Nearshore Americas

Ranking the Six Leading IT Cities for Skilled Human Capital – Monterrey Rates Number One

As Latin America moves away from call center work into higher-end value added services, it’s increasingly difficult to train workers for complex IT positions. Buy-side companies prefer instead to go where the most talent is, and LATAM governments are catching on.  With each country promoting itself as having the most qualified labor pool, it’s often hard to know before you get on the ground which locations can meet your skilled labor needs, and which ones simply won’t pan out. We at Nearshore Americas decided to make things clearer by publishing our own ranking of the top Latin American cities for technical training and most available IT workforce.

What We Looked For

It’s important to note that while ranking the leading LATAM cities, we only considered technical training and the availability of skilled labor, and not other factors that make a sourcing destination. Some parameters we used to position our choices:

  • IT workforce size – The average skilled labor pool that companies can draw on. It’s important that numbers are high enough that firms are not competing for workers, thus driving up wages and attrition rates.
  • Educational system and skill level – Emphasizing not just quantity but quality, we looked at IT-specific programs in universities, the level of technical training in the workforce, and English proficiency of workers.
  • Annual IT graduate numbers – Scalability is always a concern in nearshore locations. How many new IT workers are made available to companies every year, and can they meet the demand?
  • Multinational presence – Several large players in a city may cause overcrowding and scarce resources, but could also lead to technology clusters and improved skills in the labor pool.
  • Challenges – City-specific challenges that we took into account when compiling the list.

The leading six LATAM cities for technical training and available human capital:

1) Monterrey, Mexico

When we talk about an outsourcing city with a US focus, Monterrey is the model. Considered one of the best places to do business in Latin America, the city of 4 million hosts an impressive array of companies – Accenture, ACS, Microsoft, Neoris, Infosys, Wipro, Softtek – to name a few. “Monterrey’s ITO industry is driven by the US market and this is largely due to its proximity to the US border”, says Alfredo Pacheco, CEO of MexicoIT. “There is much better cultural compatibility, and one of the highest concentrations of English speaking workers in the region”.

Monterrey is also a hub for IT-specific education and technical training. The Monterrey Institute of Technology (ITESM) is among the largest tech universities in Latin America with 33 campuses in cities throughout Mexico. Other prominent institutions are the Universidad Autónoma de Nuevo León and the Universidad de Monterrey, which have extensive IT and software development courses. A recent initiative of the city, the Innovation and Technology Transfer Institute (i2t2) aims to promote graduate IT and research programs to meet the workforce needs of businesses in the city. Pacheco also mentions the Mexico First program, a government IT education program ramping up the certification numbers in Java, PMP, Oracle, etc – in 2009 it handed out 9000 new IT certifications.

Monterrey’s labor pool is approximately 50,000, with 35,000 currently employed in the IT industry. Colleges graduate around 13,500 tech workers annually with expertise in IT services, software testing and systems integration. While these stats are very good, Softtek CEO Blanca Treviño told us in March that due to the large number of firms in Monterrey, they sometimes have to compete for skilled workers.

2) Santiago, Chile

We had reservations about ranking Santiago so high because of its small labor pool relative to the demand. But aggressive government programs to build up the IT graduate numbers, and an extremely skilled technical workforce make up for it. Santiago is not the place for large scale IT or BPO operations, but companies looking to provide high-value research or product development services will be happy here. One of the highest R&D spends per capita in Latin America has attracted firms looking for these specialized niche services – Oracle, Yahoo, Evalueserve, Equifax and JP Morgan all have R&D centers in Santiago, and they came for the IT talent available.

The educational system is more detailed and longer in duration than in most LATAM countries, and is the reason for Santiago’s qualified workforce. Although numbers are small (8,900 IT graduates annually), the city’s colleges are known for their excellence in new technologies. Government pressure to meet the growing needs of the outsourcing industry is also a factor. “Santiago has more than 10 universities, and the past decade has seen enrollment in technical education almost triple mainly due to government promotion of IT training”, says Lynn McNeal, Partner at TPI Latin America. A good example is its handling of Santiago’s low English proficiency – investment promotion agency CORFO institutionalized English in schools, and there has been a noticeable improvement in the numbers. Santiago’s IT-savvy workers will continue to hold significant interest in the US market.

3) Bogotá, Colombia

Colombia is moving beyond its call center specialty to focus more on technology and software. In a relatively short period, Bogotá has managed to transform itself into a capable ITO contender buoyed by a solid educational system. According to consulting firm Neo Advisory, “the city is home to over 107 higher education institutions that produce 67,000 graduates every year, of which 17,000 are technical graduates. The IT and BPO workforce in the city is currently at 50,000”. English is a definite weakness, and the government has implemented the Talk to the World initiative aiming to train bilingual 10,000 workers over five years, specifically for the IT sector.

High profile companies operating out of Bogota include TCS, HP Enterprise Services, Sitel and Unisys. Recent entries were Convergys and Teleperformance, both expected to increase their employee base in the thousands to focus on the US market. “Bogotá has one of the most flexible labor regimes in Latin America”, says Neo Advisory’s Global City Competitiveness Report 2009. “There is no risk of labor market saturation at present or in the future”.

4) Guadalajara, Mexico

Known as the Silicon Valley of Mexico, Guadalajara has a reputation as the main software producer in the country. There are about 200 IT companies operating out of the city including IBM, Dell and HP, some of which have employee bases of over thousand. We spoke to Enrique Cortes, Vice President of Dell Services for Latin America last month. “Guadalajara has the right balance between labor supply and labor demand”, he said. “My attrition rate is low compared to other cities”.

One distinct aspect of Guadalajara is its focus on high-end engineering services, in addition to ITO. Institutions like Universidad de Guadalajara and Universidad Panamericana graduate around 8000 tech workers annually, and work closely with the government to meet industry demands for skilled labor. This is a response to the small labor pool crisis that Guadalajara had a few years ago. “Indian companies like TCS and Infosys generated thousands of jobs, and for a time it pressed our workforce pool”, says Alfredo Pacheco of MexicoIT. “But we have now overcome it and are getting back to the right numbers”.

5) Córdoba, Argentina

With the highest per capita software university graduates in all of Latin America according to Neo Advisory, Cordoba  is quickly becoming a leading IT hub in the region. Technical universities produce 28,000 IT graduates each year, who work in multinationals like Intel, Motorola and Sykes which all have large development centers in the city. The high education level is through tuition-free national universities financed by the Ministry of Education. “Argentine locations receive highest marks on the TPI Education and Workforce dimension, due in part to the quality of its schools and the number of students enrolled in tertiary education”, says Lynn McNeal of TPI.

The IT labor pool in Córdoba is approximately 34,000 while the BPO pool is 37,000. The city is still developing its global ITO focus, but we see its technically trained labor pool as having tremendous potential.

6) São Paulo, Brazil

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With population 10.8 million, São Paulo is a contender for its sheer volume of workers (IT labor pool size of 225,000). Recently high costs and attrition rates have been issues, but firms are increasingly attracted to its large domestic IT scene. “It’s the most active outsourcing market in all of Latin America”, says McNeal. “Education is free at both public schools and universities, and many Brazilian IT professionals are well trained and have advanced degrees”. English ability continues to be a problem however, and language education is not accessible to all.

Smaller Brazilian cities like Curitiba and Campinas are more specialized in skilled IT work, but São Paulo made our list because of its scalability potential. There are many large providers like Accenture, Motorola, CPM Braxis, HCL Technologies, TCS and Capgemini, but complaints about labor supply have been few and far between. Even better, a new law allows IT companies to double their tax breaks for spending on training workers for skilled tech positions.

The fact that a sourcing operation is only as good as its employees has been obvious to companies for some time, but only recently have governments begun radically investing in their workforces.

Honorable Mentions


There were a few cities that surprised us in terms of a skilled workforce. Guatemala City and Montevideo are two examples. While the qualified labor is available and education systems have been improved, their industries are still developing and in our opinion cannot yet support specialized and scalable IT operations. Outsourcing staples like Buenos Aires and Mexico City were also not included in the list in favor of newer locations like Córdoba and Bogotá.

The fact that a sourcing operation is only as good as its employees has been obvious to companies for some time, but only recently have governments begun radically investing in their workforces. Some have been aggressive, implementing capacity-building programs and initiatives; others have been strategic, concentrating on particular locations or industries; while still others have failed to make any improvement in their labor pool.

Have opinions on our rankings? Post your comments below.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.


  • The above list seems more like a list of the most expensive and dangerous cities in Latin America.

  • Daniel – there is some truth to the expense aspect you mention.

    However as stated at the beginning of the article, the availability of skilled human capital was the only factor we considered, not wages or price, or even ease of doing business. I think you'll find that the above cities all have excellent technical capability in terms of labor pool.

  • I cannot speak about Argentina or Brazil, but Daniel is right about the city of Monterrey. Unfortunately, any Mexico location near the US border is more violent these days. By contrast, Guadalajara is one of the safest cities in all of Latin America.

  • "Monterrey’s labor pool is approximately 50,000, with 35,000 currently employed in the IT industry. Colleges graduate around 13,500 tech workers annually with expertise in IT"

    Hum… so the labor pool has no more than 3 years experience? Or the labor pool is scheduled to double in the next three years? Or the 13500 tech graduations is kind of wrong???

  • Leonardo – You're assuming that all 13,500 of those tech workers go on to be employed in the IT industry. As with any city, a tiny percentage of the "tech workers with expertise in IT" actually pursue programming or software development careers. An even smaller percentage pursue those careers in the cities in which they were educated, such as Monterrey. So dont worry, the IT labor pool is not going to double in the next three years!

    The purpose of mentioning that fact was to show that tech workers are available for IT companies in Monterrey.

  • Which are the Top 20 Training companies in South American region?

    Do you all agree with me that we should also publish the periodical rankings of the training companies country wise, region wise, etc ?