Key benefits of nearshoring to Latin America for the midmarket

Cost, talent and AI pressures are colliding

Today’s challenging economic environment is placing greater demands across operational and back-office functions, from finance and IT to HR and customer support.

According to Grant Thornton’s Q2 CFO survey.

• As optimism about the U.S. economy reached a five-year low, the emphasis on cost-cutting rose, with 87% of finance leaders making some kind of cuts — up from 72% the previous quarter.
• Only 48% of organizations are confident in their ability to meet their labor needs.
• Sixty-seven percent are increasing investment in technology and digital transformation.
• Forty-two percent expect M&A growth at their own organizations, but integration challenges (53%), talent/leadership gaps (29%) and overestimated synergies (29%) remain major barriers to value creation among those participating in M&A.

Collectively, these trends spotlight a growing disconnect between business priorities and organizations’ ability to deliver tangible outcomes.

In the midmarket, these pressures are particularly acute. While large enterprises often have the resources to build specialized capabilities and centers of excellence internally, midmarket companies are expected to achieve the same growth objectives with leaner teams and tighter budgets.

“The priorities are clear: reduce costs, modernize operations and accelerate AI,” said Jose Alvarez, Grant Thornton | Auxis Partner for IT Modernization and ITO. “In the midmarket, the challenge is accomplishing all three with lean teams. Nearshoring gives organizations the operational capacity and expertise to achieve these targets while keeping internal teams focused on strategic work.”

Latin America emerges as a capability hub

Latin America’s strengths align closely with the criteria organizations now use when selecting outsourcing locations, which include the ability to support complex work (96%), skilled talent availability (93%), cultural fit (67%) and time zone alignment (61%), according to Grant Thornton’s Q1 2026 CFO survey.

These factors can provide meaningful advantages as organizations increasingly look to outsource more judgment-intensive, time-sensitive or high-touch work. This can include customer interactions and end-to-end accounting in finance, AI enablement and cybersecurity in IT, Level 2 HR help desk support, healthcare revenue cycle management and more.

“What we're seeing is that organizations — even large enterprises — often struggle to execute more complex processes in traditional offshore models,” Sayewitz said. “It’s not because Asia lacks talent — the challenge is collaboration. As work becomes more complex and transformation-oriented, companies increasingly want resources operating in similar time zones that can function as a seamless extension of their team.”

That’s driving a trend toward hybrid delivery models, where complex work is performed nearshore while high-volume transactional processes continue to be delivered from Asia to maximize savings and outcomes, Sayewitz said. Sixty-five percent of organizations evaluating Latin America are looking to complement existing operations in Asia or Europe to diversify risk or support more complex process delivery, according to the SSON and Grant Thornton | Auxis report. 

Funding AI through nearshoring

Increasingly, organizations are also viewing nearshoring benefits as a catalyst for modernization. Cost and transformation are no longer competing priorities as pressure mounts to reduce overhead and accelerate AI initiatives simultaneously.

Midmarket companies often lack the budget, technology expertise and governance framework to rapidly execute an effective AI program. Rather than viewing outsourcing and AI as separate initiatives, webcast speakers encouraged midmarket leaders to combine them into a single business case.

In this “Operate to Transform” model, labor arbitrage and efficiencies generated through outsourcing help fund AI without a new capital investment, while the technology is embedded into operations tied to measurable business outcomes.

“Nearshoring makes an ‘Operate to Transform’ approach more powerful,” Alvarez said. “With more than 90% of AI initiatives falling short of expectations, nearshoring offers the specialized talent, governance, close collaboration and accountability needed to reduce execution risk.”

The midmarket requires a different outsourcing model