How tariffs are accelerating the shift to nearshore staffing

Fast Company

2 days ago

The potential return of tariffs with a new presidential administration is causing cost structures throughout multiple industries to experience increased pressure. Companies heavily reliant on global outsourcing or imported services might soon encounter substantial disruptions because of proposed tariffs that include a 10% universal rate on all imports and higher rates for strategic sectors, including China.
Several businesses are searching for different cost reduction strategies that will protect their profit margins while preventing them from transferring tariff expenses to customers or taking on the costs internally. Organizations are now focusing more on cost management, which drives renewed interest in operational efficiency improvements through intelligent staffing and labor strategies because staffing expenses represent the most significant controllable cost for companies.
THE HIDDEN COSTS OF GLOBAL TRADE TENSIONS
Tariffs are essentially a tax on doing business globally. If companies can't pass those costs on to customers, they hit the bottom line. And even when they can, the volatility of trade policy makes long-term planning difficult. As a result, many companies are rethinking where and how they operate—not just in terms of production, but in terms of talent.
The increasing complexity of compliance, logistics, and taxation in certain offshore locations is leading companies to ask: Is it time to bring some of our operations closer to home?
Bringing the work back home—reshoring—might seem like the obvious answer, especially for companies seeking more control and less exposure to global risks. But with U.S. labor costs rising and talent shortages in many industries, reshoring often leads to significantly higher expenses. That's why companies pursuing this path are also looking for ways to offset those increases by finding cost savings in other parts of the business, particularly in areas like staffing, where smarter, nearshore alternatives can provide both financial relief and operational strength.
In the face of rising tariffs and global uncertainty, many companies have focused on reshoring their manufacturing operations. But this comes with a price, as production becomes more expensive due to wages and, probably, some raw material components being subject to tariffs.
A strategy for this is to rethink not just the manufacturing of the business, but also go beyond manufacturing to all the departments. For example, what departments can you use nearshoring or offshoring strategies to lower costs? This way, while you increase costs in production to be safe from tariffs, you can offset this by cutting costs in other parts of the company.
Companies don't need to choose between keeping everything in-house or sending it all offshore. The most resilient strategies combine reshoring where it matters most (like physical production) with nearshoring for talent-driven operations (like customer service, marketing, IT, and finance). This hybrid model allows businesses to cut costs and reduce their exposure to trade and geopolitical risk.
Here's why a hybrid staffing model is gaining traction:
No Tariffs, Fewer Surprises: While services typically aren't tariffed like goods, working with partners in nearby countries helps avoid disruptions tied to trade policy and international regulation shifts.
Save On Your Biggest Expense: Staff is usually a company's biggest expense that can be controlled. By using a hybrid model, you can have a strategy in place to help your company save on its second biggest expense.
Aligned Work Hours: Time zone compatibility allows for real-time collaboration, reducing delays and miscommunication.
Cultural Alignment: Nearshore teams often share business norms, language fluency, and values that enhance day-to-day interactions.
Physical Proximity: Leadership teams can easily visit their nearshore counterparts—or even bring them to HQ—helping to build stronger, more cohesive working relationships.
The most forward-thinking companies aren't choosing between reshoring or outsourcing—they're combining both. Reshore what you must: manufacturing, mission-critical logistics, or functions that truly require physical presence. Nearshore what you can: service-based roles like customer support, design, IT, finance, and marketing. This hybrid approach allows businesses to stay flexible, reduce exposure to geopolitical risk, and control costs, all without compromising on quality or culture.
In a world where tariffs and trade policies are constantly shifting, nearshore staffing offers a clear path to stability, efficiency, and growth. It's not just a cost-cutting tactic—it's a smart, strategic move that allows businesses to build stronger teams, operate with more certainty, and navigate global disruptions with confidence. A smarter way forward is to combine reshoring and nearshoring—reshoring the functions that must stay close, while nearshoring roles that can be performed remotely without compromising quality or control.
As global dynamics continue to evolve, one thing is clear: Companies that rethink their staffing strategies now will be better prepared for whatever comes next.