Nearshore Software Development in Mexico: How to Benefit
Nearshore software development Mexico might not be the first thing that comes to mind when looking for dedicated developers. It is a new and rapidly growing outsourcing destination with many exciting opportunities.
Software development in Latin America is gaining more traction in terms of software development services, including Mexico, Brazil, Chile, and Argentina software development outsourcing. So what exactly makes nearshoring Mexico such a beneficial choice for international partners?
Let’s start with Mexico’s software development outsourcing market overview.
Overview of the Key Statistics
The high-technology exports in Mexico in 2021 equaled $74.93 billion. This number includes scientific instruments, R&D products, pharmaceuticals, computers, aerospace, and electrical machinery. The revenue the Mexican government can expect from IT services in 2023 might reach $12.54 billion.
The USA boasts the largest forecasted revenue generated by the IT sector in 2023 of $454.70 billion. However, its 2023-2028 growth rate of 6.70% will cede to the Mexican CAGR of 7.53% for the same period. Mexico software development outsourcing will have the largest revenue share, contributing $4.42 billion to the country’s economy.
Such growth in ICT (Information and Communications Technology) will happen due to further IT infrastructure development. Currently, the quantity of tech companies in Mexico is around 9,300, and the number of technical professionals exceeds 600,000. And these figures will only grow.
Why Nearshore Software Development in Mexico?
Nearshore software development Mexico gains popularity because this country accepts the challenge of digital transformation:
- World’s top tech companies open offices in Mexico. Technological giants like Amazon, IBM, Microsoft, Oracle, Cisco, Google, and SAP appear on Glassdoor‘s first page of job-offering IT companies based in Mexico City. The US IT boom motivated American companies and startups to nearshore Mexico for tech specialists. For instance, Google opened its R&D center in Mexico City almost 20 years ago. Now, it has a vibrant hub nearby Mexico City.
- Mexico has the world’s 14th-largest economy. The Gross Domestic Product (GDP) of Mexico, or its income from all the sales across the country, equaled $1,404.2 billion in 2022. This result was the 14th in the worldwide rating, while the USA’s GDP was the first with $25,462.7 billion. So the growing economic stability, evolving IT industry, and lower labor costs in Mexico attract US startup founders and owners of large corporations.
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Major IT Hubs in Mexico
- Mexico City
The presence of major tech corporations in the capital of Mexico proves it’s a viral IT hub with a large talent pool. The average software developer salary Mexico City is $3,271, so US and Canadian tech companies can nearshore IT specialists cost-effectively. The developed infrastructure and business-friendly environment attract hundreds of foreign businesses here, and LinkedIn shows around 554 software companies in Mexico City.
Over 50 top US brands have offices in the second-largest city in Mexico. Among them are Microsoft, IBM, Amazon, and Honeywell. Tijuana is only 20 miles away from San Diego. So California-based companies can leverage the absence of time and cultural differences when they nearshore technology Mexico. $3,038 is the approximate payroll of a software developer Tijuana, while LinkedIn reports around 54 tech entities in this region.
The fourth largest city in the country boasts an inviting ecosystem for startups and favorable conditions for tech students. With 36 business profiles of software development companies on LinkedIn, Puebla’s IT experts offer custom application, IoT, and AR/VR development. Companies that plan to nearshore Latin America can hire a tech expert for $1,878 per month.
Many US companies nearshore Guadalajara as it has a favorable ecosystem and proximity to Los Angeles and San Francisco. Guadalajara hosts plenty of innovation centers, startups, and 227 IT companies. That’s why US tech investors call this vibrant city the Silicon Valley of Mexico. And it’s no surprise that the average salary of a software developer here is around $4,487. The remuneration of a Python developer Guadalajara equals $5,502. The Android developer Guadalajara gets around $2,917, while $2,889 is the payroll of a front end developer Guadalajara.
Software outsourcing Mexico won’t exist without the Monterrey tech hub. This city is the home of one of Latin America’s best universities — Tecnologico de Monterrey. It prepares thousands of qualified technicians. Google develops its worldwide Startup Grind community in Monterrey. It educates, encourages, and unites tech talents globally. You’ll find 198 software development companies in Mexico, Monterrey, while the approximate cost of an IT engineer in Monterrey is $3,384.
Nearshore Software Development Mexico: Pros and Cons
Are you still considering hire software developers in Mexico? We’ve highlighted the key advantages and possible drawbacks to help you decide if this is the right destination.
Pros of Nearshoring to Mexico
- Reduced costs. Mexico software development outsourcing allows IT project owners to significantly cut payroll costs. For top tech experts based in Mexico City, Monterrey, Cancun, Guadalajara, Tijuana, etc., you’ll pay 2-3 times less than for similar roles in the US. In addition, Mexico has lower labor taxes, so nearshoring to this country is very cost-effective.
- Access to a large talent pool. Since Mexico does its best to meet the US demand for IT specialists, you’ll find many competent engineers here. Among them are encouraged STEM graduates, inspired mid-level software developers, and motivated, seasoned tech experts. These professionals continuously improve their skills to compete in the nearshore Mexico market.
- Minor time differences. The four time zones in Mexico coincide with the corresponding US states. The country’s most eastern and central parts have the GMT-6 zone. So 0 to several hours of time difference benefits companies that nearshore software development Mexico. Many US companies have 100% shared working hours with their remote Mexico-based teams.
- Proximity to the US and Canada. Software outsourcing Mexico lets US startups and SMBs have not only remote teams. They can meet with their teams pretty frequently. Traveling can take only several hours, but these visits can boost collaboration between managers and team members. Discussing goals and getting project updates can enhance your corporate culture.
- Stable economy. Mexico boasts one of the largest economies in the world. With a GDP of around $1,404.2 billion, it’s also second in Latin America after Brazil. During the past several years, the role of Mexican IT companies has become more significant. That’s because their input into E-government, cloud computing, and other tech services is valuable. So Mexico software development outsourcing is reliable.
Cons of Outstaffing in Mexico
- Possible issues with deadlines. Although Mexican software developers are skilled, creative, and open-minded, they can treat deadlines like estimated time frames. And though they share most of the values in the US tech environments, sometimes you’ll need to stress that following deadlines is imperative.
- More supervision may be needed. You’ll probably need to arrange team meetings and follow-ups more frequently with dedicated programmers in Mexico. This way, you’ll ensure meeting the project goals and sticking to the initial plan. Providing requirements in writing also might help.
- More paperwork is needed. Mexican legislation may require even US and Canadian entities to sign additional documents to hire technicians. For instance, to nearshore mobile app development in Mexico, you may need to partner with local outsourcing vendors or other shelter companies.
Alternative to Mexico Software Development Outsourcing
Some businesses might look for alternative destinations because Mexico isn’t comfortable for them in terms of location, price, or quality of labor. One of the rising outsourcing locations nowadays in Eastern Europe. It is much closer to the EU partners and can offer excellent development teams at reasonable prices.
One of the main outsourcing countries in Eastern Europe is Ukraine, as it has a booming IT market, great talent pool, and similar working ethics. Here are the main benefits of Ukraine for software development outsourcing:
- Exceptional skills. Ukrainian developers are known for their expertise and ability to tackle any project. They are 14th worldwide according to TopCoder (Mexico is 22).
- Ukrainian programmers have great English proficiency and similar work culture to Europe. They also are known for excellent STEM education, with about 16,000 graduates per year.
- Ukraine is located in Europe, making it very comfortable in terms of location and time difference for many international partners. It ensures direct communication between each SW development engineer and international companies, in-person meetings, and effective management.
- It is a world-recognized tech hub with 100 R&D centers from Forbes 500, and about 12,000 excellent IT companies.
Eastern Europe and Ukraine, in particular, is a great option, especially for the European partners. It is much closer in terms of location and cultural similarity than Mexico. And there is a great talent pool of experienced programmers to choose from.
For example, one of Mobilunity’s clients, Steffen Bernhardt, noted that So outsourcing to Ukraine gives you access to incredibly skilled developers:
Software Development Outsourcing Mexico vs. Ukraine: Salaries Comparison
Lowering costs for digital product development remains the main motivation for software outsourcing Mexico. However, with a few other benefits, the salaries of Ukrainian IT experts are also appealing. Below are the averaged monthly remunerations of top tech positions in Mexico and Ukraine.
Please note that Glassdoor reports payrolls as a composition of the base and additional pays. Rarely the extra compensation for some roles can exceed the basic salary. This impacts the final number and makes the comparison slightly inaccurate.
|Specialization||Experience||Ukraine — Monthly Salary||Mexico — Monthly Salary|
Mobilunity — an Experienced Ukrainian Vendor that Can Nearshore Mexico
In addition to access to 200,000 tech specialists in the Ukrainian market, our recruiters can nearshore technology Latin America. They’ll find experts who meet all the requirements for diverse project roles in Mexico City, Tijuana, Guadalajara, Monterrey, and other regions. Mobilunity team will use its advanced approaches and effective tactics to help you find Java, PHP, or Python developers in Mexico.
For instance, our recruiters can pre-screen 100+ CVs of technicians and interview 10+ most relevant applicants for the position of software developer Mexico City. So in several weeks, you’ll see 4-5 best-match candidates and be able to select those you find most suitable.
Our long-standing partners include XPLG (Israel), Paidy (Japan), ICUC Social (Canada), Esurance (Switzerland), and Zenchef (France). We know exactly how to find the perfect top-profile developers for any project or technology you are interested in. Whether it is a cloud migration, web or mobile app development, ERP solution, or cybersecurity – Ukrainian programmers are ready to help.
Mobilunity offers reasonable prices, transparent cooperation, and excellent results.
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Finding Candidates and Outstaffing Mexico and in Ukraine for You: 3 Cooperation Formats
Have you decided to find the best-match applicants, nearshore software development Latin America, or hire top Ukrainian programmers with us? Check the 3 service models we offer to select the one that fits your needs most.
- You contract a dedicated development team. You get a remote squad of tech engineers available full-time. Your development manager or product owner sets tasks and coordinates the team directly while we cover HR, helpdesk, and accounting issues. Our monthly invoices include net salaries, taxes, and operating expenses. And since these expenditures are lower in Ukraine, this model is a fair alternative to nearshore outsourcing Latin America.
- You get recruiting services for nearshore outsourcing Mexico. Our specialists have experience in finding top technicians in complex IT markets. For instance, in 2022, they hired an on-site UX designer for our client in Japan. So, rest assured we can do nearshore software outsourcing Mexico for you. We’ll check salary ranges and market capacity to make your job announcement stand out. We charge the recruiting fee once you onboard the candidate and sign the cooperation agreement.