How to hire software development team: Latin America edition

For many businesses, extending the engineering teams in Latin America is one of the most popular options to attract top engineers and develop quality products faster to satisfy market demand. 

According to the Deloitte Global Outsourcing Survey 2022, 75% of companies already receive their IT services from third-party providers. Since this trend is expected to grow, businesses are looking for the most affordable options to hire a software development team, and Latin America is becoming a target region.

Countries like Colombia, Brazil, Argentina, Mexico, Uruguay, Costa Rica, and Chile are becoming attractive destinations for extending tech teams and establishing development centers. Let's discuss why this region is so popular for nearshoring and offshoring and how to ensure you reap only the benefits of hiring engineers from Latin America.

Overview of the Latin America tech talent market

Businesses worldwide view Latin America as a destination for setting up nearshore or offshore development centers. Colombia, Brazil, Argentina, Mexico, Uruguay, Costa Rica, and Chile have a rapidly expanding tech talent pool, providing access to highly qualified specialists with less competition than North America.

It gives businesses several advantages: they can find cost-effective and efficient software development solutions to drive digitization efforts and streamline their staffing process. But that's not all.  

Here are a few promising stats and facts proving Latin America will solidify its position as one of the world's biggest outsourcing centers:

• Extensive government support of digital transformation initiatives and ICT education;
• The combined pool of nearly two million IT specialists;
• Same or similar time zone as Canada and the US East Coast;
• High global ranking regarding innovation and the ease of doing business (Kearney GSLI, Global Innovation Index).

Each Latin American country has its tech market features you should consider before hiring a software development team. Our 2023 Tech Industry in Latin America report is an excellent source for looking deeper into the state of tech in this region. 

This report assesses Latin American nations' tech and business landscape, including economic stability, government policies, infrastructure, innovation potential, and more. Knowing these aspects will help you decide where hiring the engineers would be most beneficial. But it's not the only secret ingredient to an effective staffing strategy.

There are a few options for hiring software developers from Latin America, each with advantages and disadvantages. Let's review them.

What options are most popular for hiring a software development team in Latin America?

When choosing the most cost-effective hiring strategies, the business should usually assess a few aspects of the hiring process, such as:

• Availability of recruiters, HR specialists, lawyers to ensure quality and legal compliance during recruiting, hiring, and contracting;
• Desired project start;
• Project budget;
• Required tech stack at every project stage.

These and other business-specific conditions will define the hiring approach. Let's review the most common ones.

Hire the developers yourself

Hiring offshore developers in Latin America directly is usually a strategy used by startups and small businesses founded by tech-savvy people. First, they know the tech skills they're looking for in candidates. Second, they may have scarce HR and recruiting resources to delegate this process, so they hire themselves. Here's why direct hiring may look beneficial.

Advantages of hiring developers directly 

• Full control over the whole hiring process. You're in charge of everything in between candidate search and onboarding. It gives you the advantage of choosing the candidates based on the criteria you consider most valuable for your tech position.
• Personal involvement during each interview step. It allows you to get to know the candidates better and choose those who would fit your business well.

However, hiring tech teams from Latin America directly has drawbacks, too. Here's why you should double-think before hiring a group of IT experts on your own.

Disadvantages of hiring developers directly 

• More time-consuming process compared to other options. You'll have to handle sourcing, interviewing, skill assessment, and communication with each selected candidate. According to the Josh Bersin Company research, hiring can average from 20 to 44 days per candidate. However, if we're talking about finding a developer with niche skills and expertise, it can take up to two months. 
• Lack of resources to access a larger talent pool. The Latin America software development talent pool is vast. So, if you lack a strong HR and recruiting team to source and hire qualified candidates, you won't be able to access all outsourcing benefits, such as time saving and streamlined workflows.
• Additional cost for testing developers' skills. If you don't have testing resources ready, you'll skip this step or spend extra time and money testing a candidate's tech skills. Option #1 may lead to a bad hire, and option #2 will cost extra time and money.
• Need to cover HR and legal paperwork and processes. Hiring directly also means dealing with HR and legal paperwork yourself. If not streamlined, this may lead to mistakes, miscalculations, and chaos. The latter will negatively impact the development process and may cause reputation damage.
• High cost of a bad hire. Hiring unsuitable people will usually entail financial and non-financial consequences. It includes wasted recruitment expenses, salaries, compensation, investment in training and development, re-recruitment costs. Moreover, it will lead to negative team dynamics, compromising the delivery schedule.

While having complete control over the hiring process is great, direct hiring may not suit every company because of its extensive list of disadvantages. So many businesses consider other options when hiring software development teams in Latin America, such as recruiting through agencies. Let's see why it may or may not be the case for you.

Use recruitment agency services

Hiring development teams via recruitment agencies may be a more suitable option for businesses than direct hiring. Here's why you may want to consider using recruitment agency services to hire a software development team from Latin America.

Advantages of using recruitment agency services  

• Shorter time-to-hire. The recruiting agencies have streamlined sourcing, recruiting, and hiring processes that decrease time-to-hire compared to direct hiring.
• Delegating HR processes and paperwork to the recruiting agency. With a recruiting agency, you don't have to spend time learning nuances of hiring processes and paperwork that would suit the business frameworks of different countries.
• Broader access to the talent pool, including passive candidates. Agencies can tap into a pool of passive candidates, potentially uncovering top talents unavailable through traditional job postings.
• Understanding features of the tech job market. Recruitment agencies often have industry-specific expertise and networks, leading to more targeted candidate searches, especially for niche roles.

Recruitment agency services are a viable option for small to medium businesses needing to staff their tech team fast. However, it has a few drawbacks you should factor in.

Disadvantages of using recruitment agency services 

• Limited involvement in the hiring process. The hiring outcome will depend on the agency's resources, talent pool reach, and the accuracy of your communication. If you fail to give a specific task and description of your ideal candidate, the hiring process will result in longer time-to-hire and higher costs.
• Additional cost for testing developers' skills. Not all agencies test their candidates' hard skills, relying mostly on their certifications and educational background. So, if you want your candidates to undergo additional tests, you should arrange and pay for it yourself.
• Dependency on recruiting agency workflows and processes. The hiring success depends on the agency's workflows and schedules, which you'll have little power to change. Moreover, the deviation from their processes may entail additional costs.
• Extra expenses for intermediary services. When you hire a software development team from Latin America, you should pay the tech team and the hiring agency. 
• Double cost of bad hire (agency + developers). If you hire unsuitable candidates through an agency, you waste the money you've paid the tech team and the agency. 

For many companies, using recruitment services may be suitable if they want to hire with minimum involvement in the hiring processes. However, it requires more resources and collaboration with the agency. Plus, it also means organizing the team's onboarding and designing workflows yourself.

If you'd like to hire developers from Latin America quickly and start the project immediately, it makes more sense to partner with outsourcing or outstaffing software development companies. Here's why.

Partner with outsourcing/outstaffing software companies

With a software development company, you get the most flexibility outsourcing can offer. For example, you may have a team of developers from different regions ready to start within 4-6 weeks. Plus, you can choose the cooperation model (extended team, managed team, custom software development) that fits your project needs and budget. But that's only part of the full list of benefits your business gets when hiring engineers from Latin America via a software development company like N-iX. So, what else should you expect?

Advantages of hiring developers from outsourcing/outstaffing software company

• Fastest time-to-hire for any cooperation model. We constantly expand our candidate pool and design interview processes that allow us to collaborate with the top engineers in the field. All we need to do is identify your project needs and we're ready to provide a team of developers with experience in similar projects.
• Access to a pre-vetted talent pool. By pre-selecting and testing the engineers, we save you the time and resources you'd have spent on finding the required candidates in any country of Latin America. With N-iX, you choose from the experienced engineers who already passed technical assignments and English tests.
• Deep knowledge of tech markets in various regions. Software development companies like N-iX often have hubs in various regions, allowing them to cater to various market needs and comply with data processing and legal requirements. For example, N-iX operates across Europe, the USA, and Latin America, providing you with skilled engineers in trendy and niche technologies.
• Full support with HR processes and paperwork. As an established company with a global market presence, we have tailored our workflows and paperwork to the requirements of different markets. It ensures your compliance with the tax and legal requirements of working with international contractors.
• Pool of professionals with niche skills. Software development companies usually have access to engineers with niche skills. It speeds up the hiring process and adds flexibility to every stage of the development process.
• Desired involvement in the development process. Every cooperation model presupposes various-level involvement and project management. With software development companies, you can choose the one that fits your current team and project needs.
• Team extension flexibility throughout the project. Companies like N-iX may provide you with experienced professionals to cover any skill gap at any project stage faster. This flexibility will help you maintain the desired development speed and allow cost-effective team extension.

Partnering with software development teams may be more costly than hiring developers yourself or via an agency. On the bright side, it provides more advantages and flexibility for the development process. Moreover, you can request technical consultation regarding your project and identify where you can optimize your resources before staffing your team.

To help you choose the best hiring option, we prepared a checklist of things to consider when creating effective hiring strategies and attracting Latin America software development talent.

Read more: Outsourcing to Latin America: benefits, destinations, market overview

Key things to factor in when you hire a software development team (Latin America)

Companies usually opt for outsourcing to decrease development costs, improve time-to-market, and broaden their global presence. Here's what you should consider when hiring a dedicated development team from any Latin American country to access these and other benefits.

Tech talent pool

Latin America has a talent pool of almost two million IT professionals, which makes it a top region to look for software teams with any tech expertise and skill levels. Access to this talent hub brings various benefits for a business looking for outsourcing or outstaffing options, such as:

1. Shorter time-to-hire;
2. Higher availability of engineers with specific skill sets or emerging/niche technologies within a chosen time zone;
3. More price points to compare and choose from;
4. Ability to scale your team at any project stage.

However, most of these advantages are available if you hire a software development team in Latin America from a company offering team extension services. Why? Because having access to a large talent pool requires additional resources to process applications, pre-select suitable candidates, conduct interviews, and run technical tests to ensure you hire the most suitable engineers. 

Almost invariably, businesses don't have extra time and money, so they skip some of these steps, which may have costly consequences. To ensure quality hiring, software development companies like N-iX standardize their recruitment processes and handpick every candidate. So, when you request an outsourced or outstaffed team, you will select from a pre-vetted pool of the most qualified engineers in the market.

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Project complexity and required tech stack

The project complexity defines the team composition needed for successful delivery. If you don't have experience staffing the project team, your miscalculations may result in delays, increased costs, and a lower-quality product. That's why it's always better to consult with the software development company on whose skills your project needs and for how long to manage the budget more efficiently.

You should also consider the needed tech stack when hiring from other markets. For example, Latin American countries invest heavily in AI as they view this technology as critical to the region's socioeconomic transformation. So, if you have a project requiring solid AI skills, consider hiring a software development team from Latin American countries like Colombia, Argentina, Chile, Brazil, and Uruguay that have national AI strategies. Usually, the more developed the technology, the more skilled engineers you will find.

ICT education quality

When hiring software engineers from Latin America, you should consider the quality of Information and Communication Technology (ICT) studies. And for a few good reasons.

• ICT graduates usually possess enhanced skills and competence. ICT education quality expands engineering graduates' skills and competence in core technical areas and beyond. 
• ICT education focuses on developing learning flexibility. Engineers with a high-quality ICT education are proficient in current technologies and better equipped to adapt to and learn new technologies quickly.
• ICT education helps engineers develop strong analytical skills. Engineers with a high-quality ICT education often possess sharper problem-solving and critical thinking skills to analyze complex problems, identify innovative solutions, and make sound technical decisions.
• ICT education instills high coding standards. Strong ICT education encourages following the best practices in software development, making the graduates more likely to produce high-quality, maintainable, well-documented code.
• ICT programs prepare students for global competition and collaboration. It means they'll have a global perspective and an understanding of international industry standards and can perform in international and cross-functional teams.

The quality of ICT education in Latin America is improving annually as the region is transforming into a major hub for tech talents. It also fosters an increasing number of ICT graduates in Brazil, Colombia, Mexico, and Argentina. Moreover, the national development programs in Latin American countries focus on investing in STEM education to ensure the region has enough skilled professionals to attract overseas investment.

Read more: Top software development companies in Latin America: A comprehensive review

English knowledge

Speaking the same language is crucial for diverse teams to cooperate efficiently. That's why high English proficiency becomes a top requirement for companies hiring software development teams from Latin America. And because English is a second language to the software engineers from that region, businesses often overlook this destination to outsource. But they shouldn't.

According to the 2023 Education First report, Argentina is ranked #28 globally as a country with a high proficiency level of English, outscoring Hong Kong and Switzerland. Countries like Costa Rica, Chile, Peru, and Uruguay are reported to have moderate English proficiency.

In addition, many tech businesses in the region use English as their primary working language. The best part? If you hire a software development team from Latin America with a company like N-iX, you don't have to worry about the language barrier. We only collaborate with engineers who have an Intermediate or higher level of English and have passed our English tests. This way, we ensure you power your team with competent engineers.

Ease of doing business

Many businesses view hiring teams from other countries as a cost-effective staffing solution, and it's so if the hiring strategy has considered all other aspects of hiring overseas.

For example, when a company from Canada hires a software development team from Latin America, they will need to deal with a new business system. It usually includes new requirements for business transactions, tax handling, registration, and so on. And here comes the tricky part.

Without knowledge and experience in handling business overseas in a particular market, the pursuit of cutting development costs may become a surefire way to spend more. That's where partnering with software development companies like N-iX can help you reach the outsourcing benefits and avoid miscalculations.

When you partner with N-iX, you don't have to start from scratch and study other country's rules and regulations. With over two decades of global presence, we've designed cooperation workflows that free our clients from resource-consuming operational details while providing them full visibility and transparency into processes. This way, we ensure your business receives the most qualified IT specialists, complies with international and local regulations, and builds a solid foundation for further development.

Time zone

If you have augmented teams by engineers from Latin America or outsourced teams from this region, keeping them within the same time zone is better. This way, you'll streamline the communication across all teams, decrease the chance of delayed responses, and improve project management.

Cost

The cost of hiring software development engineers is influenced by several factors, including:

• Median software engineer salaries;
• Engineer's skills and experience;
• Required technologies;
• Team composition;
• Project duration and budget;
• Average cost of living in the country.

When outsourcing software development to external teams, businesses opt for the most cost-effective offers. That's where the Latin American market becomes very attractive.

For example, the average cost of living in Latin American countries is lower than in any U.S. state. According to Statista, Colombia has the lowest minimum monthly cost of living in the region, with $546/month. As NASDAQ reports, Kentucky has the lowest cost of living across the USA, with $2,275/month. These statistics hint at the cost savings your business can have if you hire a software development team from Latin America.

Cultural differences

Having teams from different cultures helps you diversify the workforce and bring new perspectives and ideas into your project. However, working with a team from a new region may be challenging, as with a different mindset comes a different work culture. And we get it–as a business, you want to benefit from hiring external teams, not regret.

Luckily, the tech vendors have a practice of tailoring their work culture based on the target market's general work culture. This way, the software development company attracts and hires skilled engineers who agree to comply with the accepted policies and regulations.

Infrastructure

When considering outsourcing destinations, it's essential to assess the region's infrastructure, including technology parks and connectivity quality. For example, broader adoption of the 5G network makes Brazil and Uruguay attractive destinations to outsource mobile development and hire engineers to work on IoT applications and smart city/manufactury/hospital technologies.

The infrastructure of Latin American countries is also suitable for frequent business trips or team fly-outs. All Latin American countries with highly developed tech landscapes have everything you need for comfortable business trips, including:

• Regional and international airports with connections to the most popular destinations in the USA and Canada;
• Hotels from international hotel chains;
• Business class transportation services;
• Diverse leisure activities and rich culture to explore.

Moreover, countries like Argentina, Colombia, Brazil, and Mexico often host tech-related conferences where you can meet business-savvy colleagues worldwide. 

How N-iX can help you hire top tech talents from Latin America

Alongside delivery locations in Europe and the USA, N-iX has an R&D center in Medellìn, Colombia. It allows us to provide team extension services in Latin America and help businesses augment their in-house teams with top-skilled IT professionals.

With over 2,200 software engineers and access to a vast talent pool, we can rapidly scale your team and accelerate your digital transformation. The best part? We handle the administrative processes and set up workflows that prevent paperwork burden and noncompliance. Contact N-iX, and let's discuss how your business may benefit from best nearshoring and outsourcing practices and expand to Latin America!

References

1. Seizing the opportunity: the future of AI in Latin America by The Economist Group
2. Global outsourcing survey 2022 by Deloitte
3. The world’s largest ranking of countries and regions by English skills by Education First
4. Cost of Living 2023: 10 States With The Lowest Monthly Expenses For Single Adults by Nasdaq