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Large corporations, tech giants, and small businesses in the United States need help keeping up with the growing tech demands. The limited tech specialties and high labor rates in the country are among the main reasons why Latin America has become a prime destination for IT and software development outsourcing.
American companies mostly now prefer to hire Latin American developers. Outsourcing to this nearshoring location by US-based entrepreneurs and business owners has provided numerous benefits for both US businesses and experts in Central and South America.
Benefits of hiring Latin American developers
Hiring remote workers has numerous benefits, and recently, more and more companies are now opting to outsource projects and even full-time employees. Having a remote work environment reduces the overhead costs of a company, such as the cost of office space, in-house resources, and utilities. Employees who work from home also tend to be more productive and can work flexible hours. There are many more benefits of nearshoring to Latin America. Some of them are listed below.
1. Vast and Qualified talent pool
For over a decade, the tech sector in Latin American countries has been booming and providing a steady influx of remote IT professionals. Moreover, every year, the region offers a record number of highly skilled tech graduates, most of whom are multilingual. On a global scale, Latin America is ranked as second-highest in the list of regions with the largest number of developers. The LATAM tech talent is top-ranked, having elite programming and software development skills, making them a perfect pick for offshore recruitment. US companies are able to gain access to a larger pool of talent by opting to outsource to nearshore locations instead of just onshore.
2. English Language Skills and Cultural Diversity
Companies prefer to hire nearshore developers in LATAM as experts there are aware of the United States's cultural norms and can provide more relevant solutions. Latin Americans have been familiar with the US culture and English language since childhood, as throughout the LATAM region, English is a compulsory second language. With the increasing demand for Latin American offshore talent, there is a 70% improvement in English proficiency across the region. The cultural gap is narrow, and language barriers are nonexistent, which makes collaboration and understanding between team members easier.
3. Same time zone, effective collaboration
Outsourcing in Latin America is less challenging compared to Asia and Europe. The significant time zone difference between the USA and Asian countries compromises productivity and efficiency, as some Asian countries, such as China, are up to a full calendar day ahead of the United States. Therefore, LATAM is a hotspot for hiring developers as the time difference with the U.S. is between an hour to three hours, making it easy for the team to communicate and collaborate. Aside from this, the close proximity makes on-site visits easier as flight duration is less and travel expenses are more affordable compared to Europe and Asia.
4. Low Labor Rates
Another major reason why companies prefer to outsource IT service providers and software developers from LATAM is cost-effectiveness. Nearshore development and technical experts in LATAM charge a significantly lower fee compared to onshore experts in the US. Hence, nearshore outsourcing experts from LATAM suit American firms and businesses. LATAM developers and IT solutions providers are highly experienced in their relevant fields, and many of these experts have achieved their skills through top-notch institutions. Therefore, a low service fee doesn’t mean that the quality of work will be compromised.
5. Flexibility with Work Hours
There are many companies that may require employees to work round the clock. Hiring numerous remote workers to work shifts and collaborate for major and urgent projects means work being done day and night. As the outsourced experts will be working from home, the firm won’t have to cover the costs of keeping the office running 24 hours every day.
6. Diversity and Regional Involvement
When a firm outsources talent from nearshore or offshore countries, it brings a diverse culture to the company. Having a diverse environment boosts the company's culture and, in turn, gives the company a positive reputation. Having a good reputation means having higher chances of offer letters getting accepted by top candidates. Deciding to outsource and hire Latin American developers will allow you to get an overview of the market in Central and South America and this will increase your brand's awareness in the region. Similarly, outsourcing projects to offshore countries provide the same benefits.
Myths About Nearshore Outsourcing To Latin America & Why They Are NOT True
LATAM developers lack the necessary skills.
This is far from true. Many LATAM countries have world-class universities and strong tech communities that produce highly skilled developers. Countries like Brazil, Argentina, and Mexico have engineers working with cutting-edge technologies for global companies.
Language barriers make communication difficult.
While Spanish and Portuguese are the main languages in LATAM, most tech professionals are fluent in English. Many software engineers in the region work with international clients and are well-versed in global business communication.
Time zone differences will slow down collaboration.
In reality, LATAM has a big advantage here. Its time zones align closely with the U.S. and Canada, meaning real-time collaboration is much easier compared to working with teams in Asia or Eastern Europe.
Quality is lower because costs are cheaper.
Lower costs in LATAM are due to economic differences, not lower quality. Developers in the region often follow the same best practices as those in North America and Europe, delivering high-quality code at a fraction of the cost.
LATAM is not a reliable outsourcing destination.
Some people assume that outsourcing to Latin America is risky, but many countries in the region have strong tech ecosystems and stable business environments. Cities like São Paulo, Buenos Aires, and Mexico City are home to global tech companies and startups, proving the region's reliability.
Outsourcing to LATAM is only for small projects.
LATAM software agencies handle everything from small apps to enterprise-level projects. Many global companies, including Fortune 500 firms, outsource entire development teams to Latin America for long-term, complex projects.
Intellectual property (IP) is not secure in LATAM.
This myth ignores the fact that many LATAM countries have strong legal frameworks to protect IP rights. Countries like Mexico, Argentina, and Chile follow international IP protection standards, ensuring companies can safely outsource their software needs.
Cultural differences will cause misunderstandings.
LATAM developers work closely with U.S. and European companies, so they understand Western business culture well. Their work ethic, communication style, and professional approach align with international expectations, making collaboration smooth.
Should Companies Worry About Potential Challenges When Nearshoring to Latin America?
Although nearshoring is as smooth as staff augmentation can be, businesses should take precautions when outsourcing their development needs to ensure a smooth collaboration and high-quality results. While outsourcing offers cost savings and access to top talent, there are risks like miscommunication, security concerns, and project delays if not managed properly. To avoid these pitfalls, businesses should take a strategic approach when selecting and working with an outsourcing partner.
Vet the Company Thoroughly:
Research the outsourcing firm's background, client reviews, and portfolio. Look for case studies and testimonials to confirm they have experience in your industry and can handle your project.
Clarify Expectations Early:
Clearly define project requirements, deadlines, and deliverables in writing. Misalignment on goals can lead to delays, so ensure both sides are on the same page from the start.
Establish Strong Communication Channels:
Set up regular check-ins via video calls, Slack, or project management tools like Jira or Trello. Consistent communication keeps everyone aligned and helps resolve issues quickly.
Protect Intellectual Property (IP):
Use legally binding contracts that cover IP ownership, confidentiality, and non-disclosure agreements (NDAs). This ensures your ideas and data remain secure.
Start with a Trial Project:
Instead of committing to a large contract immediately, begin with a smaller project or a test phase. This allows you to evaluate the team's performance and work style before scaling up.
Ensure Time Zone Compatibility:
If real-time collaboration is essential, choose an outsourcing partner in a time zone that overlaps with yours. LATAM, for example, is ideal for North American companies due to its minimal time difference.
Discuss Security Measures:
Ask about the agency’s cybersecurity policies and how they protect sensitive data. A good outsourcing firm will have strong protocols in place to prevent data breaches.
By taking these precautions, businesses can reduce risks and build a successful outsourcing partnership that delivers quality software while keeping operations efficient and secure.
Hire Latin American Developers with Blue Coding
If you're an enterprise or small business owner and would like to benefit from the advantages that come with outsourcing projects and tasks to Latin American experts, then nearshore staff augmentation might be the ideal solution. Blue Coding specializes in providing its clients with highly experienced software developers and technical service providers. We outsource top-notch experts from Latin America and prioritize the safety of every client's intellectual property and company data. Contact us now to schedule a free discovery call and learn more about our nearshore outsourcing services!
