Nearshoring for SMEs: The Nature and Benefits Outsourcing to Mexico

Scaling operations while maintaining profitability is challenging for small- to medium-sized enterprises (SMEs) due to limited resources, high operating costs, and a complex global economy.

However, one strategy has gained significant traction for addressing such challenges: outsourcing to virtual assistants in Mexico. For SMEs, nearshoring presents a viable solution to achieve scalability, cost-efficiency, and access to high-quality talent.

If you want to learn more about nearshoring for SMEs in Mexico, this article is for you. It explores the nature and role of nearshoring and details the benefits of the practice.

Challenges SMEs face in scaling operations

Scaling operations is a double-edged sword for SMEs. On the one hand, growth opens doors to larger markets and greater revenue potential. On the other hand, it exposes businesses to challenges that make achieving growth targets and goals difficult. 

Examples include the following: 

• Operational bottlenecks. As businesses grow, manual processes quickly become unsustainable. This leads to operational inefficiencies, such as inventory management issues and communication silos. Nearshoring is an effective way for SMEs to overcome such issues, which we’ll elaborate as we discuss the benefits of outsourcing to Mexico. 
• Financial constraints. SMEs often face budget constraints, hindering their ability to invest in key growth areas. Hiring talent, implementing essential technologies, and expanding operations require substantial capital. Securing loans become problematic due to perceived higher risk.
• Talent crunch. According to Korn Ferry, over 85 million jobs can remain unfilled by 2030 due to labor shortages. For SMEs, this makes competition for qualified talent fiercer, especially for specialized roles. Geographic limitations further complicate the search, while high employee turnover rates disrupt workflows and recruitment efforts. 
• Goliath effect. Competing against larger, more established companies presents significant challenges. SMEs often face pressure to lower prices to remain competitive, while market saturation makes it difficult to gain traction in new markets. Rapid technological advancements further increase the pressure on SMEs. 

How nearshoring supports sustainable growth for SMEs

Nearshoring is a practical solution to help SMEs power through the common challenges they face. But what is nearshoring? Nearshoring is a type of business process outsourcing (BPO) that involves delegating tasks to service providers in a nearby country.  

The top nearshoring choice for SMEs: Mexico?

You may wonder, Why outsource to Latin America, particularly Mexico? 

The country offers unique advantages that make it an ideal partner for businesses seeking to optimize operations and fuel growth. According to Statista, the BPO industry in Mexico could grow by $5.82 billion in 2025 and reach $6.84 billion by 2029. This underscores the country’s popularity across industries. 

Why is Mexico a good place to outsource?  

1. Saving talent costs without compromising quality

Labor costs in Mexico are significantly lower compared to the U.S. and Canada. For instance, a customer representative from North America receives a monthly salary of almost $5,000. Meanwhile, a Mexican agent receives around $3,650 per month. 

Despite the significant difference in wages, nearshoring for SMEs in Mexico offers a highly skilled workforce. From software developers to customer service representatives, the country’s workforce is equipped with expertise across various industries.  

In fact, the International Trade Agreement saw a 9.4% growth in Mexico’s IT industry in 2022. Statista reports in 2022 that the country boasted a talent pool of 225,000 software developers. Additionally, Coursera’s global skill proficiency ranking places Mexico at 26th out of 100 countries. 

SMEs can reduce labor expenses while maintaining high standards of service and product quality. 

2. Proximity to the U.S. and Canada

Offshoring often involves working with teams from diverse backgrounds and cultures, increasing the risk of misinterpretations. Additionally, maintaining quality control can be challenging in offshore outsourcing scenarios due to geographical distance and limited in-person oversight. 

When choosing between nearshore vs. offshore outsourcing, SMEs in North American can find Mexico’s geographic proximity a game changer. Short travel distances enable in-person meetings and site visits, strengthening partnerships. Moreover, overlapping time zones promote real-time communication and eliminate delays associated with offshore outsourcing.  

These advantages result in: 

• Faster project turnaround times. Streamlined communication and collaboration speeds up project execution. This is crucial for activities that require quick iterations, such as software development, customer support, and product design.
• Accelerated time to market. Faster project completion translates to quicker market entry of new products and services. SMEs can establish a strong market presence and capture a significant share of customers before competitors arrive.
• Improved project management and control. Proximity allows for more frequent on-site visits and project oversight. This enables greater control over nearshoring operations for SMEs partnering with Mexican providers.

3. Robust infrastructure and trade agreements

Mexico boasts a well-developed infrastructure, including efficient transportation networks, advanced telecommunications, and a reliable energy supply. They support efficient business operations and smooth flow of goods and services. 

Furthermore, the United States-Mexico-Canada Agreement (USMCA) facilitates seamless cross-border trade. Replacing the North American Free Trade Agreement (NAFTA), it provides significant benefits for businesses operating in North America, including: 

• Reduced trade barriers. Lower tariffs and simplified customs procedures improve the flow of goods and services across borders. This is one of the main factors that contribute to the success of Mexico’s BPO sector. 
• Increased market access. The USMCA broadens market access for Mexican goods and services in the U.S. Canada, creating new opportunities for SMEs. 
• Stronger intellectual property protection. The agreement further protects intellectual property rights, encourages innovation, and promotes SME interests. 
• Improved labor standards. The USMCA includes provisions to enhance working conditions and implement responsible business practices. 

4. Cultural compatibility

Mexico’s cultural and linguistic similarities with North America enhance collaboration. Shared business practices and communication styles strengthen relationships. This streamlines partnerships between nearshoring teams and SMEs despite small differences between Mexican and U.S. cultures. 

Here are some areas of compatibility to note: 

• Work ethic. Both cultures generally value hard work, dedication, and a strong sense of responsibility. Mexican workers are known for their strong work ethic and commitment to meeting deadlines.
• Customer focus. Both U.S. and Mexican businesses prioritize customer satisfaction. This shared focus on customer service ensures that nearshoring teams in Mexico can understand and meet the needs of U.S. clients.
• Professionalism and punctuality. Both cultures value professionalism, punctuality in the workplace, and commitment to meeting deadlines.
• Communication styles. Although communication styles differ, these countries practice direct and open communication.

5. Flexibility in scaling operations

Traditional in-house hiring requires significant investment in recruitment, training, and infrastructure. Nearshoring lets your SME quickly adjust its Mexican BPO partner’s service levels to meet your needs. 

Whether you need additional staff or specific tools to meet demands, outsourcing providers can deliver resources at your request. This lets you capitalize on market opportunities, handle surges, and fulfill larger orders without hiring and training costs. 

Conversely, during periods of low demand, SMEs can scale down their nearshoring operations by adjusting service levels with their partners. This process prevents overstaffing, reduces costs, and uses resources efficiently. 

Flexibility is valuable for SMEs operating in dynamic markets, where demand can fluctuate. By leveraging the scalability of nearshoring, SMEs can adapt quickly to changing market conditions, remain competitive, and maximize their profitability.

What tasks do SMEs commonly outsource to Mexico?

Nearshoring for SMEs in Mexico encompasses a wide range of services tailored to meet your needs. By strategically outsourcing non-core functions to Mexico, businesses can enhance their efficiency, reduce costs, and focus on core competencies.  

Some of the most outsourced services are: 

• IT services (e.g., software development, IT support and maintenance, data analytics, and business intelligence) 
• Customer service and support (e.g., 24/7 customer service, customer experience management, technical support, and CRM support) 
• Back-office functions (e.g., accounting and finance, human resources , and data entry and management) 
• Marketing sales and support (e.g., lead generation, sales prospecting, content creation, marketing, and sales administration) 
• Legal compliance (e.g., legal research, contract drafting, and compliance monitoring) 

The bottom line

In a globalized economy, proximity and collaboration matter more than ever. With its unique advantages, Mexico extends many opportunities for SMEs ready to embrace nearshoring and thrive in a dynamic market.  

By taking the leap, your business can achieve scalability, cost savings, efficiency, and sustained growth for years to come. If you want to learn more about nearshoring for SMEs in Mexico, let’s connect!