Published on Forbes - 25/04/2023 07:15 am ET
By Marcelo Tribuj
Founder and CEO at Truelogic Software. Expert in nearshore software engineering, technology, international growth and talent management.
Latin America is a region that is overgrowing in terms of its economy, technology and business, particularly with regard to new startup companies. To demonstrate this in numbers, Brazil alone was the beneficiary of over $45 billion in total IT investment last year, not to mention the density of tech companies in other regions like Colombia, Argentina and Mexico.
For me, one thing is clear: For this growth to take place, the region must have a strong pool of tech talent—the natural resources that make this wheel turn.
I believe the advent of increased internet and mobile use, combined with incentives from governments for companies to open local branches and hire locally, have been the key contributors to the exponential growth of the software-as-a-service market.
Latin America has been quick to meet the growing demand, becoming a leading provider of highly skilled tech talents and allowing businesses to stay at the forefront of the tech industry.
An International Perspective
Latin America has become a major force in the global tech industry, with 156% more businesses wanting to hire in the region, particularly for software engineering roles. This quickly turned the region into a spotlight, prompting its governments to introduce policies to empower the local tech talents to meet this demand.
Collaborations between universities, businesses and other stakeholders have helped stimulate interest in developer jobs. For example, the city of São Paulo recently launched a training collaboration with Amazon Web Services to teach interested parties about any of the four training options: cloud computing, cloud practitioner, digital marketing/metaverse and an introduction to programming.
It is a reality that businesses in the U.S. and Canada have faced a talent shortage, which now can be reduced by the availability of local tech talent. On the other hand, in Latin America, the growth of highly specialized developers, coupled with the cost-effectiveness and flexibility offered, make it an attractive option for companies during recession times.
When the future is uncertain, it might be a good idea to move to a nearby country with a growing number of experienced tech workers, similar time zones, fewer language barriers and similar cultural norms. And when neither quality nor proficiency is a concern, the cost-to-benefit ratio becomes very positive for businesses considering nearshore outsourcing.
In numbers, a survey on global outsourcing conducted by Deloitte found that 87% of IT companies were considering nearshore outsourcing in order to reduce costs. This may help to explain why analysts predict that the global market for outsourcing will increase by $40.16 billion between now and 2025.
Future Opportunities And Threats
Nearshore outsourcing is becoming increasingly popular due to its ability to reduce long supply chains and bring production closer to end consumers. For digital initiatives, this trend is particularly straightforward to implement, allowing companies to work remotely with tech talent from overseas without the complications of offshore countries.
But for those questioning whether outsourcing to Latin America is right for their organization, please consider the following items before you get started.
- Define the right partner for running your LATAM operation. There are reliable nearshore companies that have already been operating and offering tech talent for decades in a staff augmentation model, helping to mitigate the gap in the market. Understand their background and clients, along with the satisfaction and turnover of their current workforce.
- Participate in the vetting process for selecting candidates. Understanding how the partner selects the professionals is instrumental once they will do that hard part of the work for you. Also, always interview a prospective candidate yourself to double-check—this way, you'll be certain that only the right people join your team.
- Don't only pay attention to the technical things. Your partner should possess the proper understanding of your company's needs to find the right people within their talent pool. Besides that, they need to also be able to offer you a view of the cultural and behavioral/communication capabilities of the people who could help with your project. Great people equal great partnerships.
- Identify your needs and goals. Have a clear vision of your project and determine what type of tech talent you need (i.e., what are the mandatory skills a candidate should possess?). For example, you can start adding one person or a dedicated team for a specific need. For both cases, different needs and different solutions can be provided for you.
- Consider the necessary infrastructure. Define how this partnership will work in terms of structure, access and how you will conduct the daily exchanges between the partner and your team. Things like shipping a computer from one place to another can be a really difficult task that can delay the start of the partnership, so check if your partner knows how to do it.
Taking these points into account can help you avoid potential issues and take advantage of the positive impact of preparing your business for the best combination of quality, top-tech talents, cultural proximity, time-zone alignments that Latin America provides.
Addition added by Truelogic and not a part of original Forbes publication. 03/14/24
FAQs: Nearshoring Tech Talent In Latin America
What are the specific skills and experience that Latin American tech talent has that are in high demand?
Many tech professionals in Latam have niche experience in web and mobile development, cybersecurity, data science, AI and Machine learning, blockchain, and cloud computing, in addition to newer and older programming languages and development methodologies.
How does the quality of tech talent in Latin America compare to other regions, such as India or Eastern Europe?
Many countries in Latin America have taken a positive step in the education and training of its communities in the fields of science and technology. Latam is home to a highly diverse educated tech workforce and home to 26 tech unicorns.
With a high English proficiency, adaptability to markets, and a collaborative approach to innovation across the region, it is becoming the preferred region for IT and competition This attributes greatly improve the quality of the many solutions that have come out nearshore partnerships.
What are the challenges of outsourcing tech work to Latin America, and how can these challenges be mitigated?
Things such as legal and regulatory compliance and intellectual property are concerns and challenges that many businesses may have when considering a nearshore partner. However, partnering with a talent provider that prioritizes security and data privacy will give you a greater piece of mind that your information and the information of your customers are in safe hands
