With a growing need for talent in the tech market, more small businesses, startups, and entrepreneurs are turning to nearshore outsourcing in Latin America. Nearshore outsourcing involves staffing individuals or teams from a nearby region to fulfill certain job requirements — in this case, IT requirements.


While sourcing talent from offshore locations has previously been the remote hiring method of choice, many businesses are turning to nearshore staffing, as it allows for more efficient integration and communication.


Particularly in the IT industry, recruiting quality candidates is growing more difficult. The low unemployment rate certainly contributes to this challenge, but an increasingly high demand with not enough talent supply is the key motivator behind this struggle. Plus, the average cost per hire is an ever-growing statistic, and some companies simply can’t afford to hire new teams.


That’s why so many organizations have turned to nearshore staffing IT talent in Latin America, where many of these issues are less prevalent, and companies can achieve greater benefits from remote hiring.


1. Booming Tech Infrastructure


When it came to tech outsourcing in the past, regions like Europe and Asia were the go-to- destinations. Now, the past decade has proven Latin America to be one of the most popular regions for remote recruitment. This is largely due to the growing emphasis on LATAM tech industries, and greater access to quality education for young LATAM developers.


As one Stanford report states, LATAM government agencies are pushing the development of technical training centers across the region, and more students can access greater educational opportunities than ever before. Undergraduate and graduate programs are easier and more affordable to enroll in, and IT degrees like computer science and engineering are currently the trending fields of interest.


Plus, due to the pandemic, the boom of tech startups and digital transformation has only accelerated throughout LATAM countries. After the mass 2020 job-quitting in the U.S., Latin America was forced to become a growing ecosystem of LATAM developers.


According to Statista, nearly 500 thousand software developers in Latin America were involved in remote operations in 2021. Now, thanks to the high level of technological literacy, that number is only expected to increase.


As more companies take notice of this trend, Latin America will only become a more desirable staffing ground for fulfilling tech needs — so it only makes sense to start outsourcing talent now.


2. Language and Culture Alignment


One of the biggest concerns for companies when hiring foreign talent is overcoming language barriers — and for good reason. When integrating local and international teams, it’s crucial to have a direct line of seamless communication.


Otherwise, employees can have misunderstandings and projects can become confusing, resulting in time-consuming and costly errors to fix. Fortunately, by nearshore staffing in Latin America, companies don’t have to worry about this problem.


Not only are LATAM developers highly proficient in English, but a growing portion of young students are learning the language from an early age. This means, by the time they reach the college level, they’re highly competent with English-developed training programs. And after just five years of experience, the majority of these developers are skilled in various coding and programming languages, technologies, and frameworks.


Similarly, the exposure to Western lifestyles makes Latin America a popular choice for U.S. integration. When it came to remote hiring in European regions, differing cultures made it difficult to merge teams.


With LATAM staff, certain core values that are key to the U.S. workplace have remained consistent throughout the cultural change. These values include a strong work ethic, understanding the power of teamwork, and recognizing the importance of the workplace hierarchy.


3. Affordable Price Per Hire


For companies looking to save on hiring expenses, staffing in Latin America is the ideal solution. Since Latin America has a generally lower cost of living, the average cost per LATAM hire is equally low. Companies can hire three highly skilled and experienced Latin American workers for the same cost as one U.S. developer.


Even hiring local entry-level workers is more expensive than sourcing from Latin American talent pools. One study suggests that the hourly rate for U.S. developers can reach up to $300, while the average hourly rate for Latin American workers ranges from just $45 to $80.


Moreover, European and Asian hiring costs are on the rise, with the International Labor Organization’s World Wage Report citing that Chinese wages have doubled in the last decade, and European regions are looking to experience an influx in labor costs, as well.


Hiring from local talent pools is practically out of the question, too. A draining talent supply has made it harder than ever for recruiters to find qualified candidates. And for those that can, growing competition has resulted in skyrocketing hiring costs, with the average cost per hire reaching more than $4,000.


When sourcing LATAM talent, these costs are nearly cut in half — meaning company leaders don’t have to worry about draining their recruitment budget.


4. Close Proximity Allows for Seamless Communication


Having major timezone differences between teams can cause a lot of issues in fulfilling project deadlines, ensuring effective collaboration, and maintaining productivity. Particularly during the onboarding process, it’s of paramount importance to have close communication and be readily available.


In line with cultural similarities and less challenging language barriers, Latin America’s close geographical location offers an easier onboarding process. Unlike working with teams out of Asia or Europe, LATAM outsourcing allows internal teams to collaborate seamlessly with nearshore talent thanks to similar time zones.


5. Growing Tech Talent Pool


With growing access to educational and technological industry opportunities, Latin America has developed a broader pool of talent. Companies can select various technological talents according to their needs, ranging from full-stack developers to data analysts to mobile app developers.


Whatever your outsourcing requirement, there’s a high likelihood that the LATAM workforce can supply it. As your company looks to expand and scale, it’s wise to consider outsourcing to Latin America for your tech needs.


With an increasing level of expertise in IT fields, LATAM workers can deliver high-quality service for significantly low labor costs — all with little to no integration difficulties.

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