What To Expect From South America Outsourcing
Once you’ve discovered the elegant solution of nearshore software development in Latin America, what should you expect from the South America outsourcing experience?
Outsourcing in Latin America is on the rise
Many of these South American tech entrepreneurs aim to build software companies to service the US market, across a variety of technologies. According to Everest Group, South America outsourcing represented 10% of the global services market in 2017, while the region attracted 19% of new branch locations worldwide. Latin America’s global services outsourcing market has been growing at a recent rate of 12%.
According to Everest, among the key drivers for Latam growth is the abundance of talent to support digital capabilities for large corporate initiatives, and these countries’ growing domestic markets for those same products. These are two factors that US clients find quite appealing when seeking to build their nearshore teams.
US start-ups are starting to discover the advantage of nearshoring
Typically, South America outsourcing software firms have worked with corporations and mature consumer product companies, but over the past couple of years there’s been an increased demand from start-ups at the seed and VC stages, from all over the States. Fierce competition for good local talent and increasing costs are the main drivers causing software companies to look at nearshoring.
A growing but still competitive talent pool, and the ancillary costs of doing business
In Buenos Aires and Sao Paulo, front-end developers earn on average $25,500 and $25,800, respectively, while wages for front-end developers in Lima, Bogota and Rio de Janeiro, vary substantially.
Wages for select IT professions are higher in Bogota than in other markets, but Bogota remains an attractive market for employers in part because of lower added costs.
Filling vacancies for developers and UX/UI designers is a challenge across several markets, especially in Buenos Aires. Vacancies for system administrator and project manager positions typically go unfilled for 10 weeks or longer.
Additional costs, in the form of bonuses and regulations, drive up the total cost of employing IT professionals by 44-85%. Added costs are highest in Brazil.
Some nearshore South America outsourcing firms run their own in-house training centers for continued education and learning new programming languages, so they can maintain a ready staff of fully trained talent for each incoming client.
Country Snapshot: Outsourcing in Colombia
The electrical and telecommunications infrastructure in Colombia’s major cities like Bogota, Medellin and Cartagena are some of the best in Latin America, and English is widely used.
Each year over 13,000 engineering and technical professionals in IT- related fields graduate from Colombian tech universities, though growing demand for talent is still outpacing the rate of new graduates in IT.
Similar to many developing nations, Colombia’s IT and business process outsourcing industries are doing very well; many U.S. corporations are setting up operations there, including IBM, HP and Unisys.
These foreign investments are adding to the already-sizable software development workforce that demonstrates familiarity with a variety of technologies and development processes, including Agile and CMMI.
The magical quality that seems to define Colombia, though, is something that permeates the culture itself. Similar to Vietnam and India, Colombians have an optimism and enthusiasm that’s contagious. Regardless of project roadblocks or challenges, they find ways to make things work. Such an attitude goes a long way to ensuring success in the software development world. Such passion is much needed and highly sought after. The major centers of software development are in Bogotá and Medellín, respectively the first- and second-largest cities in Colombia.
A bonding experience that turbocharges your team’s productivity
Nearshore America’s Nexus Awards conference often celebrates success stories about Silicon Valley firms’ experience with South America outsourcing. Many of them are stories of bonding between the local and nearshore teams. Latin Americans are very friendly and share the same work values as their counterparts in the US. We consume the same media, from TV shows to music, and are eager to create great things as well. Bonding happens when we can laugh together about the latest episode of Silicon Valley as we dive full-bore into our next sprint.
Jobsity is a nearshore staff augmentation firm with offices in Ecuador and Colombia, providing pre-assembled, highly skilled developer teams to product companies and digital agencies in North America. If you’re ready to get started now with South America outsourcing, you may want to check out our e-book. It offers a complete guide on how to build a distributed nearshore outsourcing team, down to the last details like what’s essential to include in your contract. Go here to download your free copy.
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