The Nearshoring Countries UK Firms Keep Overlooking

Everyone is chasing the same markets, and as demand rises the wage advantage narrows and the best candidates field three offers at once.

On paper the UK hiring market looks slack, ONS data shows vacancies down to around 702,000 with 2.5 unemployed people per vacancy, yet more than half of UK organisations, and up to 73 percent in specialist technical sectors, still report digital and technical skill shortages. The roles firms most need are the hardest to fill at home, and the obvious nearshore hubs are crowded. The edge now lies in the markets everyone overlooks. Two stand out: one most UK firms have never seriously considered, and one they know well but never think of for hiring.

Why nearshoring beats far-flung offshoring

First, the case for nearshoring at all. Offshoring to a distant, low-wage market can cut salary costs by around 70 percent, but with zero working-hours overlap: a question asked at 5pm in London waits until tomorrow for an answer. Nearshoring typically saves a still-substantial 40 to 60 percent while buying four to eight hours of shared working time a day, enough for real-time design reviews, sprint calls, and incident response. European firms have moved decisively: in one survey of more than 200 European companies, 55 percent said they had increased nearshoring over a twelve-month period. It fits the wider picture of a cautious but skills-short UK market, and the global labour-market data points the same way. The only question left is where, and the smart answer is not where everyone else is already crowded.

The one they have never considered: Turkey

Turkey barely features on most UK nearshoring shortlists, which is precisely why it is worth a look. The numbers are serious: its ICT market reached roughly 36.7 billion US dollars in 2024, growing about 22 percent a year since 2020, and European demand for Turkish suppliers rose 27 percent year on year in a recent quarter. It sits two to three hours ahead of London, has a large, young, technical workforce, and its EU Customs Union membership makes it a genuine bridge between Europe and beyond. For cost-conscious UK firms that still need time-zone overlap, few markets offer as much upside with as little competition for talent.

The reason it stays overlooked is that the execution is hard. Payroll must run through strict SGK registration and monthly filings, salaries are generally required to be paid in Turkish lira, and onboarding can still involve wet-signature documentation. Termination is highly employee-protective, with notice periods, severance exposure, and procedural safeguards that escalate quickly into labour-court risk if mishandled. Long-term structuring is further constrained by Turkey’s worker-leasing rules under Law No. 6715, a regulatory reality many global platforms gloss over. These details, not the headline day rate, are what separate a good Turkish hire from an expensive mistake, so how a provider handles SGK payroll and Turkish labour compliance in practice is where UK firms should concentrate their diligence.

The one hiding in plain sight: Italy

Italy is the opposite kind of overlooked. Everyone knows the country, almost no UK firm thinks of it as a place to hire. Yet it holds deep pools of engineering, design, and manufacturing talent, sits one hour ahead of the UK, and is firmly inside the EU, with none of the post-Brexit customs friction that complicates goods trade. The reason it is skipped is reputation: Italy is known as one of Europe’s most tightly regulated labour markets, and that reputation is earned. Employment runs through sector-wide collective agreements, the CCNLs; staff are typically paid across a thirteenth and often a fourteenth month; and severance accrues through the TFR system from the first day of employment. Handled blind, it is a minefield. Handled properly, using a provider that already manages CCNL and TFR obligations, it opens access to talent that competitors chasing the obvious hubs never even look at.

What it means for UK employers at home

Whichever overlooked market you pick, nearshoring does not remove the UK employer’s own obligations, it sits alongside them. A firm still runs its UK payroll and employment duties for domestic staff while adding an overseas team under different rules. Post-Brexit, a UK firm can no longer simply move a person or open a branch across the EU without navigating local employment, tax, and immigration rules country by country, and it cannot put a European hire on its UK payroll. The businesses that do this well treat it as two systems to manage cleanly, not one stretched across borders, and they decide market by market whether to build a local entity or employ through a provider, based on how many people they expect to hire and how long they plan to stay. Below roughly a dozen people in a market, a provider almost always wins on cost and speed; above it, an entity starts to pay for itself.

The offshoring era rewarded whoever found the cheapest hour, wherever it sat. The nearshoring era rewards judgement: knowing that the crowded, obvious hubs are not the only game, and that the real advantage is in the markets your competitors have written off or never noticed. Turkey and Italy are two of them, one unknown, one hidden in plain sight, and for UK SMEs willing to handle the compliance properly, that is exactly where the untapped talent is.