The IT outsourcing industry is experiencing outstanding growth worldwide, particularly in the area of software development. To see evidence of this fact, US businesses need look no further than their own backyard.
Because of its proximity to the United States—combined with targeted industry growth—Latin America is enjoying rising prominence as a strategic IT outsourcing hub. And this matters more than you might think.
By the year 2030, the US is projected to face a shortfall of tech workers to the tune of 1.2 million. Is it any coincidence that in one recent year, the amount of foreign companies hiring from Latin America has increased by a whopping 156%?
If you have software development outsourcing needs, the time to start paying attention to what’s going on in Latin America is now. But don’t worry. We’re here to walk you through it.
In this article, we will
- Provide an overview of the Latin America (LATAM) Software Development Market as it stands right now
- Discuss the top advantages of outsourcing software development to Latin America
- Expand on some of the most important LATAM tech hubs
- Learn how ParallelStaff can quickly and effectively help you onboard top LATAM talent
The Latin America (LATAM) Software Development Market
It’s no secret that the tech industry in LATAM is thriving. And it did not become the home to upwards of one million skilled software developers by accident.
As you will see below, many countries in LATAM have not only systematically invested in their tech sectors, but they are also now reaping the rewards by staying at the forefront of cutting-edge advancements.
And by outsourcing to Latin America, we get to reap those rewards right along with them.
Mexico
A strategic combination of government initiatives, tech parks, and tech-sector investments have combined to put Mexico near the top of the list when it comes to tech markets in LATAM.
- Hundreds of thousands of skilled software developers
- Overall estimated industry value of $60 billion
- Moderate labor costs
These elements, combined with proximity to the United States and government incentives (like tax breaks) make outsourcing software development to Mexico an attractive option.
But Mexico isn’t the only tech center in Latin America worth noting.
Argentina
As a software development outsourcing destination, Argentina has a lot to offer.
- A skilled IT workforce. By most recent estimates, Argentina is home to over 114,000 skilled software engineers. Whether you are looking for web developers, data scientists, programmers, or other IT specialties, it’s likely you’ll find what you need.
- Favorable time zones. Argentina uses the UTC−03:00 time zone and currently does not observe Daylight Saving Time. This means that it does not matter whether you are in the Eastern, Central, Mountain, or Pacific Time Zone— if you outsource to Argentina, you’ll still have significant workday overlap with your remote software development partners.
- Competitive labor costs. The cost of living in Argentina is, on average, 62% lower than that of the United States. This means you can outsource your software development to Argentinean partners, pay them a living wage, and still cut costs.
Brazil
In recent years, Brazil’s software development landscape has really taken shape. If you’re looking for skilled, remote LATAM developers, look no further.
Due in part to recent rapid economic development, Brazil has quickly risen through the ranks as a global leader in emerging technologies. As one of the country’s hottest innovation hubs, São Paulo stands at the center of all this; however, Belo Horizonte, Curitiba, Florianópolis (“Floripa”), and other Brazilian cities are not far behind.
Perhaps best of all, Brazil’s software market is experiencing an annual growth rate, meaning the country is not going to run out of skilled developers any time soon.
One thing to note, however, is that Brazil does have a history of political instability that has, at times, negatively impacted the economy; and in recent years especially, the government has made moves in an effort to exert more regulations on the tech industry.
While such factors can always fluctuate over time, they are still important to consider.
As you make your software outsourcing decisions—whether you’re considering outsourcing to Mexico, Argentina, Brazil or any other Latin American country—always be sure to conduct due diligence.
Why Outsource to Latin America?
There are an abundance of reasons to consider partnering with developers in the Latin American software industry.
Reason 1: Cost Efficiency
As we’ve already hinted in the section above, the average software engineer in South America enjoys a significantly lower cost of living than their American or Canadian counterparts.
As a result, if you outsource your software development to tech talent in LATAM, you can pay a lower salary rate for equally skilled developers compared to your in-country alternatives.
In this way, you can enjoy reduced operational expenses, free up your core team to concentrate on daily operations, and still speed your product to launch!
Reason 2: Skilled Workforce
Latin America has a diverse tech talent pool, one that’s being intentionally fostered on an ongoing basis.
A surge of technological advancement in LATAM and intentional investment through government-funded programs has led to a highly skilled workforce. Every semester, new graduates complete their university studies and enter the market with the latest skills with the most cutting-edge technologies. They’re eager to gain credibility and show what they’re made of—and you get to be among the beneficiaries.
LATAM developers demonstrate ease with all necessary programming languages, maintain proficiency in technology stacks, and exhibit other standout qualities that more than qualify them to meet a diverse array of software development needs.
Reason 3: Large Talent Pool
Latin America is home to an abundance of IT professionals with diverse skill sets.
Zooming in on software developers in general is enough to give you an idea of the scope.
Software developers in LATAM by the numbers:
- 500,000 in Brazil
- 220,000 in Mexico
- 115,000 in Argentina
- 62,000 Colombia
Having access to such a broad range of specialists comes with obvious advantages.
First, no matter how good your team is, you’ll likely have skill gaps. Software outsourcing can fill in those gaps, offering you flexibility and scalability for different project requirements. After a quick onboarding process, skilled Latin American developers can provide what you need only when you need it.
Second, even if you don’t have skill gaps, you still will face seasons of high demand, during which you need extra help for a season as you complete projects. Rather than onboarding new permanent staff, you can outsource some of your development work on an as-needed basis, working with talented, remote LATAM specialists.
Reason 4: Time Zone Advantage
If working through the COVID-19 pandemic taught us anything, it’s the value and overall effectiveness of remote work. Outsourcing software development to Latin America is simply an extension of that same philosophy.
But not all remote work is built the same. The further your remote team, the greater the gap can be in your communication.
Perhaps one of the greatest advantages of outsourcing your software development to LATAM is that this allows for convenient real-time collaboration with teams in the US.
When all—or, at least, the vast majority—of the workday overlaps with that of your remote developers, you can enjoy:
- Streamlined communication. LATAM developers can actually sit in on your meetings (via screens), ask pertinent questions, and contribute in real time.
- Reduced response times. No waiting eight to twelve hours for your remote development team to wake up, start their work day, and start answering messages!
- Improved project management efficiency. Streamlined communication with reduced response times leads naturally to project management efficiency!
Reason 5: Cultural Fit
Hiring software developers from other countries will always be a tricky business, but the risks are somewhat mitigated when you partner with developers somewhat closer to home.
While cultures do vary between North American and Latin American countries, they are still expressions of Western culture. As a result, you will hold core cultural values in common with LATAM developers than you might with, say, someone from the Eastern Hemisphere.
Such shared values and work ethics allows for greater alignment.
For your offshore team, this negligible cultural gap leads to
- Better collaboration
- Shared understanding
- More seamless integration
Reason 6: English Proficiency
Yes, you’re hiring LATAM developers for their tech skills. But that doesn’t mean coding languages are the only ones that matter. For impeccable teamwork, you will need to share spoken languages as well.
But not to worry. Tech professionals in Latin America maintain high levels of English proficiency. Many Latin American countries offer English courses more than any other language to school students, building a stable foundation to bridge the language barrier.
Working with an outsourcing team that is proficient in English brings strong benefits.
- Minimal misunderstandings. The chance for misunderstandings with remote teams is already higher than if you all shared the same space. However, these barriers lower when team members are fluent in English.
- Enhanced project clarity. When working with fluent English speakers, you can rest assured that your development team understands your goals and is always on the same page.
- Smooth teamwork. When you’re not spending time and energy working hard to overcome significant language barriers, your partnership will flourish and your project will move forward smoothly and efficiently.
Reason 7: Proximity to the US.
Not all long-distance partnerships are created equally. Working with a team on the other side of the world is not the same as working with a team just a skip and a jump from the home offices.
For this reason, the advantages of geographical proximity cannot be overstated.
First, while most of your collaboration will take place remotely, by partnering with LATAM software engineering professionals, you have the option of an easy and affordable site visit.
Near proximity also lends itself to more agile collaboration (since you share time zones and cultural overlaps), and increases your overall sense of teamwork and partnership.
Reason 8: Growing Tech Ecosystem
If we haven’t already made this clear enough, the rapid growth of the tech ecosystem in Latin America and the region’s overall commitment to innovation and technology are worth noting.
In the past few decades especially, tech hubs have emerged across the region, most notably in Mexico City, Mexico; São Paulo, Brazil; Medellín, Colombia; Buenos Aires, Argentina; and Santiago, Chile.
The LATAM region is simply teeming with experts in fields such as
- Software development
- Digital innovation
- Cybersecurity
- Data Science
- UX/UI
- AI
Reason 9: Government Support
It’s no coincidence that such a wealth of tech talent has pooled in Latin America. Across the region, governments have increasingly recognized the technology sector’s importance in driving economic growth and creating jobs.
Take, for example, what’s happened in Mexico.
The Mexican government has invested significantly in the IT industry, recognizing its potential to drive economic growth and create jobs. The government has implemented several initiatives to support the IT industry, such as tax incentives, grants, and other forms of support. These investments are helping to drive innovation and growth in the IT industry, positioning Mexico as a leader in the field (NAI Mexico).
Final Thoughts
If you’re looking for outsourcing partners, the strategic advantages of partnering with Latin American developers cannot be overlooked.
Unfortunately, however, the tech industry isn’t always simple to navigate, and you may be feeling overwhelmed by the wealth of options represented in this article alone.
Choosing the right nearshore software development company in Latin America is too important a decision to leave to chance.
But don’t worry. We’re here to help.
Partner with ParallelStaff for nearshore software development. Not only do we have a demonstrated history of connecting businesses with top LATAM talent, but we also offer key services and other benefits that you won’t find anywhere else.
Our talent pool spans 15 countries and includes 3.5k+ engineers. Our care, dedication, and expertise allow us to provide customized solutions to foster innovation and yield significant cost reductions and exceptional results.
For these reasons and many more, consider ParallelStaff for their nearshoring needs.
To take your software development initiatives to the next level, just reach out. Book a call with us today!
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