Emerging Nearshore Software Development Trends to Watch in 2024

top nearshore development trends

In today’s software-driven world, staying ahead requires continuous innovation. Businesses need to adopt modern architectures and technologies, but building an in-house software development team for this purpose can be expensive and time-consuming. That’s why nearshore software development is emerging as a powerful tool in the arsenal of engineering leaders seeking to build high-performing software development teams amidst talent shortages and tight budgets.

Nearshore outsourcing offers a compelling alternative. It allows you to access a skilled talent pool at a competitive cost, while still benefiting from close geographic proximity that fosters better collaboration and communication. This is particularly valuable when compared to traditional offshore outsourcing.

The key to success lies in strategic planning and choosing the right nearshore partner. Leaders need to identify core functions that differentiate their business and outsource the rest. By partnering with a nearshore team that aligns with your values and goals, you can unlock a wealth of benefits such as:

Freeing up internal resources and streamlining development processes, leading to faster project completion and cost savings.
Tapping into a growing pool of skilled nearshore LatAm developers without the high costs of in-house recruitment.
Enhanced innovation by leveraging your nearshore partner’s expertise in emerging technologies to gain a competitive advantage.

The software development landscape is constantly evolving. To stay ahead of the curve, it’s crucial to stay informed about key trends. In this blog post, we’ll explore the top seven nearshore development trends IT decision-makers should be aware of in 2024 and beyond. Based on insights from industry leaders, the technology trends Next Idea Tech has identified not only reflect the current state of affairs, but also forecast transformative shifts that will define the coming years. We’re talking about everything from how nearshore outsourcing is growing to the shifts in Latin American hiring trends and how investments in disruptive technologies can empower software engineering teams to meet business objectives for productivity, sustainability and growth.

By understanding these trends and implementing the right strategies, you can ensure your nearshore partnership delivers high-quality, scalable software. This will not only reduce friction in your development process but also improve developer experience and boost overall productivity.

1. Latin America has established itself as an integral part of global tech workforces

The shocks of recent years, from the pandemic’s various impacts on the US labor market to supply chain disruptions exacerbated by the war in Ukraine, led to the emergence of Latin America as a significant source of software engineering talent in a convenient time zone just a reasonable plane hop away.

As of 2024, there are around 2 million software developers in LATAM. Heightened interest in nearshore offshoring destinations has led to Latin American nearshore developers playing a bigger role in shaping the technology we use every day, from mobile apps to computer software.

Tech giants like Google, Amazon, and Microsoft are taking notice. Their substantial investments in the region further solidify Latin America’s position as a key player in the global tech market. We can expect the demand for nearshore development in Latin America, particularly in established markets like Mexico, Costa Rica, Colombia, and Brazil, to remain strong in 2024 and beyond.

2. Skills gap will require companies to hire more nearshore developers

Developing and deploying custom software is a critical element of how many companies innovate, with top-performing organizations developing many of their most important software solutions in-house. However, IT executives continue to cite talent scarcity as one of the major challenges that plagues software development efforts and this directly impacts their ability to innovate. Companies are struggling to fill technical roles quickly and lack the know-how and processes to re-skill and upskill as needed. The skills gap is expected to continue getting more severe for most companies. The US Bureau of Labor Statistics predicts a staggering 25% growth in software development jobs between 2024 and 2032 – far exceeding the average for all occupations.

With the demand for tech talent reaching crisis proportions, companies are needing to think differently about their teams. To combat this, IT decision makers will need to embrace hiring nearshore software developers to improve how skills are acquired, and the use of online learning platforms, such as AI-based evaluations tools to help bridge skills gaps.

3. Integration of AI in nearshore software development

Artificial intelligence (AI) has emerged as a groundbreaking technology in transforming software development practices and meeting the rising demand for custom software. It’s not that Artificial intelligence is writing much software on its own—yet. But companies are finding AI-powered tools invaluable in helping professionals to design, develop, and deploy software faster, better, and cheaper.

With the AI market expected to grow at a staggering annual rate of 37.3% from 2024 to 2030, nearshore software development teams will increasingly incorporate AI-powered tools into their workflows. This integration will revolutionize software development methodologies and lead to more efficient, intelligent, and automated workflows

These tools can be employed in various tasks, such as code generation, test automation, error analysis, and performance improvements. Particularly, the collaboration between human engineers and GenAI (generative artificial intelligence) is expected to drive down the cost of nearshore software development, allowing engineers to focus on efficiency and problem-solving.

4. Growing demand for specialized talent

As the landscape of software development grows increasingly complex, 2024 will see a mounting requirement for specialized nearshore software development talent in specific domains. Businesses are dialed in on hiring for Cloud, DevOps, digital transformation, cyber security and privacy, development, AI, automation, system upgrades, and data integration and analytics.

Key Insights:

Java, Python, and AWS will be the most commonly requested skills for Backend Engineers.
For Data Engineers, Python is the most-requested skill, and AWS and SQL are tied for second. AWS is the top most-requested skill for DevOps Engineers.
For both Full Stack Engineers and Front End Engineers, React is the most commonly requested skill in 2024.
For Mobile Engineers, Swift, Kotlin, and React Native will be the most in-demand skills.
Employers seeking Cyber Security or Security Engineers will be seeking candidates skilled in Python, AWS, and Java.
For Site Reliability Engineers, AWS, Kubernetes, and Terraform are the key prerequisites.

5. Strong spending to service pent up demand

In a bullish economy, IT spending is looking resilient in 2024 with 88% of IT decision makers saying their tech budgets will either increase or remain the same over the next 12 months and 51% expecting an increase. However, there’s no denying that many digital transformation and modernization projects have been scaled back or shelved completely. It’s a trend across the private and public sector, enterprises and small businesses.

But as confidence returns, businesses will look to invest again in areas that give them a competitive advantage. For any modern organization, that means refreshing apps, platforms and digital services. It means that businesses and software development partners alike need to plan carefully for 2024, timing investments carefully and accounting for variations in industry sectors as some areas of the economy recover faster than others.

6. Increase in nearshore developer rates

With growing consensus that the US is in for a soft landing in 2024, we can expect the outsourcing market to absorb pent-up demand as shelved IT projects are given the green light.

Latin American nearshore software development partners are still operating in a tight labor market for skilled developers, and this is expected to contribute to a surge in wage pressures, as employers have a relatively smaller pool of applicants to choose from.

For companies leaning on nearshore software outsourcing partnerships for the specialized expertise and innovative development processes they can’t achieve with in-house developers, that means a 10-20% hike in hourly rates for certain developer roles in 2024.

7. Rise of low-code and no-code development

Moving forward, we anticipate Low-code apps to rapidly change the way software is conceptualized, developed and maintained. No-code and Low-code platforms provide shortcuts that help developers work quicker to build enterprise-class applications that incorporate complex business logic, automate workflow and integrate with existing systems. These platforms allow users to drag-and-drop blocks of pre-made code in a visual interface.

According to Gartner, the no-code/low-code platform market will grow almost 20% in 2024, with low-code application platforms specifically reaching almost $10 billion in revenue.

KPMG reports that 100% of enterprises that have put a low-code platform into place have reported a positive ROI.

Hire Nearshore Developers With Next Idea Tech’s IT Staff Augmentation

With too much software to build and not enough local software developers, tech startups and high growth companies are increasingly looking to tap into a global pool of developers to meet their talent needs. The easiest way to do this is to partner with nearshore tech staffing experts like Next Idea Tech to fill all your key roles.

Next Idea Tech offers the convenience of hiring IT professionals and software developers in Central and South America without the hassle of a complex recruitment process. We have a pool of experienced experts in various skills ready to start working on your project or staff augmentation needs right away. Get in touch with us to learn more about our services and how you can outsource top-tier experts.

Jeremiah