Latin America is your best nearshore development option
And one could argue that Latin America is the ONLY nearshore option, really.
In an era where technology drives innovation and competitiveness, finding the right software engineers is crucial for companies aiming to stay ahead of the curve.
With its rapidly growing tech ecosystem, Latin America has emerged as a prime destination for sourcing top-tier engineering talent. We created a guide that offers insights into the talent market in Latin America and the various hiring options available. Each hiring option comes with its own set of advantages and considerations, ranging from speed of onboarding to control over talent decisions and operational overhead. In this post, we will summarize the three main reasons why Latin America should be at the top of the list when considering nearshore development.
The tech ecosystem has become increasingly global, in part driven by the globalization of VC and the rise of distributed teams. Latam is a critical player, both as a top destination for skilled developers – and as the home of emerging tech hubs and thriving startups.
Abundance of skilled developers
LATAM is outpacing other regions as a top destination for high-skilled developers, according to the 2023 HackerRank Developer Skills Report. Strong technical education, in addition to the the rise of more and more startups has created a fertile ground for technical talent. Further, English proficiency is quite strong (with Argentina ranking highest overall.
In 2010, there were only 12 cities with at least one unicorn or $1B+ exit. According to Dealroom, that number had risen to 168 (cities) by 2022. Latam, in particular, has many “rising stars” in the tech ecosystem, including São Paulo, Curitiba, Belo Horizonte, Rio de Janeiro, Buenos Aires, Bogotá, Mexico City, Santiago, and Montevideo.
It can be easy to underestimate the experience of talent in Latin America. However, increasingly, local talent is getting real startup experience at scale within unicorns and future unicorns across the region. Same applies with educational institutions.
Here we provide a non-comprehensive list, via Dealbook, of these major players so that these names are more meaningful when you spot them on a resume.
Time-zone alignment
One could argue that Latam is the ONLY real nearshoring possibility, geographically speaking. The timezone alignment is a real advantage - specially when taking into consideration the long term retention of the talent. Significant offsets in time-zone require sacrificing convenience on either (or both) end of the relationship. These setups may work temporarily, but often struggle to stand the test of time.
Ample time overlap enables the building of trust and a more productive working relationship.
Affordability of talent
Engineering talent in Latin America is meaningfully more affordable than talent in the United States, largely due to lower cost of living. As a general rule of thumb, you can expect to pay approximately 30-40% of what you would in a US tech hub.
Below you see the salary bands by seniority levels for Developer with high English proficiency (who command a 2x-3x higher salary than those who can't communicate in English).
Feel free to check out our more detailed salary guide.
Conclusion
Time-zone alignment has naturally attracted companies’ interest in having near shore development centers in Latam. A goldilocks combination of significant cost reduction without compromising on hard technical skills are the main two reasons behind the strategic decision that Latam talent pools convey a very attractive value proposition for US-based software startups.