Jens Erik Gould: Companies have traditionally looked to offshore for their IT needs, particularly India. Now, more are looking to nearshore as well. We typically take nearshore to mean anywhere in Latin America. Some people will be a little more strict about it and say it’s just Mexico or Central America and Mexico, but we would also include South America.
There are several reasons more companies are turning to nearshore solutions, and time zone is a huge one. If you want to work with developers and engineers outside the U.S. but who work on U.S. time zones, nearshore is the way to do that.
South America, Mexico, and the rest of Central America are all on or very close to U.S. time zones. And that makes a big difference because when you’re working with Asia, or even Eastern Europe, people are often working when you’re off or sleeping.
If you have needs that are simply deliverables that can be done while we’re asleep in the U.S., and they can be ready when we wake up, then that’s fine. But a lot of times, that’s not the case. Many times, you want developers and software engineers to integrate into your U.S. teams and to be overseen in real-time by tech leads in the U.S. When that’s the case, you’re going to want your team to be working on the same time zone. Latin America provides that option.
Another reason is cultural affinity. In Latin America, and particularly in Mexico, developers and IT engineers tend to have a cultural understanding of the U.S. that you don’t always find in the rest of the world.
In Mexico, you have many professionals who travel to the U.S. often, have lived in the U.S., or even partly grown up in the U.S. Our recruiting teams will notice on resumes that candidates attended an American high school or college, and that’s always a sign that they really understand the U.S.
Why is this important?
Well, when you’re working with a team that’s U.S.-based, you need to have chemistry on that team, and you need people to work well together. If nearshore consultants understand how things are done in the U.S., that’s more likely to happen.
Also, this can lead to better relationship building. Not everything is about work. Sometimes, you’re on a video call just chatting and getting to know somebody. For instance, if the software engineer you’re talking to in northern Mexico has a fantasy football team and follows the NFL, and the U.S. tech lead also likes football, you’ve got something to talk about there. That may not happen in another country in Asia.
That may seem a trivial example, but it really does make a difference.
Educational levels are quite high among nearshore talent. If you take a country like Mexico, there are very good technical universities that prepare their students and graduates very well. Those graduates often go to work for multinational companies. They have a very high level of knowledge, they’re quick learners, they’re hard-working, and they have creative talents that can really make a positive impact on a team.
This can be very helpful from an operational standpoint. It's just easier to scale up and down with a nearshore outsourcing firm than when you're hiring in-house employees in the U.S. That's an advantage if you are unsure exactly what your budget needs will be or how your projects will progress.
I’d also note that nearshore provides advantages given the rise of AI and machine learning. There's great machine learning and data science talent in Latin America, and this is an area where there’s a talent shortage in the U.S.
It is less expensive than in the U.S. to engage with developers, software engineers, and IT specialists in Latin America. Costs vary by country, and you will still often find less expensive talent in Asia. But it’s relatively comparable, which means the savings are significant compared to the U.S.
Jens Erik Gould: Primarily for all the reasons I just mentioned. Another reason is that in the U.S., you had a slowdown and layoffs last year in the tech sector. That outlook appears to be improving, but you are still seeing tech companies big and small making more cuts.
In fact, this may become a longer-term strategy that tech companies are paying more attention to budget than they ever have before.
How does this relate to nearshoring?
Well, tech companies still need developers and software engineers. They always will; it’s their core business. So, if a company has reduced the number of in-house positions, that kind of reorganization can open up more demand for project-based positions or outsourced positions — whether U.S. or offshore.
Also, I’d point out that if you use an outsourcing company, like Amalga Group, they take care of the back office administrative activities that come with hiring. For example, payroll costs, administering benefits, drafting contracts, taxes and compliance. Yet the engineers still integrate into your team as if they were full-time employees. That saves a lot of costs, and allows you to focus on your core business.
Jens Erik Gould: Nearshore outsourcing is a win-win for everybody. As we discussed, nearshore is a win for U.S. companies. But it’s also a win for the engineers themselves.
Engineers in Latin America usually earn more working for a U.S. company than working for a local one, which improves their earning power. There’s also the opportunity for career development and increased learning because they’re working with U.S. teams at the forefront of their industries, and this helps them progress even further in their careers.
Jens Erik Gould is the Founder & CEO of Amalga Group, a Texas-based nearshore outsourcing company specializing in IT, software engineering, and contact center staffing. Gould’s dedication to offering efficient staffing solutions, backed by a team of professionals from the U.S. and Latin America, helps U.S. companies overcome talent challenges and streamline operations, all while maintaining the highest quality standards.
Gould was also an accomplished business, politics, and energy reporter with extensive experience working for prominent media outlets like Bloomberg News, The New York Times, and TIME Magazine. He started his career covering Hugo Chavez and the Venezuelan oil industry, later becoming a correspondent in Mexico City. Gould’s journalism career earned him many accolades, including two grants from the Pulitzer Center.
Gould has also worked in the financial sector for firms such as Apollo Global Management. Gould’s career, marked by a commitment to excellence and innovative solutions, reflects his dedication to making a positive impact on organizations and communities.
Learn more about the benefits of nearshoring with our nearshore vs onshore salary cost comparison guide. We break it down by the most sought-after jobs in software, tech, customer service, accounting, and legal support. There are many reasons to outsource—the top being cost, so we make it easy to see how nearshore impacts the bottom line.