Why Nearshore Software Development Companies are the Future of Tech Recruiting

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Why Nearshore Software Development Companies are the Future of Tech Recruiting

The tech scene is experiencing global uncertainties and growing market challenges, such as the widening skills gap,  few developers to meet market demand, and high turnover rates. So how can your business weather this storm? Nearshore software development companies provide services to clients in nearby countries or regions, usually within the same time zone or a few hours difference, mainly to navigate high internal demand, competition, and costs. 

According to a Deloitte Global Outsourcing Survey, 87% of IT companies considered nearshore outsourcing to reduce costs. This could explain why the global outsourcing market is expected to increase by $40.16 billion by 2025. Nearshore outsourcing is the future of tech recruiting, and Latin America is primed to be the preferred nearshoring destination for U.S-based tech businesses. The region is taking the spotlight from China and India, which have long dominated the outsourcing industry. But how did Latin America get here? Read on for more.

What's inside:

Quote from our CEO, Gino Ferrand: "Finding and hiring top tech talent constantly challenges businesses, but nearshore software development companies offer a game-changing solution. Businesses can tap into a vast pool of highly skilled tech talent while benefiting from cost savings and proximity advantages, making it a smart choice for the future of tech recruiting."

Watch a video version of this article:

LatAm’s Path to Tech Talent Excellence

Latin America is now the most popular destination for companies looking to access high-end developers through nearshoring, but the region has come a long way. 

The Past 

Nearshore companies in Latin America have a long and rich history of providing custom software development solutions to clients worldwide, especially in the U.S.A. The nearshore industry in Latin America started in the late 1980s and early 1990s when countries like Argentina, Brazil, Chile, Colombia, and Mexico began to develop their IT capabilities and attract foreign investment. In 1982, a Mexican company called Softtek was started to outsource IT services for American-based companies, and by 2010, it was the biggest private IT vendor for the USA in LatAm. Softek popularized the nearshoring concept, paving the way for upcoming nearshore outsourcing companies. 

The Present

Fast-forward to the 2020s,  tech is becoming an important part of economic growth in LatAm. Before the pandemic, the region was already headed to becoming a hotbed for tech startups. Fueled by a fast-growing middle class and a foreign investment influx, the region saw a massive boom in new tech businesses specializing in everything from digital media to e-commerce. Covid exacerbated this growth thanks to the dramatic move by consumers toward digital and online services. This boom of entrepreneurial activity was especially evident in Brazil, Colombia, Mexico, and Chile, where the number of startups has nearly tripled in half a decade. Also, LatAm will likely experience high deal volume as new tech and digital services keep evolving into the region. 

This tech growth and the surge in remote work post-Covid have led to a booming nearshore outsourcing industry. Nearshore software development companies in Latin America are thriving today as they have leveraged their strengths and advantages to meet the growing demand for software development services from clients in the U.S.A. and other regions. Today, thousands of LatAm companies, including TECLA, offer nearshore software development services to companies looking to outsource their development projects. 

The Future of Tech Recruiting is Now

The global software developer shortage is expected to rise to 4 million by 2025 as software developers have become one of the most in-demand careers in the US and beyond. Also, 61% of hiring professionals struggle with recruiting professional developer talent. So what’s the way out for tech companies struggling to recruit high-quality talent? We believe that the talent shortage and growth of talent hotspots in LatAm have paved the way for new connections and a new workforce type. 

Many American companies have taken note of the top software development talent down south and are looking to hire engineers from the region to kickstart, scale, or grow their businesses. And with the increased adoption of remote work in the region, nearshoring has become more feasible. Tech hiring from LatAm rose by 286% in 2021’s second half, -a greater jump than any other region globally (Asia- 227% rise and Europe, Middle East, and Africa-250% rise). Also, LatAm professionals were seen to be the most requested by companies around the globe. 

So, nearshore software development companies in Latin America are poised to become the future of tech recruiting. They can offer a unique value proposition to clients in the U.S.A. and other regions looking for top software development talent. Companies like McGraw Hill, an online education innovator, have hired nearshore developers to scale their teams fast and affordably. Waggl, an employee voice platform, used  TECLA’s nearshore software development services to improve its product and user interface. Nearshore staff augmentation works and has significant benefits if done right.

Infographic explaining why your business should nearshore to LatAm: Big talent pool, cost-savings benefit, massive talent growth, time zone alignment

Do you need help in outsourcing software development to LatAm?
Reach TECLA today for more.  

Nearshoring: A Game-Changer for Your Business

The post-pandemic tech scene is characterized by high digital transformation, competition for tech talent, and companies embracing remote work more than ever.  Tech companies hoping to survive and stay ahead of the curve during the economic recession must be more agile in responding to market changes, helping them pivot their strategies to capitalize on new opportunities quickly. This means diversifying your tech teams; the best time to do so is now. Companies need to expand their search for talent far beyond Silicon Valley and look to Latin America. Silicon LatAm is the next Silicon Valley, with tech startups and giants scouting the region for tech talent. 

Big-name companies like Uber, Google, and Microsoft have also set up regional branches, establishing cloud regions and engineering centers in Brazil, Mexico, and more. The region is also rife with private and CV investments that continue to sit well above pre-Covid levels, thanks to growing digital trends. And with all the nearshoring benefits your company stands to gain, from cost-effectiveness, access to top talent, and more, it's clear that you need to hop on this bandwagon and fast. 

And while this is an exciting prospect, it can also be exhausting. Where do you start, and how do you set out to find the ideal software development team in a completely new landscape? The best approach to working with LatAm talent is to choose a nearshore staff augmentation partner like TECLA that knows the ropes and has experience working with LatAm talent.  Here’s why you should trust us: 

  1. TECLA is an expert on LatAm with over a decade of insights and a pre-vetted network of 50,000+ bilingual developers who’ve worked with 500+ U.S. tech companies. 
  2. The hiring process is seamless and hassle-free, as we handle everything for you, from legal, HR, payroll, and more, as you focus on scaling your tech.
  3. Our 14-day trial period and 90-day guarantee let you interview top developers and scale your team in a matter of days with zero risk. 
  4. Our programs, such as TECLA Boost, close the gap in English fluency, cultural nuances, and communication skills, keeping your remote team on the same page. 
  5. No intermediaries- We give you access to senior-level talent on-demand, letting you decide precisely how to hire. 

Book a call with TECLA today to scale your software engineering team as needed and with complete flexibility.

FAQs on Nearshore Development 

What Is A Nearshore Software Development Company?
A nearshore software development company provides services like mobile apps or web development to clients in nearby countries or regions, usually in the same or similar time zone.
What Is The Difference Between Nearshore And Offshore Software Development?
Nearshore software development means that your development partner is located in a neighboring country with a time difference of four hours or less. On the other hand, offshore software development means your partner is located in a faraway country with a time difference of five or more hours. For instance, a U.S.-based IT company can nearshore its software development project to tech talent in Mexico or offshore to India.
What Are Nearshore Teams?
These development teams help tech companies develop custom software and work closely with the in-house team. They’re usually located in a neighboring country with similar time zones, making communication and collaboration easier.
What Is The Difference Between Offshoring And Nearshoring?
Offshoring is when a tech company transfers part or all of its business operations to a distant country, giving it access to top tech talent at much cheaper rates. Nearshoring is pretty much the same, but the main difference is distance and culture. With nearshoring, companies relocate business operations to a neighboring country with similar time zones and cultural similarities.

Abigail Houck


Abigail Houck

Abigail Houck

Abigail is COO @ TECLA. With more than ten years in the tech recruiting industry, she is especially focused on international and global talent acquisition.

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