Six Reasons to Consider Nearshoring Tech Talent in 2024
Gartner estimates that worldwide IT spending will increase 8% in 2024. The industry analyst firm cites investments in cloud, cybersecurity, AI, and automation as key drivers of that growth. When it comes to tech talent, demand continues to outstrip supply, especially in those areas. By 2030, experts estimate that the United States could lose out on $162 billion worth of revenue annually unless it finds more high-tech workers.
Businesses are feeling the pinch. An MIT survey of executives about their experience recruiting IT employees reveals that in the face of ongoing staffing shortages, finding and retaining IT and tech talent is very challenging. Organizations that successfully attract such talent will rise above the rest. In this climate, businesses are getting creative about finding and retaining the best tech talent.
Nearshoring Supercharges Your Tech Talent Acquisition Program
To benefit from outsourcing while avoiding its disadvantages, U.S. businesses are turning to tech talent that is closer to home –– nearshoring –– as a strategy for finding workers with the right skill sets at the right costs. Latin America, according to Deloitte, is the up-and-coming region for nearshoring talent today. The region offers business and technology talent, enhanced infrastructure, and the benefit of substantial time zone and cultural overlap with North America, making it ideal for same-time-zone operations.
With Latin America becoming a hotbed for great tech talent, nearshoring could be a key to unlocking competitive advantages at home. In this blog, we’ll explore six crucial factors driving companies to consider nearshoring tech talent in 2024.
1. Nearshoring Drives Significant Cost Savings
Wages for U.S. tech workers have risen sharply since 2021, with some roles seeing salary increases of more than 15% during that time. To offset this upward wage pressure, U.S. organizations are looking south of the border to fill roles such as application developer and software engineer.
By outsourcing software development jobs to nearshore workers throughout Latin America, companies are finding highly qualified talent at lower wages.
Cost Savings of Almost 50%: Mojo Trek clients who pursue nearshoring see a 48% labor cost reduction across the board.
2. Time Zones are Similar Nearshore vs. Offshore
Nearshoring provides a distinct time zone advantage, with many Latin American cities operating within an hour or two of U.S. locations. This means that teams can communicate and collaborate in real-time more easily and frequently, and communication challenges and delays are minimized. Importantly, this leads to faster turnaround times, improved efficiencies, and better client service.
3. Latin America has Invested Significantly in STEM Education
Latin America has made significant investments in Science, Technology, Engineering, and Mathematics (STEM) education. According to UNESCO, when it comes to STEM graduates as a percentage of all higher education graduates, Mexico is at 25.8%, Colombia 23.9%, Chile 21.4%, and Brazil 17.5%. Also driving Latin American STEM education is a surge in venture capital investments. In 2021, venture and tech growth investments in the region rose to almost $20 billion, triple that of previous years, making it the fastest-growing region in the world for venture funding.
As the demand for skilled tech professionals continues to rise, Latin America’s commitment to producing a highly educated and skilled workforce makes it an attractive destination for companies seeking skilled technology and engineering talent.
4. Cultures are Similar Across the Americas
Cultural alignment is essential for successful collaboration. Shared values, work ethics, and business practices drive seamless and effective communication among teams. In addition to their investments in science and technology, Latin American countries share a strong tradition of entrepreneurship with the United States. Workers are driven, adaptable and always find a way to get things done. These similar cultural traits support a positive working environment, reduce potential conflict, and enhance overall productivity.
Additionally, U.S. tech companies have outsourced to Latin America for more than a decade. Amazon, Apple, and PayPal have worked with IT talent in LatAm since 2010. As a result, there is a robust tech workforce in LatAm that understands the pace, culture, and expectations of U.S. companies.
5. Language Differences are Not an Issue
Successful project management and teamwork rely on effective communication. In academics throughout Latin America, English proficiency is becoming increasingly necessary. With language barriers few and far between in the region, communications are likely to be seamless, reducing the risk of misunderstandings and promoting more productive working relationships among teams.
6. Better Retention
Employee retention, especially in tech, is a significant concern among business leaders. With nearshoring, employers can offer talent attractive opportunities closer to home. This can lead to higher retention rates, as employees appreciate the chance to work on exciting projects without the need for extensive relocations.
Moreover, with similar cultures and overlapping time zones, workers feel more connected to their organizations – part of the team. This contributes to higher employee satisfaction and higher retention.
Nearshoring retention of 100%: Over the last 18 months, Mojo Trek’s Fortune 500 client who pursued a nearshoring strategy has enjoyed 100% retention.
Nearshoring tech talent in 2024 delivers a competitive advantage. It offers a strategic approach to meet the demands of a rapidly evolving business landscape and hiring challenges. From cost savings and streamlined communication to a rich pool of skilled talent and cultural alignment, the benefits of nearshoring are vast.
To learn more about how easily you can nearshore your tech talent, please reach out to us below.