10 Benefits of Nearshore Engineering Services
10 Benefits of Nearshore Engineering Services

Many businesses worldwide have started their digital transformation. As they continue to scale their technology operations, the demand for top-tier software engineers continues to grow. To fill the demand, due to the shortage of talent in the US, business leaders are increasingly looking to hire development teams outside of the US. Whether you're looking for web and mobile application development, digital products development, or any other specialized software engineering service, our team of experts are here to help. Here are just 10 of the many benefits of working nearshore:

1. Nearshore services costs less than onshore services.

While hiring talent in the US will cost you on average between $75-150/hr for full-time employees, or $125/hr+ for software development outsourcing, hiring a nearshore software development company will cost you on average between $35-85/hr. Did you know that the total cost per hour for a full-time engineer in the US can be as high as $105-200/hr? Working with a nearshore partner like Divelement allows you to stay on track with a more predicitble budget while scaling the team you need to achieve your company's objectives.

2. Nearshore software development offers a higher quality of service than offshore.

Working with a nearshore partner, like Divelement, you can rest assured that the level of work will be superior to working with offshore teams. You still want to be careful that you select a partner that is "Enterprise" level ready. Even while working with nearshore companies, you may find what is commonly referred to as "body shops". These companies focus on quantity instead of quality. They will typically have a much lower hourly rate than other competitors in the market, at the expense of hurting your product roadmap goals.

3. Nearshore teams work during concurrent 8-hour days with the US.

Working with nearshore developers out of Mexico and other countries in Latin America allows companies to work with developers that are in similar time zones as the US. In Mexico for example, the closest country to the US in Latin America, the time zones range Pacific to Eastern time zones. The majority of the country is in Central time zone throughout the year. This leads to a full day of interaction, as opposed to a couple of hours of overlap in the early morning or late evening, compared to offshore. Nearshore teams work collaboratively throughout the day, instead of handing off checklists and comments to incoming teams.

4. Cultural similarities between nearshore teams and U.S.-based teams lead to better communication and collaboration.

Outside of the workplace, the Mexican and American cultures share a lot of similarities. Both countries share a colonial past, a love for sports, food, and drink, as well as similarities in beliefs. Both countries also have similar forms of government, having a president as head of state, and similar terms. Due to these close cultural similarities, it is easier for teams to communicate and form bonds, and being geographically close, there is a lot of overlap in trade and commonality in world issues. The further away from the United States you hire the more likely you are to notice cultural differences between your in-house software engineers and your outsourcing partner's team. With these cultural differences, it may be hard for the teams to find common middle ground.

5. Nearshore service providers have a deep understanding of U.S.-business culture and practices.

Due to the proximity to the US, service providers typically have more experience working with US software development teams and understand the culture and standard practices better. At Divelement, two of our founders are from the US and have worked hard from day one to instill the same values at Divelement that are found in any modern US-based company. Additionally, engineers at nearshore companies typically have more exposure to Americans, due to their proximity to the US. Becasue of the close ties between the US and countries like Mexico, English proficiency is higher, and nearshore engineers are more aligned culturally than teams located further away.

6. Working with a nearshore company provides access to new talent pools.

In 2022, hiring good talent is becoming more difficult. We all hear buzz terms like "The Great Resignation" floating around, but when hiring software engineers, the problem is even more complex. The US Department of Labor estimates that at the end of 2020 there were over 1.2MM unfilled software engineering roles. If the number of job seekers doesn't increase, trying to fill all these roles in the US alone will become impossible.

In addition, when hiring you need professionals with the proper domain expertise who can develop and support the innovative solutions that your team is working on. If you are a leader from the US trying to hire talent from your own country, you may find the tech talent lacking industry expertise or simply doesn't add the value that you are looking for. Using a nearshore development center you have access to a new group of talent that could potentially have the industry expertise you are looking for.

7. Nearshore development teams have significantly lower attrition rates.

The average turnover rate in the US is about 22%, while the average turnover rate in Mexico is about 15%. This is on average about the same as you will find in other Latin American countries. Lower turnover leads to less churn on your company's project, which leads to less time for training, and more time for engineers to focus on the tasks at hand. Divelement is currently enjoying an average turnover of just 7%, which is well below (more than half) the nearshore average.

8. Nearshore software development results in higher customer satisfaction rates.

For all of the reasons listed in this article, and more, customer satisfaction with nearshore companies tends to be higher than with working with their offshore counterparts. The major drawbacks of working with offshore companies such as the lack of time zone compatibility, communication issues, and quality of work have led many companies to start moving their outsourced operations closer to home.

9. Using nearshore software developers helps businesses stay competitive in the global economy.

The world continues to move closer together and every year companies are tasked with trying to do less with more. To stay competitive in the global economy, companies must be cost-conscious. By using a nearshore development team, your company can make sure that you are controlling your costs. This allows you to keep your pricing competitive for your customers, allows you to potentially focus on more projects than your budget would have allowed if you used only onshore resources, and will also free you up to focus on completing quarterly goals. Using a nearshore company like Divelement also frees you up from the additional responsibilities of trying to expand or stand up an engineering team. Nearshore companies can handle recruiting, HR and retention so that you stay focused on your core responsibilities.

10. Nearshore teams are scalable and adaptable to your company's unique needs.

Outsourcing software development to Latin America allows your company the flexibility to scale up based on what your company needs. With the right partner, you can scale up additional team members, sometimes in as little as a few weeks, that consist of exactly the right fit for your company. Need to add a QA engineer? No problem, we'll get our People team on that right away, so you can stay focused on your core objectives, and we'll keep you updated and informed while we work to fill the position for you.

Nearshore software development services can offer a win-win situation to software development teams in the United States. By working with nearshore teams like Divelement, your company can get access to high-quality and cost-effective engineering services. Additionally, by working with a nearshore company, businesses can take advantage of all-day communication with their partner engineering team. This can help to minimize disruptions to business operations. Finally, nearshore teams are often more familiar with the culture and customs of the United States, which can make working with them a seamless experience. If you are interested in exploring nearshore software outsourcing in Latin America, get in touch with us to schedule a call.

Sources:

The Software Developer Shortage in the US and the Global Tech Talent Shortage in 2022

Accelerance 2022 Global Software Outsourcing Trends and Rates Guide

U.S. Bureau of Labor & Statistics Software Developers Occupational Outlook Handbook

Serviap Group Human Resources in Mexico

Inmercer North American Employee Turnover Trends and Effects


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