How are U.S.-based tech companies benefiting from nearshoring software development to Mexico?

Digitization has characterized the world for so many years now, with most tasks or processes being automated. A pandemic like Covid-19 accelerated this move, making tech talent more sought after and remotely. This competitive market has led to some negative impacts, including an increase in wages for tech companies looking to hire the best talent.

However, it is essential to note that nearshore onboarding can remove some bottlenecks while providing a larger talent pool. 

How are U.S.-based tech companies benefiting from nearshoring software development to Mexico?

An extensive pool of world-class technical talent

Mexico can bridge the U.S.'s tech talent gap because of its large talent pool. When outsourcing IT, finding people with the skills you need can be challenging. It's better to have a large talent pool if you need talent quickly.

More people have access to resources and tools for enhancing skills due to recent improvements in infrastructure and education by the Mexican government. From 2006 to 2012, the Mexican government opened 120 tuition-free specialist technology universities to address its technology talent shortage. Every year, over 110,000 engineers graduate in Mexico.

Labor Efficiency

Labor costs primarily influence every company's budget. As a result, finding a way to reduce these costs ensures that more money can be spent on business development and expansion. It has been proven that nearshoring software development to Mexico can save companies money without compromising quality.

There are four levels of software developers: Proficient, Mid-level, Senior, and Expert. Generally, software developers are paid more based on their experience. No matter what, the average salary of a remote software developer from Mexico is significantly lower than that of a developer from the United States.

For instance, after interviewing over 7,000 engineers in Mexico utilizing the industry-first proprietary AI-driven Remote Dev Teams Management system, the average salary for a mid-level or intermediate software developer or engineer is about $3,000 per month in Mexico. 

Similarly, skilled individuals earn $9,000 per month in the U.S.

You can save over 79,000 USD annually by nearshoring software development to Mexico through an established company! While still obtaining quality services, labor costs can be reduced. Due to these factors, companies are attracted to Mexico's nearshore opportunities due to its low labor costs.

Culture and language alignment

Having a long border, Mexico and the U.S. have merged their cultures. This reduces the chance of common cultural clashes when software development teams from diverse cultures work together. Due to this shared cultural understanding, misunderstandings can be minimized, and the team to work cohesively together.

It is also challenging to hire remote workers due to language barriers. Even though Spanish and English are the official languages of the two countries, most people speak both fluently. Software development can be simplified, delays can be reduced, and communication can be improved.

Conclusions

In the coming years, the recruitment and retention of nearshore teams driven by AI decision-making technologies will undergo a complete transformation as more U.S companies take advantage of remote software engineering and outsourcing. It will allow U.S. tech companies to take advantage of Mexico's growing tech talent pool.

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