Belitsoft Releases 2025 Report on Nearshore Outsourcing Software Development Trends

Enterprises across the US, Canada, and the UK hire outsourced software development teams to notably reduce costs and access the global talent pool. CIO surveys find that cost control is a prime priority for enterprises in 2025. Many address that issue by extending their outsourcing direction and pausing some in-house hires. Instead, companies opt for replacing some permanent positions with flexible, vendor-assembled staff. It enables scaling teams up or down according to the work scope and cutting fixed salary overhead. For instance, UK-based corporations extending their in-company IT teams with Eastern European outsourced nearshore engineers typically reduce labour costs by 30% versus hiring in Western European countries. Since nearshore labour harbours now provide sizable “reservoirs” of highly qualified developers, these cost savings are achieved without sacrificing quality.

Since 2004, Belitsoft has been the partner for technology innovators, whether they are mature enterprises, ambitious startups, or small businesses eager to grow. We convert our customers’ unique needs into software solutions to help them achieve their business goals.

US-based enterprises and nearshoring

Enterprise tech hiring in the US is increasing in 2025 after waves of layoffs in late 2022 and early 2023. Businesses in the US, such as banks and manufacturers, are once again starting new IT projects that centre on cloud migration, artificial intelligence, and cybersecurity.

Still, they encounter a permanent talent crunch – it is estimated that the country could lose billions in annual revenue if it cannot address this labour gap. To solve that challenge, companies are empowering their partnership with outsourced teams with competencies in AI/ML, cloud, DevOps, and full-stack web development.

Most U.S. tech directors plan to hire more new full-time tech specialists in 2025, yet many note difficulty finding the proper expertise. Nowadays, IT divisions tend to hire outsourced teams to complete projects. However, many corporations are shifting from the outdated offshoring model, which refers to large Indian teams working at night, to the nearshore model when staff is augmented in closer time zones. US-based companies consider nearshoring as a way to scale up promptly and skip the long wait for filling openings in the local market. Often, a nearshore agency can assemble candidates within weeks.

Furthermore, nearshore teams working in close time zones align well with Agile workflows (daily reviews, rapid feedback) and need less management supervision than far-off offshore employees. In high-demand domains, such as healthcare, finance, and retail, where close communication and rapid iterations are crucial, American companies are choosing nearshore engineering teams to speed up development while controlling budgets and risks. U.S. organisations have increasingly launched tech hubs or hired remote teams in Europe to capitalise on its high-quality labour reserves.

Canadian enterprises and nearshoring

Many U.S. trends are mirrored by Canadian corporations. Despite the rapid expansion of the tech talent pool in the region, demand for specialised roles continues to outstrip supply. Expectations for IT hiring in Canada reached all-time highs by late 2024 and remained extremely high into 2025. There is still a high demand for tech workers, as evidenced by the large number of Canadian businesses hiring for new tech positions (on top of backfilling openings).

The majority of Canadian decision makers report having difficulty finding qualified employees, and the talent gap is similar to the US situation. Canadian businesses are also choosing to work with outside contractors and increase their workforce in order to overcome this difficulty. Many Canadian firms, like telecoms and banks, already have long-standing outsourcing contracts with Indian IT services agencies, but in 2025, we see the shift toward more agile nearshore partnerships.

Nearshoring may be a way for Canadian tech executives to gain specific knowledge. Work overlap and cultural compliance are two crucial considerations. For jobs requiring close communication and customer-facing development, businesses prefer nearshore teams in closer time zones or partners who are already accustomed to the North American work culture. Additionally, offshore outsourcing’s cost advantage is still significant. As long as security and quality are upheld, Canadian tech leaders can save a lot of money by luring engineering teams from less expensive areas.

Businesses frequently favour hybrid teams in industries like fintech (like Toronto’s financial centre) and AI/gaming (where Canada excels). They transfer the implementation work scope to offshore/nearshore software engineering teams while keeping strategic product leaders in-house. Every day, an external engineering team handles a large portion of the coding, testing, and deployment tasks in conjunction with a carefully chosen internal team of architects, product owners, and managers. By taking advantage of provider talent, this allows companies to maintain strategic control while gaining scalability and cost efficiency.

UK-based enterprises and Eastern Europe

Nearshore augmentation in Eastern Europe is being doubled down on today by UK-based companies to keep costs stable and fill talent gaps, whether it’s for building modern fintech platforms, modernising legacy systems, or cloud reengineering projects.

Eastern Europe is poised to become the top nearshore region for UK enterprises in 2025. Nearshoring to Eastern Europe stands out as a low-risk, well-balanced approach for UK-based businesses looking to expand and draw in the necessary specialists without sacrificing quality. In 2025, British companies are increasingly selecting Eastern Europe as their nearshore hub instead of remote areas. For example, traditional outsourcing to India has lost its position because of cultural / work-style and 5+ time zone gaps.

On the other hand, Eastern European talent is instantly available to UK offices and typically has a similar work ethic and approach to problem-solving.

So Eastern Europe provides an optimal mix of world-class technical talent pool, business and cultural alignment, notably lower costs, and geographic proximity (1-2 hour time difference).

Software engineers with a solid background in computer science are available at this nearshore hub, which is ranked in the top 10 globally for developer quality and skill. English proficiency is high, and work principles resemble Western culture that supports direct communication and agile practices. In summary, all of that accelerates smoother integration.

UK-based businesses also appreciate EU-aligned legal and data protection rules (GDPR), speeding up vendor onboarding and compliance.

The common rule for all three countries is that enterprise clients want true extensions of their in-company teams and, therefore, have become stricter in choosing vendors. They impose tense procurement and security requirements on any contractor. For instance, financial businesses require IT services providers to be on approved procurement frameworks, undergo serious security audits, and align with data protection rules (like data sovereignty standards or PCI). Such companies may even favour nearshore countries for compliance considerations to keep data within certain jurisdictions. Vendors in Eastern Europe are meeting this demand by establishing local offices and certifications – to comply with UK/EU standards and offer a lower-cost alternative to large regional consultancies.

For speed, startups turn to outsourced teams

A small core team (founders, CTO, technical lead, etc.) and a large percentage of development may be contracted out to a team from a tech vendor or agency in a typical early-stage startup. This enables them to concurrently develop new features or an MVP (Minimum Viable Product) while the founders concentrate on business strategy.

Startups avoid the expense and delay of permanent hires by hiring outside developers to produce an MVP fast. Because a startup’s ability to launch in months as opposed to a year can determine whether it succeeds or fails, speed to market is essential.

Startups also expand internationally in search of highly specialised knowledge. Startups usually operate on the cutting edge, whether a healthtech organisation needs machine learning experts to create an AI diagnostic tool, a fintech firm needs blockchain programmers, or a SaaS product startup needs a niche expertise like low-level systems programming.

Tech talent is becoming more specialised in 2025; instead of generalists, companies want experts who understand cloud architecture thoroughly, can create safe AI integrations, or are passionate about DevOps automation.

It might not be feasible for a startup to hire a full-time expert in every field, but outsourcing offers a way to incorporate those specialised skills into the team as needed. For instance, a Canadian AI startup might acquire a senior AI/ML engineer from Eastern Europe to help in designing a machine learning model. They might also hire a UX designer in the United States and mobile developers in Latin America. The distributed team turns out to be highly skilled in every role despite being highly diverse.

Many nearshore developers are also flexible and enterprising, which is advantageous to startups. European engineers frequently have experience with rapidly expanding startups and can contribute a product mindset. This is in line with startup culture, which requires team members to multitask and iterate rapidly.

In general, startups in 2025 view remote or outsourced teams as an essential part of their business that allows them to accomplish more with less. They place a strong emphasis on creativity and agility; external team members are expected to offer more than just code. Culturally, this fits in nicely with proactive, enthusiastic nearshore teams (the type previously mentioned). According to numerous startup founders, bringing in outside developers who have created comparable solutions for other markets can even enhance their product by introducing novel concepts. With a distributed outsourced team, a startup can achieve great success as long as communication is maintained (typically through Slack, daily stand-ups, etc.).

What enterprises expect from outsourced team vendors

In 2025, multinational corporations are emphasising “soft” factors in contractor vetting, in addition to cost and technical proficiency. They look for partners who can “please” key stakeholders (CTOs, CIOs) and ensure that the outsourcing agreement has a favourable impact on internal decision-makers. What does it mean? A provider must not only ensure delivery but also be on the same page with the company, talking about its corporate culture and work ethic.

Proven credibility and quality focus

Enterprises tend to choose partners with a proven track record and strong portfolio in a similar domain and scale. They will check references, client reviews, and case studies thoroughly. If you have enterprise-grade processes (security standards, mature quality assurance), you will be prioritised. No corporation wants to take risks on a critical project with an unverified team.

Industry-specific expertise and skills match

Enterprises highly appreciate a close alignment with their tech stack and domain requirements. For instance, a healthcare enterprise will prioritise a vendor that understands health data management regulations, while a bank will lean toward a team seasoned in delivering fintech solutions. This significantly reduces onboarding time and risks.

Financial and operational health

Enterprises often audit a vendor’s financial stability to ensure the contractor won’t go bankrupt mid-project. They prefer mature companies that follow robust governance, carry proper insurance, and have scalable operations to maintain long-standing collaboration.

Cultural match and communication

Organisations look for partners whose work culture ensures a good fit with their own. English fluency and smooth communication are a must. Nearshore contractors often have a competitive advantage here – Eastern European teams are typically well-incorporated with Western corporate culture.

Customers prefer vendors who guarantee “in sync” collaboration because they are aware that delays may result from corporate misalignment or language barriers in an outsourced group.

Growth attitude

Stakeholders are delighted when they collaborate with teams that bring enthusiasm, energy, and proactive ideas to the project. Developers who can propose innovative solutions instead of just completing standard tasks are highly valued by enterprises. Vendors that encourage a “start-up-like” can-do culture – where professionals are curious, passionate, and creative – are always in favour (as well as at a deficit). One notable development in 2025 is the ranking of the best suppliers that can foster a culture of cooperation among their employees.

Many clients believe that such a mindset often comes from dynamic companies, including agencies in emerging tech hubs like Eastern European locations. The perfect match combines a strong reputation with a spark of passion – a partner with solid credentials and a team eager to overperform.

When a talent provider always meets KPI, shows proactive problem-solving, and makes the CIO’s company more successful without tedious supervision, the enterprise client is truly satisfied.

Flexible and scalable teams

Enterprises are seeking vendors that are able to adjust team size and fulfil new roles quickly as project needs evolve. Credible outsourced vendors can add more professionals on short notice.

Businesses appreciate partners who can swiftly modify the size and expertise of their teams as project requirements change. This adaptability is critical when priorities change or new initiatives are pushed. For instance, if a client speeds up an AI project, a good contractor should be able to assemble a seasoned ML engineer to that project without the delays, which is often a characteristic of recruiting full-time staff.

The bottom line

In 2025, both established companies and startups generally view remote or outsourced teams as an essential part of their operations that allow them to accomplish more with less. External team members are expected to contribute more than just code, and creativity and agility are highly regarded.

Culturally, this fits in nicely with proactive, enthusiastic nearshore teams (the type previously mentioned). Many startup founders claim that by introducing new ideas, hiring outside teams who have delivered similar solutions for other markets can even improve their product. With a distributed outsourced team, a startup can achieve great success as long as communication is maintained (typically through Slack, daily stand-ups, etc.).