Before remote workers became mainstream, India was one of the traditional hiring hubs for companies looking for software developers. The tech hiring landscape is changing, and regions like Eastern Europe and Latin America have firmly established themselves with thriving tech industries with highly skilled developers.
According to a report by Deel, new hires in Latin America grew by 161% in the first half of 2022 compared to 2021, in which most have been tech workers. The reasons? Talent and costs.
Latin American countries are known to have an advanced English level and attractive time zones compatible with the U.S. But what are the true costs? What are the main benefits of hiring Latin American developers? What about the challenges?
Why Are Companies Outsourcing Software Developers in Latin America?
These are the main reasons why you should consider hiring Latin America software developers:
1) Time Zone Alignment
Having remote employees implies, depending on their location, that you have different time zones. This is a double-edged sword because although for some employees, this means they choose their working hours and have more flexibility, on the other hand, there are cases where meetings happen at 10 p.m.
One of the perks of hiring remote developers in Latin America (mostly if you’re based in the U.S.) is that the time zones aren’t so different.
If you are in California, for example, and hire a developer from Mumbai, there’s a 9.5-hour difference, whereas if you hire a developer from Buenos Aires, there’s only a 1-hour difference.
Why does this matter? Because if you want full-time remote employees, communication is a must, and having similar time zones makes this easier.
2) It’s Cost Effective
Tech salaries in the U.S. have a record of being too high in comparison to other countries, with the average of a mid-level developer ranging between $80,000 to $120,000. While in Latin America, because many countries have different currencies, employees benefit from being paid in U.S. dollars.
But how much does a developer cost in Latin America? The average salary is between $40,000 to $60,000.
3) Great English level
When you hire remotely, you need to review candidates’ hard skills and other aspects, like, for example, their native language.
Even if you hire the most talented remote developer, if they can’t speak English and you can’t speak their language, communication is not going to be possible.
According to the EF English Proficiency Index, “the Latin American business community is increasingly vocal in its demand for more English speakers, and, in response, a majority of the region’s countries have rolled out education reforms to teach English better and more widely’’.
The best countries in Latin America with a higher English level are:
- Argentina (High proficiency, score: 562)
- Costa Rica (Moderate proficiency, score: 536)
- Cuba (Moderate proficiency, score:535 )
- Paraguay (Moderate proficiency, score: 526 )
- Bolivia (Moderate proficiency, score:525)
- Chile (Moderate proficiency, score: 524)
- Honduras (Moderate proficiency, score: 522)
- Uruguay (Moderate proficiency, score: 521)
- El Salvador (Moderate proficiency, score: 519)
- Peru (Moderate proficiency, score: 517)
- Dominican Republic (Moderate proficiency, score: 514)
- Brazil (Moderate proficiency, score: 505)
- Guatemala (Moderate proficiency, score: 505)
4) Emerging Market
The digital landscape in Latin America is growing rapidly, with Brazil leading the way, followed by other countries such as Chile and Colombia, making this region a great destination for offshore services.
A recent N-iX market report that explored Latin America’s tech sector highlighted that there are 7 leading economies in the region: Colombia, Brazil, Mexico, Argentina, Uruguay, Costa Rica and Chile.
Here’s an overview of the leading LATAM tech markets:
Not only the English level has significantly increased, but so has the quality and quantity of talented tech employees in Latin America.
According to Stack Overflow, top users’ reputation is higher in Latin American Countries (Like Peru, Colombia, Chile, Argentina, and Brazil) than in India and China.
There is a growing programming talent pool in Latin America. Mainly because the education systems in many countries from this region have improved, cities such as Buenos Aires are filled with educated tech employees who might be the candidates you are looking for.
Mexican universities are currently producing computer science graduates at a rate almost on par with their American counterparts. Mexico and Brazil together boast a workforce of nearly three-quarters of a million technology specialists.
Which Latin American Countries Have The Best Developers?
To know more precisely which countries were the best in Latam (Latin America) regarding IT skills, we analyzed three different reports:
1. TopCoder Country Rankings
This test ranked 31 countries, of which 4 belonged to Latin America. These are the results for Latam (Latin America):
This test gathered 1.5 million developers from 50 countries. These are the results for Latam:
This report is based on 550+ assessments from 44 countries. These are the results for Latam:
According to these tests, the best countries to hire developers from in Latam are Brazil and Mexico. Followed by these ones, you can find Argentina, Chile, and Colombia.
5 Best Countries to Hire Developers in Latin America (And Its Costs)
Brazil stands out as Latin America’s tech powerhouse, hosting the region’s largest tech market. Key sectors like fintech, e-commerce, and mobile app development flourish here.
The ICT market is booming, with a projected 5% growth in 2023, nearing US$ 8 billion. Additionally, the country has experienced a remarkable 45% increase in investments during H1 2021, totaling US$ 5.2 billion across 339 rounds. June 2021 alone witnessed historic investments exceeding US$ 2 billion in over 63 rounds.
This thriving environment has drawn global companies seeking remote engineering talent, making Brazil a hotbed for collaboration.
Cost: The average hourly salary of a software developer in Brazil is between $42-60 USD.
As the second-largest tech market in Latin America, Mexico excels in software development, fintech, and e-commerce, standing 12th globally in innovation and 3rd in the Latin American and Caribbean region.
Ranked among the world’s 15 largest economies, Mexico secured the 11th spot in Kearney’s Global Services Location Index’s top 50 countries for IT services.
Mexico’s robust technological foundation is further fortified by government programs, tech parks, and substantial startup investments. With over 700,000 developers and 3 million STEM professionals recorded in 2020-2021, Mexico offers a vast reservoir of tech talent for businesses aiming to harness its expertise.
Cost: The average hourly salary of a software developer in Mexico is between $45-65 USD.
The Argentine Chamber of the Software Industry (CESSI) reports a consistent 50% growth in Argentine software engineers and a 36% increase in tech companies in recent years. This underscores the industry’s robust expansion, with a growing number of individuals choosing web development as their career path.
Moreover, Argentina achieved global recognition by ranking as the top country for software engineering skills worldwide in 2019, according to Coursera’s 2019 Global Skills Index.
The nation boasts seven universities listed among the world’s best, attesting to its commitment to nurturing talent.
In Coursera’s Global Skills Index Report, Argentina secured the 22nd spot globally for skills in data science, encompassing technologies like Python, SQL, R, TensorFlow, Cloud APIs, and NLP, among others.
Cost: The average hourly salary of a software developer in Argentina is between $48-65 USD.
Chile has emerged as a dynamic player in Latin America’s tech landscape, particularly in its capital, Santiago, which is recognized as a major technological hub.
The country’s vibrant startup culture and commitment to innovation have catapulted it to the forefront of the region. Notably, Chile holds the top spot for innovation in Latin America, as affirmed by the Global Innovation Index.
With a strong tech talent pool of nearly 61,000 professionals and a rapidly expanding global ICT market, Chile offers a compelling environment for businesses seeking tech innovation and talent in Latin America.
Cost: The average hourly salary of a software developer in Argentina is between $50-65 USD.
Colombia has emerged as one of Latin America’s premier outsourcing destinations in recent years. In 2021, it secured the third spot in the region, following Mexico and Brazil, in terms of IT market size, boasting a market worth $10.2 billion.
With ambitious goals, the Colombian Federation of IT and Software Industries aims to have software contribute to 5% of the country’s GDP by 2025. Major Colombian cities like Bogotá, Medellín, and Cali have cultivated vibrant startup ecosystems buoyed by government incentives, access to funding, and an expanding pool of highly skilled tech talent.
Colombia’s appeal as a business-friendly nation is underscored by its ranking as the fourth friendliest country to do business in Latin America, according to Doing Business 2018.
This favorable business environment, coupled with robust economic growth and a thriving tech scene, positions Colombia as an enticing destination for companies seeking to tap into a dynamic and expanding IT talent pool.
Cost: The average hourly salary of a software developer in Argentina is between $45-65 USD.
Things to Keep in Mind when Recruiting Tech Talent in LATAM
Backgrounds Will Look Different
When looking to hire developers from Latin America, one of the aspects to keep in mind is that developers’ engineering backgrounds might be different from their U.S. counterparts.
There are thousands of local universities and companies that you may never heard of. Additionally, it’s very common for professionals to kickstart their tech careers by doing courses, learning on the internet, or in other unconventional ways.
Also, resumes in Latin America are often different than U.S. ones. It’s common to add personal information, a picture and to list courses and certificates as course experience, instead of traditional university degrees.
You’ll Need to Diversify Your Payment Methods
Latin American countries have their own currency; only a few, like Ecuador, Panama and El Salvador, are dollarized. So, you need to keep in mind the exchange rate. Also, the fact that it’s a different currency can make it challenging in terms of payment methods.
For some U.S. companies paying from the bank can be the easiest way, but this can affect the amount of money received for the Latin American employees. Take Argentina, for example, which has an official exchange rate and the “blue” one, which is much higher. So if you pay them the official rate, they end up losing money.
For this, the easiest solution is to have different payment methods and use diverse platforms such as Wise, Payoneer, and Paypal.
Paperwork & Tax Laws
Hiring developers from Latin America involves doing some extra work for paperwork that includes tax documentation, worker benefits, and more.
While this may seem like a lot of work, it’s only a matter of getting familiar with local laws. Or, you can avoid all this and get the help of experts.
At DistantJob, besides matching you with your ideal candidate, we also handle all the HR tasks. We offer fully managed HR services tailored to your specific needs.
Maximize Your Hiring Efforts with DistantJob
Hiring top tech talent requires, besides the necessary skills for their role, to seek someone who:
- Speaks the same language as you do
- Likes your company’s culture
- Understands your processes
- Gets along with your team (among other aspects)
And while hiring skilled developers from Latin America provides many benefits, it still requires work and considering local laws, payments, and more.
At DistantJob, we focus that each candidate provided fulfills all your requirements, and besides helping you find, hire, and onboard, we also ensure you have a smooth HR experience.