Learn about the advantages of nearshoring IT Teams from Latin America and why Canadian and American companies should consider it as an effective strategy for IT development.
The Financial Benefits of Nearshoring IT Teams from Latin America
What is Nearshoring and Why Should Canadian and American Companies Consider It?
Nearshoring, a form of outsourcing, refers to contracting services or expertise from neighbouring countries. In the IT industry, this involves hiring software developers and IT specialists from geographically close nations. Latin American countries have emerged as prominent nearshoring destinations for Canadian and American companies.
Overcoming Hesitations: Why Some Companies Are Reluctant to Embrace Nearshoring Fully
Despite the numerous benefits, some companies hesitate due to factors like awareness gaps, talent quality misconceptions, and communication concerns.
Advantages of Nearshoring IT Teams
1. Cost-effectiveness:
Nearshoring offers significant cost savings. Labour costs in Latin America are notably lower than in Canada and the United States, enabling highly skilled IT hires within budget.
2. Access to a vast talent pool:
Latin America’s skilled IT experts and software developers hold degrees in relevant fields. Canadian and American companies can find specialists with diverse skills.
3. Time zone advantage:
Latin America’s time zone overlap with North America facilitates real-time collaboration, smoother project management, quicker issue resolution, and faster turnaround times.
4. Language proficiency and cultural affinity:
Latin American IT professionals’ English proficiency and cultural alignment ease communication and integration.
5. Reduced travel costs:
Nearshoring to Latin America reduces travel expenses for on-site meetings and team-building activities, benefiting small and medium-sized enterprises (SMEs).
Calculating Cost Savings: A Comparison
Hiring IT professionals from Latin America can lead to substantial cost savings. For instance, hiring an IT expert in North America can cost between US$110,000.00 to US$150,000.00 per year. In contrast, in Latin America, equally qualified experts cost approximately US$66,000.00 to US$90,000.00 per year.
Illustrating Savings with an Example
Consider a 10-member Guidewire team:
- North America cost: US$1,100,000.00 to US$1,500,000.00
- Latin America cost: US$660,000.00 to US$900,000.00
Savings: US$440,000.00 to US$600,000.00 annually.
Scaling Up the Savings
For a 5-member Guidewire team: Savings of US$440,000.00 to US$600,000.00 per year. For a 15-member Guidewire team: Savings of US$1,320,000.00 to US$1,800,000.00 per year.
Embrace nearshoring to optimize budgets, enhance competitiveness, and redirect savings toward growth and innovation.
Join iBrain and start benefiting from nearshoring IT teams from Latin America today.
