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Typically, the main reason companies consider outsourcing close is cost-effectiveness. A Deloitte Global Outsourcing survey in 2020 found that 87% of IT companies are considering outsourcing close to cutting costs. This may explain why experts expect the global outsourcing market to grow by $40.16 billion by 2025. While budget can be a key factor in outsourcing, it’s not the only reason why US companies are turning to Latin America to find top-tier talent.
The area is now one of the most reliable places to reach premium developers through close grounding. Latin America is ideal for investing because companies can benefit from a low-cost labor market, rich natural resources, and an expanding consumer market. Technology, especially software development, is taking shape in the region. As of 2018, Brazil had over 475,000 software developers, while Argentina had over 114,000 software engineers. M&A activity is also increasing in the region, attracting global companies.
Overcoming talent shortage
One hurdle that senior executives face is a talent shortage. It can be difficult to find and hire UI/UX and Machine Learning (ML) designers and technology experts in many countries. While many companies in the United States can meet such a challenge, Latin America has a growing number of dedicated experts who can take on challenging projects.
For example, Colombia is one of the countries with great technology software institutions. Columbia universities produce approximately 13,000 software development students annually. From 2001 to 2013, universities in Colombia produced more than 340,000 IT professionals.
From Mexico to Argentina, Latin America is teeming with bright young web developers, data scientists, and programmers, driving the rapid growth of the Latin American tech sector. Based on the current technological development in Latin America, experts anticipate that the region will continue to produce first-class software development professionals to meet the growing needs of the industry.
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Benefits of Close Outsourcing
Companies looking to find the most up-to-date talent, reduce overhead and overhead and improve efficiency can turn to close outsourcing. It has proven to be a successful model, and many companies use it. It allows organizations to move their operations to a more economical location, but close enough for easy operations. Nearshoring reduces issues such as cultural differences and control over the level of decision-making.
Here are some of the ways that close grounding in Latin America can benefit a company:
Better communication and no time differences
There is no doubt that language and cultural differences can cause significant obstacles in the workplace that are difficult to overcome. Problems that may arise include legal dilemmas, delays and communication barriers. This is why many US tech companies consider Latin America an approach to outsourcing because outsourcing is simple and straightforward with minimal loopholes.
There are no significant geographical differences, which means that the cultural differences are fewer. Also, close grounding allows your team to work in similar time zones. This makes it easy to collaborate with team members.
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Similar legal aspects
Intellectual property (IP) laws are essential when it comes to software development. Since outside professionals are close to you, it is likely that they understand your country’s intellectual property laws and will know how to navigate them when such a situation arises. This is critical for any software development company as it prevents them from running into legal problems that could hamper operations.
Better return on investment (ROI)
Many companies outsource because they want to increase their return on investment. While offshoring may seem less expensive during the initial stages, you will likely incur additional expenses along the way due to some challenges. Problems that can lead to increased costs may include lack of control, underperformance, and management issues.
Latin America has been producing smart software developers, and shows no signs of slowing down. With the shortage of tech experts globally, especially in the United States, Latin America is in a good position to collaborate with tech companies.
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