Nearshoring: Top Tech Talent Close to Home

Uncertainty plagues US economic and business forecasts. Unemployment remains historically low, yet fears of rising interest rates, inflation and even recession remain. The tech industry has seen high-profile layoffs, and while some workers are still looking for jobs, many were quickly scooped up by competitors. There are still more tech job openings than there are workers to fill them. We anticipate those actively job searching will find new work by the fall, and hiring managers and recruiters will continue to face a tight tech labor market.

In other words, demand for IT workers — especially those with expertise in areas such as cybersecurity, infrastructure and cloud — will continue to outweigh economic uncertainty. In such a climate, organizations must get creative to find and retain the best tech talent. Many companies have turned to outsourcing to fill this need.

According to Deloitte), effective outsourcing goes beyond cost and skillset considerations and includes time zone differences, cultural similarities and enhanced infrastructure. To meet those requirements, many US organizations are considering outsourcing to nearby Latin America. This strategy — nearshoring — delivers many benefits and has the power to supercharge your tech talent acquisition program for today’s market.

Top Benefits of Nearshoring

Nearshoring drives cost savings. In 2021 and 2022, wages for U.S. tech workers rose significantly. In 2023, analysts estimate some tech jobs could see salary increases of 8%, with the average wage increase of 5.6% for all IT positions. As a result, US organizations are looking south of the border for application developers and software engineers to offset this upward wage pressure. By outsourcing software development jobs to nearshore workers throughout Latin America (LatAm), companies are finding highly qualified talent at lower wages.

Time zones are similar nearshore vs offshore. There is only a one- to two-hour time difference between the US and Mexico, Colombia or Brazil. By comparison, India and China have up to 12-hour time differences with the US, which can impact collaboration, real-time communication and productivity. Moreover, the lack of home internet in many Asian countries often means the US-based teams must work overnight to catch offshore counterparts during their office hours. Over time, this can prove exhausting and may impact employee morale. Nearshore tech teams, by virtue of their proximity, seamlessly support standard US business hours.

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LatAm has invested significantly in STEM education. STEM education is robust in many Latin American countries. You’ll find software developers and software engineers with strong academic backgrounds from Mexico, Guatemala and Costa Rica to Colombia, Uruguay, Brazil and Chile. For example, Mexican universities annually graduate over 110,000 engineers (20% of all graduates). Also driving LatAm STEM education is a surge in venture capital investments. In 2021, LatAm venture and tech growth investments rose to almost $20 billion, triple that of previous years, making it the fastest growing region in the world for venture funding.

Cultures are similar across the Americas. Latin American countries have vibrant cultures and a strong tradition of entrepreneurship in addition to their investment in science and technology. Companies find that workers are down-to-earth, humble and ready to roll up their sleeves to achieve results. Work-life balance is a priority, making remote work desirable. Experienced and dedicated remote IT teams lead to faster onboarding and a higher return on investment.

Language differences are not an issue. In academics throughout Latin America, English proficiency is a given and engineers generally speak excellent English. Additionally, tech companies in the US have outsourced to LatAm for more than a decade. Amazon, Apple and PayPal have each worked with IT talent in Colombia since 2010. As a result, there is a robust tech workforce in Colombia that understands the pace, culture and expectations of US companies.

Embrace the Advantages of Nearshoring

Nearshoring isn’t a trend. It’s a business strategy that is here to stay. Nearshore outsourcing is a powerful tool for recruiting and retaining tech talent. Now is the time to integrate nearshoring in your IT talent acquisition planning.

Marina Perla

Marina Perla
Marina Perla is the founder and CEO of Mojo Trek, a global technology staffing company.

Marina Perla

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