Nearshore Americas

Freelance Platforms Are Disrupting the Traditional Nearshore Model

Benito Abraham credits the freelance platform Upwork with giving him and his career a new lease of life. After 12 years in a senior role at a traditional tech outsourcing company, he made the switch to freelancing as a software engineer in April, just a month after the first case of Covid-19 was recorded in his home country Argentina.

Abraham is one of many Latin American developers pivoting to the freelance market through online platforms. In recent years, companies such as Upwork, Yandiki and PowerToFly have threatened to disrupt the traditional Nearshore model by directly connecting with tech talent in Latin America, while avoiding the costs associated with traditional hiring processes or real estate.

Software developers making the shift can increase their earnings and enjoy greater flexibility as freelancers. However, the potential still exists for freelance platforms to further broaden their appeal by offering greater opportunities to workers living outside of the U.S.

“[Upwork] has given me the opportunity to become independent with a minimal investment,” Abraham said. “In my 12 years at a traditional technology company, I saw the model was to hire cheap labor in developing countries and sell at market prices in first-world countries without adding value. On the other hand, working directly produces a mutual benefit between the client and the professional.”

Breaking the Barriers 

The pandemic has accelerated the surge in the freelance market. Layoffs, furloughs and salary cuts at traditional tech operators have forced workers to pivot. In May, Upwork reported a 50% increase in people joining the platform since the pandemic hit.

More gig workers should lead to greater competition – making it harder to secure work and decreasing hourly rates. But Abraham said the situation had quickly returned to normal after a temporary lull this year. That is because the overall demand for software engineers has increased as businesses digitize their operations and move in-person processes online.

One recent study produced by the software company SAP Fieldglass and the Oxford Economics institute found that 38% of managers had already recruited external workers through freelance platforms. The survey predicted that demand for freelancers was set to soar in the coming years.

The shift to remote work amid Covid-19 has also created new opportunities for freelancers in Latin America. By forcing teams to disperse, the pandemic has made executives realize they can work together without being in the same office. Almost overnight, old notions around location became irrelevant to the search for talent.

Silvina Moschini, co-founder and president of TransparentBusiness

One company which has benefitted from this sudden paradigm shift is TransparentBusiness, a remote team management enterprise. Founded by Silvina Moschini and Alex Konanykhin, the cloud-based platform offers real-time updates on the cost and status of tasks and projects. It also facilitates the hiring and payment of distributed workforces.

“Though we’ve been preaching the benefits of remote work for years, the pandemic turned out to be an accelerator of a major digital transformation that no one saw coming,” Moschini told Nearshore Americas. “Overnight, many team managers had to adapt their capabilities to a new operational reality, leaving behind old fashioned manners that designated space and time for work. 2020 brought a vast increase in new client queries, which raised our customer base 500% month to month.”

Moschini also runs Yandiki, a freelance talent pool, and SheWorks!, a platform connecting women with jobs. Born and raised in Argentina, Moschini believes remote work could bring the tech, data and AI revolutions to regions beyond the established hubs of Beijing and Silicon Valley.

“Our technology breaks the barriers that separate talent from opportunities,” Moschini said. “It creates a job market where we connect companies in search of talent with professionals from all around the world, through flexible and cloud opportunities.”

A New Era of Opportunity

Andrea Breanna, the founder and CEO of RebelMouse

According to Andrea Breanna, the founder and CEO of the content management system RebelMouse, both traditional Nearshore operators and freelance platforms are ignoring the potential to expand equal opportunities to software teams outside of the U.S. RebelMouse employs workers in more than 20 countries, including in Latin America. The company has no offices and does not believe in business travel.

“I have a propensity for this,” said Breanna, who previously worked as the chief technical officer for the media outlet Huffington Post. “I was born in Mexico City and I grew up in California with my Mexican side of the family still mostly in Mexico City. I’ve learned to be close to people who are far away since I was little.”

Breanna sees her collaborative work with developers in Latin America as much more than Nearshore staff augmentation.

“When [most companies] conduct a hiring process for a CSS developer in Brazil they interview for exactly and only that,” she told Nearshore Americas. “They look for people who will stay in that box, without ever thinking is she potentially an awesome executive? is she a good designer? I don’t see any companies who are willing to think that someone they hire in a different country might become part of the management team or could present to the board.”

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In contrast, RebelMouse is determined to offer equal opportunities to individuals living outside of the U.S. As well as being more ethical, the emphasis on equality has a positive impact on employee happiness and engagement.

The company works closely with PowerToFly, a recruiting platform that connects women to professional opportunities. RebelMouse recently appointed a woman in Serbia as chief creative officer.

Breanna said few other executives have begun to look beyond traditional – and limited – outsourcing relationships. However, she believes the widespread move to remote work could facilitate a shift in attitudes.

“I think it will take years before companies and hiring managers realize how limited the opportunities they were giving people were,” Breanna said. “But the stereotype of five guys and a whiteboard as the model of success is breaking apart. I see that as very positive and immediate … Every day more and more people are hiring this way.”

What does it take achieve great outcomes in Nearshore services? If you would like to share an exciting case study or news story drop me a note — Steve Woodman, Managing Editor

Stephen Woodman

Stephen Woodman is an independent journalist based in the Mexican city of Guadalajara. He has six years’ experience covering business and culture in Latin America. Stephen has been published in numerous international media outlets, including The Financial Times, BBC News and Reuters. To share story ideas, drop him a note here

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