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The Effective Strategy Every Executive Should Know
Many executives focus on internal cost reduction to improve profitability, but this approach can have negative long-term consequences.
Outsourcing is an industry as old as time, and there is a general understanding that outsourcing in itself is a balance act between quality and cost. Building software with outsourced software developers can be extremely cost effective in the long run, but poor quality output can very quickly shift personnel savings into software maintenance costs, or worse.
The notion that outsourcing technical talent must compromise quality is a misconception that needs to be challenged.
Why Latin American Software Developers?
- LATAM is flourishing with skilled professionals and extensive technical experience:
One of the most compelling advantages of outsourcing to LATAM is accessing specialized talent that may be scarce or unavailable in-house. The costs of sourcing, hiring, and training external resources to achieve the necessary level of expertise can be substantial, particularly for technical roles. This region's growing tech ecosystem offers a unique opportunity to bridge skill gaps while maintaining competitive costs.
- Outsourcing enables controlled, sustainable scaling:
Scalability challenges frequently contribute to startup failures, particularly when funding falls short. By outsourcing development talent, companies can significantly mitigate this risk. This approach allows businesses to scale their technical capabilities in response to market demand without the traditional overhead of proportional cost increases and resource allocation. The flexibility to adjust team size and expertise based on project needs creates a more resilient growth model.
- Enhanced quality and strategic productivity:
Outsourcing development work, even for routine tasks, delivers significant value to organizations. By delegating time-consuming technical work to specialized external teams, internal staff can focus on core business objectives and strategic initiatives. This approach is particularly valuable when considering the opportunity cost of having executives or key team members engaged in non-strategic activities. The resulting productivity gains enable leadership to dedicate more time to high-impact projects that drive business growth and innovation.
What About Timezone Proximity and Recruitment Costs?
Organizations limited to in-house teams often find their operational capacity constrained by traditional business hours. By leveraging nearshore development teams, companies can maintain continuous productivity across different time zones without the complexities of international labor regulations. This approach enables seamless handoffs between teams, ensuring critical projects progress around the clock while maintaining quality standards and communication efficiency.
In terms of recruitment costs, the U.S. Small Business Association (SBA) estimates that the total cost of employing a full-time worker can range from 1.25 to 1.4 times their base salary, considering factors like payroll taxes, workers' compensation requirements, and benefits packages. This estimate doesn't include additional costs like recruitment, prequalification, training, and beyond. The delta between both approaches continues to widen, specially when you consider the velocity of bringing in pre-trained software developers.
Final Thoughts
As said at first, there are many reasons to outsource technical roles. And many more reasons to outsource technical roles to highly skilled talent in Latin America.
At Deverr, we're changing how people think about outsourcing. We believe you don't have to sacrifice quality for cost-effectiveness. Our partnerships with Latin American talent prove that you can have both.
Whether you're looking to scale your team, access specialized skills, or optimize your development costs, we're here to help you build a successful outsourcing strategy that delivers real results.
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