Why US startups outsource software development to Latin America in 2020

by Josh Biggs in Startup on 31st October 2020

If you are a startup based in the US, you might have already realized the importance of outsourcing software development. With too much demand for local US developers, it is understandable that they have become expensive. Hence, there is no other way but to outsource software development to save some money. While companies, especially startups opt for outsourcing primarily to cut costs. In real-time, it isn’t just that.

Startups can also reap benefits such as working with global skilled experts, save time, meet deadlines smoothly, increase efficiency, and finish the project with less stress. Moreover, companies can focus on core principles and goals while the new remote team is working for you.

Furthermore, outsourcing software development is not stressful. You need not look around. Outsource work to Latin America confidently as it has become one of the most popular and most-chosen offshore destinations in the world for software development outsourcing. Especially Mexico, as it ranked as the top 1 country among all Latin American countries. 

Most US companies are already outsourcing software development in Mexico to boost their business both in terms of profitability and effectiveness. Hence, you should consider LatAm and Mexico for software development outsourcing too.

Though it looks like the Latin American countries became hot spots for outsourcing only due to the pandemic. There are actually still many other reasons for this.

Let us discuss the reasons (also benefits) for US startups to outsource software development to Latin America in 2020. So, shall we?

Reasons why you should outsource software development to Latin America

Mature IT Infrastructure

Latin America has a great talent pool that is highly specialized in software development. In fact, in Peru alone, there are nearly 25,000 developers ready to work on new projects. Mexico has over 223,398 software developers as of 2018 according to Stack Overflow. Thus the region is crowded with skilled developers making it hard to choose a candidate. However, with plenty of hiring teams available, finding the right fit isn’t tough.

Moreover, after the Mexican government and private developers had invested in building tech and business parks, there is a tremendous increase in the number of software developers and engineers in the country. Thus not just Mexico, other countries such as Peru, Chile, Argentina have great IT infrastructure with a great number of IT parks, office parks, co-working spaces, etc. In fact, some of the companies and agencies in Latin America are adapting US-workstyle to make the collaboration look and proceed smoothly.

In addition to infrastructure, the developers in the Latin American countries are highly professional and disciplined. Hence, there is not an ounce of fear to miss deadlines or get frustrated.

Close Time-Zone

One of the main challenges when outsourcing work to offshore companies is time. It is difficult to collaborate with your team in real-time if the time-zone difference is large. In fact, this is one of the reasons why Latin America set to boom during the pandemic. Most companies are preferring nearshore destinations over offshore destinations to outsource their projects.

Moreover, it is definitely not a smart choice to work with a team that has a 12 hour time difference with you, especially when you are on tight deadlines. This is the major reason why Latin American countries have set to boom during the pandemic. 

Contrary, it is easy to collaborate on Slack, or Zoom or meet in person if really required from a near time-zone. It won’t take more than 4 hours from the main cities of the US to travel to any LatAm cities. Also, it only takes 2 hours 40 minutes to meet your team in Mexico from the US.

Thus Latin American countries are saviors for US startups as they are close to the US both in time and distance.

Lower Costs

Hiring an expert US developer is expensive. You have to pour a lot to get one on board. This is where outsourcing to Latin America comes into the spotlight. Though the prices for developers in Latin America is costly when compared to eastern European countries or India, they are not as expensive as the US developers.

In another way, the charges are worth as already said, Latin America has great IT infrastructure and disciplined developers.

Outsourcing is a cost-effective strategy, and outsourcing to Latin America is a more bright idea.

High Employee Retention Rate

This is one of the important factors you should consider when outsourcing any projects to offshore destinations. Because, when you are working under tight deadlines, you shouldn’t invest your time to adjust with new employees often. It not only distracts your flow but takes you to the deadline faster.

Hence, you should look for offshore companies that retain, train, and grow their employees to make the job easy for you. In this aspect, Latin America stands first in the list.

The developers in Latin America do not change their employers often. Most countries in the region have a high retention rate of developers when compared to Asia, Eastern Europe.

Fast Delivery

Speed is the other reason why startups generally prefer outsourcing. Hiring and in-house training are not only a long process but they also may not result in 100% efficiency. It is risky even. An experienced team from offshore companies is the only smart and cost-saving option.

The work will be done faster before the deadlines and you can take the product to people before the competitors do. As developers from Latin America are highly disciplined and professional, you need not worry about the delivery.

Bottom Line

Thus, Latin America is surpassing all other offshore destinations in every factor. In fact, it even surpassed China in English proficiency which is one of the key factors for US companies to choose an offshore company. Moreover, as you can see, Latin America’s infrastructure, close time-zone, and availability of a large professional talent pool promise fast delivery of projects.

So, hope this article not only helped you in discovering why US startups in 2020 outsource software development to Latin America but also helped you with the factors you need to consider while outsourcing.

Categories: Startup