Latin America has become the ideal spot for US IT companies to grow and it is now becoming the hub for nearshoring companies. The primary reason why most companies consider nearshore outsourcing is, it enables the companies to cut off their costs.
According to a global survey conducted in the year 2020 by Deloitte, about 87% of IT companies have considered nearshore outsourcing to lessen their expenses. Considering the inclination of business companies towards nearshoring, experts predict the global outsourcing market to reach $40.16 billion by the year 2025.
Although the decreased costs are a major reason for nearshore outsourcing, it is not the only reason US companies are turning towards Latin America. Below we have provided all the reasons that compel IT nearshoring in the USA.
Major Reasons For IT Nearshoring To Latin America
Number One: For Saving The Resources
As explained earlier, nearshoring to Latin America, provides the IT companies an array of advantages, among them the leading one is the lower resource cost.
Latin America is known for its knowledgeable resource teams that are available for IT firms at a much cheaper price as compared to the talent companies used to hire from distant regions.
It has helped the IT firms cut off the following expenses:
- The hiring cost of domestic teams and all the costs that incurred during hiring a talented team.
- It also has lessened the risk of a bad hire.
- The high domestic hourly charges have also been lessened.
- Companies now do not require spending millions on the office space.
Number Two: Similar Time Zones
Another reason why US IT companies are near shoring is that they had a lot of trouble offshoring to teams hailing from different countries like India, and China. As these Asian countries worked in different time zone, it was quite difficult for the IT firms to cope with it.
Even though offshoring was a cheaper option, IT companies can now work closely with Nearshoring companies without being worried about the logistic arrangements and non-aligned time zones.
Number Three: Nearshore Outsourcing Eliminates The Cultural Barriers
Another benefit that IT nearshoring provide is, the partnering companies will have similar cultural values, thus it becomes easier for the teams to cope with the organizational work structure.
Number Four: Availability Of Top-Notch IT Teams
Over time Latin America has become the hub for young and talented web developers, programmers, and data scientists. Alongside the unmatchable IT teams, Latin America is depicting a drastic technological development.
Considering the availability of exceptional IT teams accompanied by the latest technology; experts believe that the region will continue to produce the best IT professionals to cater the needs of the wheeling IT industry.
Number Five: Higher Return On Investment (ROI)
Near shoring can be really productive in terms of ROI. Although you may consider Offshoring a better option, it incurs increased costs in the longer run.
From lack of control to management issues and communication problems, Offshoring can be quite difficult to cope with.
On the flip side near shoring can eliminate issues like underperformance, communication gaps, and management, thus enabling the companies to increase their ROI.
Number Six: Aligned Legalities
The IT companies that work with their partnering companies located in the same regions will have similar legalities to follow. The team will also better understand the region’s IP laws and will have better knowledge of how to prevent from getting into legal troubles.
On the other side, for the Offshore IT teams, it will be difficult to navigate through the legalities of companies located in a different region.
Number Seven: The High-Quality Service
Having a majority of professional IT experts, companies get high-quality services in Latin America. The IT teams are highly professional and knowledgeable thus providing services for less without compromising on the quality.
So, Nearshore outsourcing can reduce costs while delivering high-quality services.
Alongside all the above benefits, nearshoring also allows flexibility of work thus helping the companies to get their desired results faster.
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The Takeaway
Latin America has become an attraction for IT companies as the region has an abundance of tech talent. It is also relatively cheaper than other predominant US cities including Los Angeles, San Francisco, and New York. Thus, a considerable number of IT companies are heading towards this future’s tech hub.
