Tackling U.S. Developer Shortages with Nearshore Development

10 min read

The United States has seemingly always faced a shortage of tech talent, and the problem is increasing year after year. According to research, there is a shortage of skilled software developers, which will increase with the rising demand for tech solutions. Most companies are shifting their focus to tech solutions and digitizing themselves to address their business challenges. This trend has become exacerbated in the COVID era, with businesses that were not traditionally dependent on technology needing to hire software engineers and invest in expanding into tech in order to stay afloat.

The introduction of innovative technologies such as artificial intelligence, big data, and cloud computing has increased across all industries. Still, the present talent pipeline cannot meet the pace at which tech jobs are being created. The jobs and skill gas are increasing continuously at a fast pace in multiple industries, and hunting for tech talent is challenging in the present.

With an ever-growing need for software engineers, combined with an increasingly urgent shortage of workers in the United States, Latin America, and nearshore software outsourcing will inevitably become ubiquitous in U.S. software development. Talent shortages, alongside many of the benefits of hiring nearshore software engineers, will ultimately require most startups and enterprise businesses to look to nearshore countries for their hiring needs.

Latin America

The Future of Developer Shortage

What will the future outlook of tech talent shortages look like? Will the demand for high-quality software developers continue to increase, or will the number of jobs keep rising?

The national average growth rate is 8% in the United States, which means we can forecast a severe shortage in the tech industry. The potential employers in the tech industry are also increasing quickly. Outside of the tech industry, we have seen a heavily growing trend in employee shortages, and this trend is likely to continue within the tech industry.

Today the problem is not whether there are adequate software developers available. It is about how to deal with the shortage of tech developers. The scale of shortage in the U.S. is very alarming.  This is not a problem that will easily be solved from within the U.S. There are simply too many software projects to scope hiring needs to the U.S. when Latin America has pretty much all of the benefits you would receive from onshore development at a lower rate.

What does the shortage of tech talent mean for a company?

Whether using A.I. or automation of processes like sales and customer support, you need to hire technical people at some point. A significant talent deficit can affect a company badly in the present and future.

More and more companies in the U.S. have started exploring new locations to discover technical talent. Companies are paying attention to the locations in their neighborhood to find the talent they need. Within the United States, people are looking across the country and embracing remote work within their software engineering teams. Once you have embraced remote engineering teams, the benefits of hiring onshore vs. nearshore are minimal. The process of hunting professionals in the neighborhood of a country is called nearshoring. Microsoft, PayPal, and Amazon are the biggest examples of nearshoring as they are outsourcing their software development to companies in Latin America.

In today’s labor market, the supply of labor does not nearly meet the demand for labor. This makes a compelling case to look towards Latin America for your hiring needs, as affordability and access to talent are very important to employers in today’s world.

Why Nearshore Development?

There are plenty of reasons U.S. companies opt for nearshore software development, such as low operational costs, cultural fit, easy business management, and access to a large talent pool.

Let us explore the benefits of nearshoring for companies in the United States.

Low operational costs

The low operational cost is the key advantage of nearshore software development outsourcing. Outsourcing development projects to a nearshore company reduce the costs of office and equipment maintenance. Since these processes are run in the partner’s office, they are responsible for the expenses. The reduced labor cost and access to nearshore talent ultimately minimize the operational costs. The result is a low cost of operation and more time to focus on core business areas.

Low-cost talent resources

Hiring software engineers in a country in your neighborhood is more affordable than in-house software developers. Moreover, software developers in Latin America charge lower than native U.S. tech developers. The lower cost of living is the reason for lower wages for nearshore developers. The low operational cost allows companies to save some capital for future investments. In a world where remote work is steadily increasing in popularity, the downsides of having nearshore talent from Latin America are very minimal compared to hiring onshore resources from the U.S. When your talent costs less, your research and development costs drop.

Access to a larger talent pool 

Nearshore software development enables U.S. companies to hire tech talent with skills unavailable in their country. Hiring tech talent is challenging for both startups and established companies. When you expand your talent pool to all of a neighboring country, you expand the supply of developers in a larger area. Access to a larger talent pool in the neighborhood also minimizes the difference in time zone between your company and the nearshore team. In today’s software development world, it is hard enough to hire quality talent no matter where you look. Opening your company to nearshore software engineering greatly increases the pool of talent that you are hiring from, making it more likely that you will find quality hires for a decent price.

Sound Management

Since the development teams are primarily based in the same time zone, the nearshore approach enables you to manage business processes effectively. Even if you outsource to a nation with a time zone difference of 1-3 hours, it won’t significantly affect how you manage your business.

You will be able to rapidly remove obstacles and convey problems in real time because of the close closeness of time zones. Use this benefit to hold frequent syncs, daily stand-ups, and team meetings to make the most of nearshore product development.

Tight communication and collaboration are key to the success of software projects. Nearshore development has a distinct advantage over offshore outsourcing when it comes to collaboration. communication, and team unity. While language barriers can exist in nearshore development, it is easy enough to set a minimum standard for English level for all of your hires, which reduces any issues with language barriers.

Cross Cultural Fit

By developing software products in a nearshore environment, it is possible to avoid cultural differences and communication problems. You might reference research on cultural compatibility to ensure that there won’t be any issues with corporate communication. There are various situations where cultural compatibility is not always guaranteed despite geographic proximity. But you can easily address this issue by doing cultural training that would aid the partner companies in finding common ground.

Better Communication

Effective communication with your offshore developers is the key to any successful project. Communication is important and having a similar time zone makes the development process more efficient. At Flatirons, we focus on effective communication with our teams to facilitate nearshore software development. Therefore, we limit the outsourcing of software development to nearshore developers.

How to hire a nearshore development team?

Searching for businesses with a solid reputation, years of expertise, and a group of talented engineers is the ideal method to locate a decent partner.

Before signing any contracts, make sure to thoroughly investigate any potential partners. To learn more about how working with them might be, look at their portfolio, read customer testimonials, and get in touch with some of them.

Flatirons is a nearshore development company that is happy to provide you with thorough references and customer testimonials before partnering together on your software project.

Working with a nearshore development company

Outsourcing your development projects to a nearshore company is a cost-sensitive decision. Working with a nearshore team may seem challenging at first, but most of the obstacles are manageable, and at Flatirons, we handle the challenges effectively. For example, we only hire people capable of communicating in English to minimize communication barriers. We prioritize solutions that allow us to hire the best nearshore software, developers. The advantages of a nearshore development team can outweigh the disadvantages with reduced operating costs and keep your projects going.

How to choose a reliable nearshore vendor?

Choosing the best software development companies can be challenging. Once you decide on a nearshore location, the success of your projects depends on choosing the right vendor. To make the decision process easier, here are the criteria companies should access while looking for a reliable nearshore development partner.

Company Size

Different vendor company sizes can be appropriate for different companies. Smaller vendors can be more intimate and feel like closer partners in bringing your software project to market. For other teams, larger vendors might be more appropriate. Consider the optimal size of a software development vendor for you.

Relevant expertise and experience

Before signing into a partnership with a nearshore vendor, check their technical expertise and the experience of the company. Also, research their portfolio to check whether they have worked on the type of projects you need. You are likely entering new territory when hiring abroad, and you should make sure to have references in place to ensure that you are hiring from a talent agency.


Another crucial thing is to check whether they comply with the internal information security standards. While working with the nearshore software development vendors, you may need to deal with countries that adhere to the same information security norms. Ensuring that the software engineers that you work with nearshore have modern computers and security software installed will go a long way to protecting your IP. This is true no matter where you hire software engineers.

Get into the agreement details.

Learn the legal aspects of the nearshore vendor. Get clear on the points mentioned in the contract to avoid any legal problems in the future. If you are hiring from a U.S. consultancy that has a subsidiary in Latin America such as Flatirons, you can avoid some of the legal considerations that go into hiring resources from other countries as your contract will be signed with a U.S. entity. If you are signing with an entity directly in Latin America, make sure to remember that many legal agreements are hard to enforce, and laws between countries can vary greatly.

Summing Up

Nearshore software outsourcing can be a new concept for companies, but it can make business management easier for U.S. companies. It allows in-house I.T. managers to supervise nearshore software developers working from a compatible time zone. Moreover, nearshore software engineers are available to U.S. companies at affordable rates. If your team is already remote, hiring nearshore talent should be a very easy adjustment to your existing work style.

With all these benefits of nearshore outsourcing, companies like Disney, NBC, McGraw Hill, and Repair Prices have witnessed excellent growth and ROI. Nearshore outsourcing offers the best talent in nearby locations without the challenges of offshore software development, which makes it a win-win deal for both the company and the vendor.

If you need help with nearshore software outsourcing, contact Flatirons today. Our extremely talented team is located throughout Latin America.

You can also check here for a complete Guide to Nearshore Software Development.

Nearshore Software Development Experts

Leverage Flatirons' nearshore development services for proximity, cultural alignment, and cost-effectiveness.

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