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Typically, the main reason companies consider nearshore outsourcing is for profitability. A 2020 Deloitte Global Outsourcing Survey found that 87% of IT companies are considering nearshore outsourcing to reduce costs. This could show why experts predict the global outsourcing market to grow by $ 40.16 billion by 2025. While budget can be a critical factor in outsourcing, it is not the only reason. where American companies are looking to Latin America for top talent.
The region is now one of the most trusted places to access high-end developers through nearshoring. Latin America is ideal for investment because businesses can take advantage of a low-cost labor market, rich natural resources, and a growing consumer market. Technology, especially software development in the region, is taking shape. In 2018, Brazil had over 475,000 software developers, while Argentina had over 114,000 software engineers. Mergers and acquisitions in the region are also on the rise, attracting global companies.
Overcome a talent shortage
One of the hurdles facing senior executives is the talent shortage. It can be difficult to find and recruit UI / UX designers, machine learning (ML) and technology experts in many countries. While many companies in the United States can face such a challenge, Latin America has an increased number of specialist experts capable of undertaking ambitious projects.
For example, Colombia is one of the countries with excellent institutions of technological programs. Colombian universities train around 13,000 students in software development each year. From 2001 to 2013, Colombian universities trained more than 340,000 computer experts.
From Mexico to Argentina, Latin America is teeming with bright young web developers, data scientists and programmers, driving the rapid growth of the Latin American tech sector. Based on the current technological development in Latin America, experts expect the region to continue to train top-notch software development professionals to meet the growing needs of the industry.
Related: Common Misconceptions About Offshoring
Benefits of nearshore outsourcing
Companies looking to find the most up-to-date talent, reduce overhead and labor costs, and improve efficiency can look to nearshore outsourcing. It has proven to be an effective model and many companies are using it. It allows organizations to move their operations to a more economical location, but close enough for easy operations. Nearshoring minimizes issues such as cultural differences and control over decision making.
Here are some of the benefits of nearshoring in Latin America for a business:
Better communication and no jet lag
There is no doubt that linguistic and cultural differences can create considerable barriers in the workplace that can be difficult to overcome. Problems that can arise include legal dilemmas, delays and communication barriers. This is why many tech companies in the United States are considering offshoring to Latin America because outsourcing is simple with minimal hassle.
There are no significant geographic differences, which means there are fewer cultural differences. In addition, nearshoring allows your team to work in similar time zones. This makes it easier to collaborate with team members.
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Intellectual property (IP) laws are essential when it comes to software development. Since your outsourced specialists are nearby, they likely understand your country’s intellectual property laws and will know how to navigate when such a situation arises. This is crucial for any software development company as it prevents them from getting caught up in legal issues that could derail operations.
Better return on investment (ROI)
Many companies outsource because they want to increase their return on investment. While offshoring might seem less expensive in the early stages, you will likely face additional expenses along the way due to some challenges. Problems that can lead to increased costs can include lack of control, underperformance, and management issues.
Latin America has produced savvy software developers, and it shows no signs of slowing down. With the dearth of tech experts around the world, especially in the United States, Latin America is well placed to collaborate with tech companies.
Related: The Key to Getting the Most Out of Your Nearshore Software Team