IT offshoring: London and Bavaria more attractive than Warsaw and Bratislava

The shortage of skilled workers in Switzerland – especially in IT – is making the option of “nearshoring”, a variant of offshoring, increasingly important for Swiss IT companies and service providers. These businesses generally select neighbouring regions with good availability of qualified IT professionals. In the ranking of the most attractive locations, London is in the lead, followed closely by south-east England and Bavaria, as shown in the ZHAW-Nearshoring-Index. «Larger urban areas like Berlin, Amsterdam and Madrid have become especially attractive to outsourcing business activities», says Benedict Zoller-Rydzek, project leader of the ZHAW study.

Smooth working processes across borders are valued more highly than cost efficiency, which is the standard advantage of outsourcing to a low-wage country. “The geographic proximity and low communication barriers in terms of language and culture all promote efficient collaboration,” says Florian Keller, co-author of the ZHAW study. “For Swiss IT companies, nearshoring is a viable option for dealing with the shortage of skilled labour in Switzerland, and it makes it possible for these companies to remain competitive in the long term, nationally and internationally,” emphasises Zoller-Rydzek. Contrary to common perception, nearshoring in eastern Europe is not particularly interesting for Swiss IT companies, mainly due to the low availability of IT specialists, but also because of the large geographic distance and cultural disparities. Keller states that the low wages in the region can’t compensate for these factors.