With digital transformation initiatives firmly in the sights of CEOs, hiring software developers is getting harder especially due to talent shortages, constraints on skilled migration, career catfishing, quiet quitting, and the great reshuffling of tech talent from one company to another.
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Contact Us Today!In fact, the U.S. economy could stand to lose US$162 billion a year in revenue if companies can’t find the right tech talent.
High employee turnover coupled with the prevalent shortage of highly skilled developers has affected how CEOs and HR leaders approach their tech talent acquisition strategies. It is no longer necessary to have an office near the traditional tech hubs and cities to attract top-tier software developers. In today’s labor market, the winners will be companies that lean into remote hiring and take full advantage of the global talent marketplace. This shift towards distributed teams is leveling the playing field between developed and emerging countries and giving way to a surge in demand for Latin American technical talent.
This article seeks to uncover the motivations behind this strategic shift driving the growing trend of U.S.-based tech companies increasingly hiring Latin American developers. Whether you’re a U.S. business looking to scale your development team or a leader seeking to optimize your tech operations, this deep dive will provide valuable insights.
The Nearshoring Phenomenon
Nearshoring is the practice of sourcing or outsourcing talent from regions geographically close to a company’s home market, rather than opting for distant hubs in Asia and Eastern Europe, or more costly hubs in the U.S. By encouraging collaboration with countries like Uruguay, Mexico, Chile, Costa Rica, Colombia, Argentina, and Brazil, nearshoring creates jobs, fosters innovation and addresses tech talent shortages without the need for large-scale migration. In 2023 alone, over 2.2 million remote workers from Mexico, Brazil, and Argentina contributed to U.S. companies—all while staying in their home countries.
What makes nearshore software development attractive for U.S.-based enterprises, is its ability to bridge the gap between cost-effective developers and geographical proximity in this new era where companies are fully embracing the functionality of remote work, ensuring effective communication and planning. With advancements in video conferencing software and pre-employment screening software, we live in a time where it’s easier than ever to hire and trust nearshore developers in Latin America.
A Paradigm Shift in Talent Acquisition
The COVID-19 pandemic led to a notable change in how companies recognized the feasibility of operating with a remote workforce. Between 2019 and 2021, the number of people primarily working from home tripled from approximately 9 million people to 27.6 million people, according to a study from the U.S. Census Bureau.
The pandemic and resulting economic downturn also led to a significant shift in the health of the labor market. In 2023, following a multi-year rise in hiring, layoffs became a daily headline from some of the biggest names in tech including Amazon, Google, Microsoft, and Meta. Startups, too—even ones in seemingly booming sectors like AI and SaaS—began announcing personnel cuts. In the wake of the layoffs, the relationship between employees and employers shifted dramatically. Workers left their jobs in droves to find work that was a better fit with their values, leaving companies with a shortage of the talent they need to operate.
Both shifts accelerated the adoption of remote work, breaking geographic barriers and creating a global talent marketplace. All else being equal, many managers would prefer an in-person workforce to a remote one, as remote work can make it more difficult to collaborate, build company culture, and onboard new employees. But all else is not
equal: during the same period that remote work has gone mainstream, the labor market has become extraordinarily tight.
As a result, U.S.-based tech companies have set their sights firmly on Latin America to satisfy their tech talent needs. With the advantage of a shared time zone and the allure of cost-effective labor, the number of U.S. companies employing the services of IT staffing firms to recruit nearshore software developers from Latin America has been on a steady rise.
Nearshore IT staffing agencies such as Next Idea Tech, Deel, and Turing are among those connecting a thriving labor market in Latin America with cost-conscious tech employers in the U.S.
Part of the reason is clear: While the median salary for software developers in the U.S. is $120,000, the annual salary for full-time and contract-based software engineers in Latin America hovers around US$30,000. However, this figure can fluctuate greatly depending on skillset and seniority.
A Win-Win Proposition
The rise of nearshore software development provides mutual benefits for U.S. corporations and Latin American professionals.
This growing demand for Latin American developers has provided new career opportunities, especially for developers in rural areas or smaller cities where such prospects were once scarce. Software engineers in LATAM typically earn 60% more when working for U.S. companies compared to their domestic peers. They also gain access to cutting-edge technologies and training and bring their earnings back to local economies. Imagine a developer in a small Colombian town earning even just a fraction of a Silicon Valley salary—and then building a home, investing in a local business and boosting the local community.
Hiring nearshore developers from Latin America has also been equally advantageous for U.S.-based firms across various dimensions including budget efficiency and time to hire for building tech teams. Nearshore developers from Latin America can be, on average 30% – 75% more cost effective than local U.S. hires or remote hires within the United States. Placements on average take 1 – 2 weeks when working with an IT staffing agency.
For US businesses, this is a game-changer. Nearshoring doesn’t just fill talent gaps—it unlocks new markets and fosters meaningful global partnerships. For Latin American communities, it’s an opportunity to build thriving tech ecosystems that can sustain economic growth for generations.
Meeting the Escalating Demand
There is a growing demand for seamless, agile, and cost-effective IT solutions. Deloitte predicts the global tech industry will need 7.1 million more tech workers by 2034 to satisfy this demand. While Latin America may not churn out as many engineers annually as established IT outsourcing hubs like India, the region is proactively nurturing tech talent. Local universities and technical schools align education with industry requirements. Moreover, governments in the region are launching initiatives like Mexico’s National Digital Strategy and Brazil’s Digital Transformation Strategy to support digital professionals.
The result? A thriving ecosystem of skilled software developers who seamlessly collaborate with U.S. teams.
Data suggests that in 2024, there were approximately 2,000,000 software developers in Latin America. Brazil had 760,000, Mexico had around 560,000 software developers, while Argentina totaled approximately 170,000.
These numbers have led to the rise of IT staffing firms specializing in remote Latin American tech talent.
As U.S. tech companies continue to harness the cost-efficiency, reduced latency, improved communication, and proximity of Latin American talent, they are not just satisfying their staffing needs; they are also championing a new generation of tech professionals in the region. The trend underscores the dynamic nature of the tech industry and the innovative strategies companies employ to maintain their competitiveness in a competitive market.
Looking to Hire Latin American Software Developers?
Of all the changes that have shaped and disrupted the U.S. tech workforce in the 2020s, nearshore software development has been among the most pervasive, and its impact is here to stay. However, leveraging Latin American tech talent and expertise requires deep visibility into the state of remote work and the region’s talent footprint. There is a substantial diversity among which skills can be found in specific LATAM countries and which talent pools offer the highest payoff.
Next Idea Tech is a one-stop solution for expanding your team with ready-to-hire talent. We are a remote-first, nearshore software outsourcing company looking to unlock untapped potential in Latin America by providing the most knowledgeable, experienced and highly trained nearshore software engineers, and thus allowing our clients to fill tech roles at very short notice (typically 1 – 2 weeks). Next Idea Tech is led by a team of veteran software engineers and IT professionals—we understand the developers mindset. By partnering with us you gain access to pre-vetted talent that’s ready to make a difference.
To streamline the recruitment process, we have built an exhaustive recruitment process, consisting of five stages to assess the candidate’s skill set, values, ethics, experience, etc.
We look for team members who:
- Possess a combination of soft and hard skills
- Share our company’s values and capabilities
- Can adapt to specific project requirements
Furthermore, we ensure that you’re matched up with talented individuals that fit your technical and cultural needs. This way, you can be sure that you’re getting professionals with a solid technical background and ideally, with previous experience working on US-based projects.
English language proficiency is a prerequisite for all our developers, more so because we primarily provide staff augmentation services to US companies. Therefore all engineers should be in a position to communicate effectively with their managers and peers.
From sourcing relevant talent using our AI enriched database, technical interviews to managing payroll and NDA compliance, Next Idea is a one-stop solution for expanding your team with ready-to-hire talent. We are led by a team of veteran software engineers and IT professionals – we understand the developers mindset. By partnering with us you will gain access to pre-vetted talent that’s ready to make a difference.
Contact us today to learn more about how Next Idea Tech can help scale your development teams and attract the best tech talent.
