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There are many advantages U.S. companies can realize by outsourcing software development to Latin America. Here are some of the top reasons to consider Latin America for your outsourcing needs.
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Highly Educated & Skilled Talent
IT talent in Latin America is simply unrivaled in other parts of the world. The popular programmer resource site, Stack Overflow, has ranked the tech talent in Latin America much higher than in China and India. Countries such as Chile, Colombia, Peru, Brazil and Argentina all consistently rank near the top of software development sites that list outsourcing options for U.S.-based companies.
In the last 15 years, Internet usage has increased by more than 1,600% in Latin America. In fact, the rate for internet penetration in Latin America is 61%, compared to the global average of 45%. Businesses in the region are thriving, with many countries offering initiatives to develop talent, encourage innovation, and support business growth. This has led to a huge uptick in residents studying in IT-based fields and training in software development.
Startup incubators are also popping up all over Latin America to help spur development and advancement in IT fields. Startup Chile, for example, is an incubator that has helped launch more than 1,000 startups. There are many examples of innovative tech companies founded by Latin American tech entrepreneurs—like Rappi, CargoX, MercadoLibre, and more—showcasing the quality of talent that rivals U.S. innovation and skill.
Reduce Costs
U.S.-based companies can realize a significant cost reduction by outsourcing software development to Latin America compared to domestically. The average annual salary for software developers in Latin America is around $13,245. Compared to the $110k average salary for developers in the U.S., cost savings are immense.
While the costs of outsourcing to Latin America are much lower than in the U.S., they are typically slightly higher than some Asian countries. It’s possible that the cost of outsourcing software development to Latin America will be roughly 10% higher than it would be to an Asian country. That said, it’s not about a direct cost comparison—it’s about the value you get from outsourcing to Latin America.
Proximity to U.S.
One of the biggest advantages Latin America has over other IT popular outsourcing destinations like India and China is the close proximity to the United States. Most Latin American countries are in the same time zone as much of the U.S. Those that aren’t are only off by an hour or two.
Software development requires a lot of back-and-forth communication between the U.S.-based company and their outsourcing company. Being in similar time zones makes communication much easier, as there aren’t many adjustments that need to be made to the typical work day.
It’s also an advantage for U.S. executives to be able to travel in person to where their outsourced software developers are. Latin American countries are a much shorter distance from the U.S. than Asian countries, adding yet another benefit to the list.
Creativity & Innovation
Many Latin American countries have been emphasizing creativity and innovation, particularly when it comes to the IT sector. Business incubators are popping up everywhere in Latin America, and startup companies are thriving.
This innovative culture sparks creativity, which is a huge benefit for U.S. companies that outsource there. Software development is sometimes not as straightforward as other tasks, such as customer service. This makes creativity and innovation a highly-valued skill—which Latin American workers definitely have.
Cultural Alignment
Latin American countries live in Western societies. While there are certainly some cultural differences between the U.S. and Latin America, there are many similarities as well.
Having similar cultures helps in a number of ways. First, it helps with communication. Communication is about more than just speaking the same language. It’s about each side understanding where the other is coming from. Understanding cultural nuances is essential to ensure clear communication.
Additionally, similar cultures aid in having the software development match the style of U.S. companies. Latin American software developers are fully aware of the wants and needs of U.S.-based companies and how they operate—much more so than Asian in countries. Many times, Asian software developers will create products that need to be tweaked by U.S. companies because of the different approaches to the field. This is not usually the case when working with experienced developers in Latin America.
Expand Your Business with SERVIAP
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in South America and Latin America.
