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Spain: The European NearShore Destination of Choice?

Typically when considering Nearshore destinations within Europe the most commonly cited countries are the CEE countries of Poland, Ukraine and Bulgaria. However, Spain is quickly becoming the destination of choice, particularly for Offshore Service Providers who want a nearshore foothold. Spain is strategically located within easy access for all the major European IT consumers.

There are currently over 80 Operative Software Factories or Centres of Excellence in Operation in Spain including Accenture, Indra and Softek. Spain has a good availability of skilled human resources and is ranked 4th globally (1st in Europe) on the CMMI index; Spain has approx. 30K ICT companies already in operation, employing over 459K workers at a competitive cost [i]and has a well-developed Infrastructure combined with political stability. Spain has experienced a long period of recession which has driven down labour cost. In fact, depending of the specialism of the IT Resource, Spain is competitive to Ukraine with the added benefit of being in the EU. To illustrate the median salary for a .Net developer in Ukraine is approx. $26K (£17K) whereas in Spain this is 25KEUR (£18K) Per Annum.[ii] Whilst India and China still remain more competitive in Pricing, recent trends show that cost is not the determining factor in choice of Outsourcing Vendor/Location. Nearshore locations which benefit from a better cultural fit, time zone and accessibility are frequently preferred.

[i] Source Invest in Spain 2011

[ii] Payscale.com March 2015

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