As the talent gap across the world widens and escalates owing significantly to the profound impact of the Great Attrition, pandemic, and sansdemic, organizations across industries are grappling and are distraught looking for skilled tech resources and software development teams, to pursue their business goals. And most have realized that the recourse of software development outsourcing suits them better. But the questions and possibilities of where, and how continue to perturb many.
Today, as organizations have begun to embrace a shift to remote or hybrid work models, a large number of US companies are compelled to reduce dependency on outsourcing core business processes to countries halfway across the world and are looking at opportunities closer to home, to decrease time differences along with cultural and language barriers. The significant and attractive reason for businesses to consider nearshore outsourcing is due to its cost-effectiveness. A recent survey revealed that almost 89% of IT businesses considered nearshore outsourcing to cut costs, and hence, it is no surprise that industry predictions estimate the global outsourcing market to snowball by $40.16 billion in the next three years.
A key outsourcing trend that has emerged in the face of the pandemic has been the rise of nearshoring to Latin America. As businesses adopt decentralized ways of working and expand overseas to take advantage of the unique talent and cost advantages each country has to offer, Latin America is proving to offer a wealth of strategic opportunities to enterprises looking for the right destination to outsource, mainly due to its close proximity to the US, growing tech talent pool, cost-effectiveness, and cultural affinity. Thus, with the ongoing acute global tech talent crunch, especially in the U.S., Latin America is well-positioned to collaborate with tech firms and isn’t showing signs of slowing down.
Nearshoring to LATAM- A Strategy to Overcome Talent Shortage
Nearshoring to Latin America is proving to be the perfect talent acquisition, and business strategy for organizations in the US that have been heavily crippled due to the IT talent shortage, ensuring flexibility in times of digital disruption. This is because Latin American nations like Brazil, teeming with top-notch, and skilled developers, data scientists, and programmers are emerging as one of the most reliable places to hire high-end IT resources, and are experiencing an exponential technological growth that is propelling their software and hardware industries to unimaginable levels.
While budget could be an essential factor in outsourcing, it’s not the only reason organizations in the US are turning to Latin America to find top-notch talent.
- A burgeoning tech talent pool
Latin American countries like Brazil and Mexico have invested heavily in developing their tech talent pool, allowing software professionals to gain additional skills and familiarize themselves with emerging and niche technologies. There has also been a significant increase in innovation programs and the number of technical universities in Latin America, resulting in the creation of a steady pool of engineers and developers. Recent research revealed that there are over 1 million senior software engineers in the region, with a high number of them having previous experience working remotely for US companies.
- Better time zone alignment (than Asia)
Latin America has a better time zone compatibility and cultural alignment with the US, as compared to the outsourcing destinations of Asia. This ensures real-time problem solving, enhanced communication, improved collaboration, and thus productivity and successful project outcomes.
- Multilingual tech resources
Latin American tech resources, especially those from Mexico and Brazil are multilingual, and very fluent in English, due to the close proximity to the US, removing communication and language barriers, and promoting better collaboration.
- Closer proximity to the US
Close proximity to the US not only ensures a similar work time zone but also facilitates easier travel and communication (as opposed to outsourcing teams in Asia & Europe), thus ensuring minimal work disruptions and a lower risk of missing deadlines. This ease of travel coupled with highly skilled talent makes outsourcing in Latin America a new standard for companies looking to expand.
- Increased Investment in infrastructure, education & development
Many Latin American nations have been investing heavily in technology, telecommunication, and education to build the right infrastructure to foster a culture of development and learning and create employable high-quality resources that can be part of the world’s top tech talent.
- Protection of IPR
One of the key concerns of businesses of all sizes in outsourcing software development is the protection of Intellectual property rights for the solutions that are being developed. As the proximity increases, development teams from countries like Mexico and Brazil will have a better understanding of the IP laws of the US and will know how to navigate them and prevent them from derailing operations.
- Cost Savings
The key attraction of nearshoring to LATAM is the significant cost savings, since lowering the cost of labor and operational costs is a priority for all growing companies. And this is a key reason why Latin America has become a hot spot for hiring tech resources. The resources in Latin America provide high-quality work for less than their US or European counterparts, including the elimination of costly bonuses, perks and benefits offered to internal teams.
Capitalize on top IT talent without increasing costs by nearshoring your software development to Latin America with ShoreWise. We can empower your business by helping you scale operations by building, growing, and managing remote tech teams in Latin America. Through remote staffing and direct placements, we ensure that your business finds high-quality talent to continue developing your technology teams, fill skill gaps, and respond to scaling needs.