell whether it fits your team. If you already know the basics, our page on nearshore software development from Poland and Portugal shows how ITDS runs it in practice.
| 0 hLisbon to London | 1 hWarsaw to London | ~20 daysaverage from search to an integrated engineer | ~1 in 5candidates pass our vetting |
What is nearshoring? A working definition
Nearshoring is extending or outsourcing software development to a country close to your own. Distance matters less in kilometres than in hours.
Here is a practical test. If your engineers and the nearshore team share most of their working day, with a time difference of about two hours or less, you are nearshoring. Beyond that point, stand-ups drift into early mornings or late evenings. Questions wait overnight, and the two groups start to work in relay instead of together.
For a company in London, Amsterdam or Berlin, that rule puts Portugal, Poland and much of Central and Eastern Europe inside the line. For a company in New York, the overlap with Europe is shorter, so it pays to plan around it. Lisbon is five hours ahead of New York, which still leaves a full shared morning on the US East Coast.
| Nearshoring is defined by the clock, not the map. When both teams share the working day, they can work as one team. |
Nearshoring vs offshoring vs onshoring
The three terms describe where your engineers sit relative to you. Each one has a place.
| Model | Where the team sits | Shared working hours | Main strength | Main trade-off |
|---|---|---|---|---|
| Onshoring | Your own country | All of them | Same language, law and culture | The smallest and most contested talent pool |
| Nearshoring | A nearby country, about 0 to 2 hours away | Most of the day | Senior engineers you can't find locally, working in your hours | Not the lowest hourly rate on the market |
| Offshoring | A distant country, often 5 or more hours away | Few or none | Low headline rates and large scale | Overnight hand-offs and more management time |
Most comparisons start with the hourly rate, and that is where many go wrong. A cheaper hour that waits overnight for an answer, or needs rework, can cost more by the end of a project. Our guide to offshore vs nearshore outsourcing works through that trade-off in more detail.
The European nearshoring map
Europe has several mature nearshoring markets. They differ in size, in language and in the kind of work they do best.
Poland
Poland is the largest engineering market in Central Europe, with deep pools of Java, .NET, data and cloud engineers. It suits companies that want to scale a team quickly or build a large hub. Warsaw runs one hour ahead of London.
Portugal
Portugal shares a time zone with London, and its engineering community is concentrated in Lisbon and Porto. English is strong across the industry, and many engineers also work in French or Spanish. According to the ITDS Portugal team, that mix of languages is often what decides the choice, especially for clients in France and the UK.
The same team is frank about the limits. Portugal is a smaller market than Poland, and competition for senior engineers is intense. As a result, very large hubs are usually easier to build in Poland, while Portugal suits focused teams where language and time zone matter most.
Romania, the Balkans and Ukraine
Romania and the Western Balkans have growing engineering communities and are worth a look for specific stacks. Ukraine still has a large, experienced engineering workforce. Many buyers, however, now weigh continuity risks carefully before they commit.
Across all of these markets, the shortage is real. Eurostat reports that more than half of EU companies that tried to hire ICT specialists in 2023 had trouble filling those roles. Nearshoring does not remove that shortage. It widens the pool you can draw from.
How nearshoring works: three engagement models
Nearshoring is a decision about location. How you engage the team is a separate choice, and it matters just as much.
Staff augmentation
You add individual senior engineers to your existing team. They join your stand-ups, use your tools and follow your technical lead. This works best when you know exactly which skills you are missing and have the leadership to direct the work. See how IT staff augmentation from Poland and Portugal works.
Dedicated development team
A complete team, often with its own lead, works only on your product over the long term. This suits a whole new capability, such as a new product line, where continuity matters. Read more about dedicated development teams.
Project outsourcing
The partner owns delivery of a defined scope. It fits well-specified work with a clear finish line. Our page on software development outsourcing covers when that model makes sense.
In Portugal, most engagements run on time and materials, and many last a year or longer. That pattern fits companies that want engineers who stay long enough to know the product deeply.
| Not sure which model fits? Tell us the role you can't fill. We will tell you how we would staff it, and from where. Send us your hardest role |
What does nearshoring cost?
Cost is usually the first question. It is rarely the right place to start.
Rates in Portugal and Central and Eastern Europe usually sit below those in the US, the UK and Western Europe, and above those in the main offshore markets. They vary widely with stack, seniority and contract type. Treat any figure you find online as a starting point and confirm current rates with a provider before you budget.
Instead of the hourly rate, look at the total cost. That includes how quickly an engineer becomes productive, how much of your senior team's time the arrangement takes, how often people leave and what it costs to replace them. An engineer who is productive within a few weeks and stays for years often costs less overall than a cheaper hire you have to replace twice.
For our clients, savings are the proof, not the pitch. The real reason to nearshore is access to senior engineers you can't hire at home fast enough.
Nearshoring risks and how to avoid them
Nearshoring goes wrong in predictable ways. Each one has a simple check.
- The wrong seniority. Ask how candidates are tested and by whom. At ITDS, roughly one in five candidates passes our technical and language vetting.
- A slow start. Agree a start date and an onboarding plan before you sign. On average, we go from starting a search to an integrated engineer in about 20 days.
- People leaving in a tight market. In smaller markets such as Portugal, competition for senior people is strong. Ask what replacement cover the contract includes.
- Data protection. Keep personal data inside the EU where you can, and check how your partner handles GDPR. This is general information, not legal advice, so involve your own counsel.
- Two teams instead of one. Treat nearshore engineers as part of your team, with the same rituals, the same tools and the same standards.
Is nearshoring right for you? Five questions
- Have you failed to fill a senior role locally in the last three months?
- Does the work need daily collaboration with your team?
- Can someone on your side lead and review the work?
- Do you need the engineers for six months or longer?
- Do your data or regulatory needs favour engineers based in the EU?
If you answered yes to three or more, nearshoring deserves a serious look. If the work is a short, fixed project with little collaboration, an offshore or project-based partner may serve you better.
Where ITDS fits in nearshoring
ITDS is a nearshore IT staffing and software engineering company with teams in Poland and Portugal and an office in New York. We are part of House of HR. We help engineering leaders in the US and Western Europe add senior engineers who work in their hours, under EU data protection rules.
You stay in charge of the product and the team. We find, vet and support the engineers. Depending on the role, they come from Poland, for scale and stack depth, or from Portugal, for UK hours and language skills.
Nearshoring FAQ
Nearshoring means working with engineers in a nearby country, close enough in time zone to share most of your working day. For European companies, that usually means countries such as Portugal and Poland, within about two hours of their own.
Nearshoring uses a nearby country with a similar time zone, so the teams work together in real time. Offshoring uses a distant country, often with lower rates, but with little overlap in the working day and more hand-offs overnight.
It depends on the role. Poland suits larger teams and broad stack coverage. Portugal suits teams that need UK time-zone alignment or engineers who also work in French or Spanish.
With ITDS, the average from starting a search to an integrated engineer is about 20 days. The exact timing depends on the seniority and the stack.
Often it is, on total cost, but rates vary by stack and seniority. Treat savings as a bonus. The main reason to nearshore is access to senior engineers you can't hire locally at speed.
Talk to us about your first nearshore teamTell us the role you have been trying to fill. On a short call, we will tell you whether we can staff it from Poland or Portugal, and how fast your new engineer could be working with your team. |