The IT industry is changing rapidly, and businesses are constantly searching for skilled and innovative talent to remain ahead of the competition because, after all, employees lay the foundation for success. However, there is a scarcity of talented IT developers, which is affecting companies’ productivity and profitability.
Since the past few years, there has been a surge in the demand for developers. To fill the vacant positions, there was mass hiring, and the skills and quality didn’t matter much to meet the goals. That has created a significant gap because there are ample developers available, but the talented and skilled ones are scarce.
To overcome this skill gaps, companies have opted for outsourcing software developers, specifically looking for nearshore software developers. For American Tech businesses, Latin America is the best place to outsource remote software developers because first of all, they are skilled, and second of all, affordable labor rates.
Latin America is rising as a hub of skilled and talented developers, including those with experience in emerging technologies, like AI/ML, AR, and Blockchain. Latin America’s Governments have invested in building modern IT infrastructure, such that they are suitable for nearshore cooperation. Let’s learn why LATAM is set to become the next big exporter of software developers, and why your business should also hire developers from Latin America.
Growing Need for Tech Talent
In the US, the demand for tech talents is high. There are several reasons why this is happening. Still, the most significant is the rapid and profound digital transformation that businesses in all sectors of the economy are having to deal with.
As a result, the need for software engineers is projected to grow 25% from 2022 to 2032. In the United States, there are 65,000 computer science graduates annually, and there are many more jobs available for them than there are engineers available.
A global shortage of several million developers by 2025, according to International Data Corporation, might result in unrealised yearly income of over $8.5 trillion by 2030. Many tech positions, such as QA analysts and software testers, are estimated to rise 25% between 2022 and 2032. With the need for tech talent in the US at an all-time high, businesses are turning to the LATAM region to gain a competitive advantage.
Due to the enormous gap between the demand and supply of competent developers in the US and throughout the globe, US businesses are compelled to search outside of their borders for qualified programmers. Where, though, are they going to locate them? The solution can lie unexpectedly close to home.
Latin America, More Than Just Beautiful Beaches
Latin America is growing in terms of business, technology, and economy, especially when it comes to new start-up enterprises. There is also a significant concentration of IT businesses in other areas, including Mexico, Argentina, and Colombia.
Latin America has quickly risen to the top as a source of highly trained tech workers, helping businesses stay ahead of the curve in the tech industry. While other parts of the world remain front of mind when discussing offshoring software outsourcing requirements, LATAM and nearshore delivery are growing and competitive location models that offer distinct value for outsourced services.
Factors Contributing to LATAM’s Growth in Tech Industry
A vast, educated workforce, rules that encourage entrepreneurs and start-ups, and numerous extremely successful start-ups, more than fifty of which are worth more than $1 billion, all contribute to the growth of technology in Latin America.
1. Government Plans
Governments in Latin America have developed programs to promote STEM (science, technology, engineering, and mathematics) education. Between 2015 and 2021, Argentina and Brazil produced national Computer Science curriculum guidelines for primary and secondary education, following decades of educational technology programs that equipped schools and incorporated digital software in classrooms.
2. Educated Workforce
The Chilean Ministry of Education’s National Plan for Digital Languages, which encourages more students to pursue jobs in computer science and engineering, is one example of a successful policy. This plan begins before college, with institutions offering computer science lectures and preparing teachers in the discipline.
Each year, US institutions graduate fewer than 50,000 software developers. Mexico and Brazil, on the other hand, produce 605,000 software engineers per year, indicating a strong emphasis on technical education in those countries. By the way, this amazing number does not include graduates from other significant countries in the region.
3. Cost-Effective Business Strategies
While obtaining skilled digital talent in the United States and Canada can be challenging and costly, choosing to ‘nearshore’ and hire employees in Latin America can not only extend the hiring pool but also save money.
Lower employment and living costs, as well as attractive exchange rates, enable North American corporations to save when recruiting in Latin America. Exporting goods from Latin America to the United States and Canada is likewise less expensive than other locations.
4. An International Perspective
Latin America has emerged as a major force in the global technology industry, with 156% more enterprises seeking to hire LATAM developers. This immediately thrust the region into the spotlight, pushing governments to implement measures to encourage local tech talent to fulfil the demand.
Collaborations between universities, industry, and other stakeholders have helped increase interest in developer careers. Corporations in the United States and Canada have faced a skills deficit, which the availability of local tech expertise can now mitigate.
In Latin America, however, the emergence of highly specialized developers, combined with the cost-effectiveness and flexibility provided, makes it an appealing option for businesses during recessions.
Why are Latin American Developers Good for American Companies?
In Latin America (LATAM), the nearshore outsourcing scenario is more attractive than ever. The area is quickly becoming a center for IT outsourcing because of its growing IT skill, affordability, and cultural fit with Western enterprises. Here’s a detailed look at what makes LATAM unique for hiring nearshore software developers:
1. Time Zones and Culture Alignment
LATAM provides business and technological talent, improved infrastructure, and the advantage of significant time zone and cultural overlap with North America, making it excellent for same-time zone operations.
2. Thriving LATAM’s IT Industry
Despite the region’s economic and political challenges, LATAM’s tech is booming. With reference to the LATAM IT market in 2022, Brazil’s IT sector, for example, had a worth of $45 billion, $28 billion in Mexico, and $6.5 billion in Peru.
3. English Proficiency Index
There are no linguistic obstacles. Aside from access to technology education, LATAM countries routinely score moderate to high on the English Proficiency Index.
4. Rise in Remote Work Opportunities
Following 2020, there has been an upsurge in remote work. According to Forbes, 98% of employees desire to work remotely, at least partially. From January to December 2022, 89% of all contracts were for remote workers.
All of these variables drive the expansion and development of a location with a thriving tech scene. Many well-known IT companies and startups are outsourcing IT projects to Latin America, increasing the region’s prominence as a hub and making plans to hire developers in Latin America.
Furthermore, numerous major IT companies, such as Amazon, Airbnb, Dell, GoDaddy, Google, Netflix, and HP, have already established operations in Brazil. As a result, many LATAM developers have extensive expertise working with a wide range of technology projects and enterprises, from startups to Fortune 500.
Future Potential
LATAM has created more than 40 unicorns (businesses worth more than $1 billion), with six obtaining this status in 2023 alone. Major tech companies such as Amazon, Airbnb, Dell, GoDaddy, Google, and Netflix have long-term operations in Brazil, bolstering the country’s technological credentials.
LATAM tech talent presents a tempting answer to the US and European tech talent shortages. If they have the necessary education, seniority, or experience, they can communicate in English, Spanish, and Portuguese and work in the same time zones.
LATAM is a strategic choice for organizations due to its high-quality people, low cost, cultural congruence, and favorable business circumstances. By tapping into this rich talent pool, US and European corporations can drive innovation and growth while capitalizing on LATAM’s great potential.
Final Words
LATAM’s developers and software engineers are excellent. They have the necessary education, seniority, and experience working with large, worldwide firms. They speak English fluently and live and work in the same time zone as you; we could go on.
Hiring developers in Latin America provides an excellent opportunity to employ high-quality technical expertise at competitive costs. The region’s core nearshore benefits, as well as the presence of various tech clusters and personnel with diversified capabilities, make it an excellent alternative for organizations aiming to reduce development costs.
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