In recent years, the demand for tech talent has increased exponentially all over the globe. This is especially true during the pandemic, which has forced us to develop new digital skills and capabilities. According to the latest “Talent Shortage” report by ManpowerGroup, Inc, 49% of all global employers do not find the right people for their job postings. The same survey also found that IT roles are the sixth most-wanted positions on a global scale (this includes AI, cybersecurity, programmers and data scientists, among others).
While it is no secret that many US companies are sourcing their IT support team from Nearshore markets where they can run call centers, share service centers and others, the question of tech talent availability and costs remain pertinent.
According to “The Future of Jobs Report” published by the World Economic Forum, technology is going to create 97 million new jobs, while displacing another 85 million in the next five years. As with the Industrial Revolution of the 19th century, technology will not terminate jobs but will create new ones. According to LinkedIn, there were more than 44,000 job postings for tech roles and tech companies by the second week of November in Brazil alone. That clearly suggests the country is a hot destination if you are thinking of outsourcing IT roles. However, you might want to adopt a conservative approach, as competition for the most-qualified candidates can be high. Furthermore, Brazilian GDP per capita is $10,400 per year, and direct foreign investment was 72 billion by 2019. If you are primarily looking to cut costs through outsourcing, you may find it difficult to do so.
Top Nearshore Destinations
Latin America, primarily due to its proximity to the US, is one of the hottest places for American companies to go, and there are plenty of big businesses running huge back-offices operations in the region. Amazon runs a Costa Rica operation involving more than 3,000 employees. Dell has a Panama operation mainly focused on software development and tech support, with around 2,000 employees.
With a total GDP of $36 billion as of 2019, Nicaragua has some of the lowest salaries in the region. You can find entry level tech support roles earning $10,500 a year. Of course, this presents other challenges like security; the availability of English and some others, and it will vary depending on seniority and on how specialized the role you are looking for is. If you are looking for somebody with really complex skills, you might not find them in the country at all.
Costa Rica has a bigger economy (GDP $60 billion as of 2019) and is commonly recognized as a great destination for tech companies. That dates back to the decision Intel made in 1996 to open a manufacturing plant there. It is likely that entry level tech support roles can be found at a wage of $13,500 a year, when according to Glassdoor the average salary in the United States is $32,500 – representing a huge improvement on expenses. However, when thinking about opening in Latin America, you should consider the tax arrangements in each country, which can vary wildly.
Skills Above Salaries
But it is not all about salaries, it is also about skills. A good question to ask yourself if you are considering opening abroad is how qualified is the local tech talent? Can I trust local technology schools?
According to the QS global ranking, the top universities to study computer science as an undergraduate in Latin America are located in Mexico; so some names you should be looking at when reading resumes are: University of Guadalajara, Tec Milenio, Autonomous University of Sinaloa and the Technology Institute of Sonora.
Since there is a strong presence of US companies in Mexico already, the best recommendation for finding out more about skills is to look for people who have already worked for international companies. That way, you will be sure they understand the philosophy and work style of US businesses. Of course, there are some global headhunters that can help you find the right people for your company.
Another thing to bear in mind is that research shows most millennials are not likely to stay in the same role for more than two years. By the age of 30, on average, they would have landed five to six jobs. That’s not necessarily a bad thing, it’s just the job market. So whether you are planning to use the Nearshore to cut costs, or for any other reason, be sure to have realistic expectations in order not to end up disappointed. Seek out advice and listen to local business leaders, who will offer the best insights into how the Nearshore works.