Nearshore Software Development in Mexico: Benefits and Challenges

“Mexico is flooded with top software development talent,” a Forbes Technology Council headline declares. 

Competition for top developer talent is extraordinarily high. This is especially true because hiring budgets have gotten squeezed, and companies are increasingly being asked to do more with less. Many technology leaders are looking for help outside the U.S., but they don’t know where to start. Let’s explore the benefits and challenges of nearshore software development in Mexico, a Latin American hotspot for hiring software engineers.

Benefits of Nearshore Software Development in Mexico

Mexico offers an abundance of tech talent. Why else should you look for nearshore developers in the country?

Deep Pool of Top Developer Candidates 

Simply put, there are many talented developers available for hire. As measured by Candidates Per Open Role (CPOR), Mexico is 3x less competitive for hiring engineers than the U.S.  The U.S. has 7.8 candidates per open role, whereas Mexico has 25.7 developer candidates per open role. That means more talent is available for your roles!

Plus, the engineering talent is top tier. Mexico has made significant investments in the technology ecosystem, both in its startup community and its computer science-focused institutions. Top tech cities in Mexico, such as Mexico City and Guadalajara—the Silicon Valley of Mexico—boast renowned colleges and universities, including the National Autonomous University of Mexico (UNAM) and Universidad de Guadalajara (UdeG). 

Meanwhile, world-famous tech companies like Amazon, Intel, Oracle, HP, and IBM, and thriving startups like Clip, NuBank, and Uber, are snapping this talent up. In fact, 30% of CS grads from top universities are hired by U.S. companies. And Mexico consistently receives the most venture capital (VC) investment in startups, behind only Brazil.

Cost-effective Full-Time and Contract Engineers

These top software engineers are also significantly more cost-effective than hiring domestically in the U.S. On average, for full-time hires, you can see a savings of 35% from hiring talent in Latin America:

Mexico’s typical software developer salaries for Level 3 through Level 5 (L3 – L5) software engineers range between $70.5k to 147.3k USD, orders of magnitude cheaper than U.S. software engineers.

Monthly contract rates for LatAm software developers are also much more cost-effective than U.S.-based contractors.

Time Zone-Aligned for Easy Collaboration

One of the key advantages of nearshore software development in Mexico is time zone alignment with the United States. This synchronicity lays a solid foundation for seamless collaboration between development teams. 

With overlapping working hours and near real-time communication, barriers are significantly reduced. This means that businesses in the U.S. can maintain a close connection with their nearshore teams in Mexico, without the delays often associated with offshore development. The result is a more agile and efficient development process.

Cultural Compatibility

Mexico’s cultural affinity with the United States is a compelling factor for businesses seeking nearshore software development solutions. Shared values and a similar work ethic mean teams in Mexico are often attuned to U.S. business practices, making it easier to integrate them into existing workflows and processes. This cultural compatibility enhances collaboration and helps in understanding the broader context of projects and ensures teams mesh despite not being co-located.

Proximity to the U.S. for Convenient Travel

Mexico offers a practical advantage in terms of proximity. With convenient travel options and relatively short distances, professionals in the U.S. can easily visit their nearshore teams in Mexico when necessary. Remote teams still crave in-person interaction, so many distributed teams choose to meet quarterly for strategy work and good old-fashioned team-building. Cheap airfare and accessibility to the U.S. make that possible.

Challenges with Nearshore Software Development in Mexico

Dev Shops Are Mercenaries, Not Missionaries

Many software development companies in Mexico offer contract development teams. Known as dev shops, these engagements are useful for short-term projects and engagements. 

However, tech product companies, such as SaaS solutions, marketplaces, and cybersecurity enterprises, need developers who are invested in the long term. Long-term engineers can help develop and iterate solutions over a long period of time. That’s why full-time employees or long-term contractors are a better answer.

English as a Second Language

English is widely spoken in Mexico, and many developers have a high level of proficiency in the language. However, it’s still a second language for most Mexican engineers. This can sometimes lead to misunderstandings or miscommunications, particularly when you’re dealing with complex technical issues.

To ensure strong communication, you should assess English proficiency in Mexican developers before working with them. Many engineers have previously worked for U.S.-based companies and are already fully proficient. You can often spot the differences in reviewing a candidate’s work experience.

Legal and Regulatory Considerations

Hiring internationally always involves understanding legal and compliance issues. Mexico is no different, but it has relatively straightforward regulatory requirements. Still, it’s important to understand the specifics of what hiring and contracting in Mexico requires.

Infrastructure Gap in Certain Mexican Locations

While many major Mexican cities often have a modern and reliable technological infrastructure, there can be connectivity and resources in more remote or underserved areas. This infrastructure gap may present challenges in terms of internet speed and reliability, which are crucial for seamless collaboration in software development.

How Terminal Helps with Hiring Developers in Mexico

Here at Terminal, we’re big believers in software development talent in Mexico. Unlike dev shops, we offer both full-time and contract developers for hire.  And we focus on only offering elite talent; we approve only the top 7% of candidates based on skills, experience, and English proficiency. 

We screen every candidate and share those video screens with you to fully understand each candidate’s experience and communication skills. This ensures you’re only considering top candidates who can communicate seamlessly with your U.S.-based team.

For both full-time and contract, our in-market experts help manage legal and compliance with your team so you don’t have to be experts on the ins and outs of Mexican employment.

Learn more about hiring Mexican engineers and Latin American developers. Or, get instant access to browse Mexican developers. Contact us to learn more!

FAQ

What is nearshoring in Mexico?

Nearshoring in Mexico is when nearby businesses, usually in the U.S., hire workers or teams from across the border to complete projects or tasks. They may outsource the work or hire full-time employees in Mexico. 

Why should I consider nearshore software development in Mexico?

Mexico is a great country for nearshore software development thanks to its pool of top engineers, cultural similarities, time zone alignment, and cost-effectiveness. Moreover, its geographic proximity to the U.S. enables easier collaboration and communication. 

What’s the difference between nearshore and offshore software development?

Nearshore and offshore software development both involve having engineers in other countries create software solutions. However, nearshore development means working with developers in nearby countries like Mexico, Costa Rica, or Colombia, where you have time zone alignment and cultural similarities. Offshore development refers to working with developers in distant countries, such as India or China, where you don’t share overlapping business hours and can’t communicate in real-time.

How much do software engineers in Mexico make?

Software engineers in Mexico earn $99,450 per year on average, according to Terminal’s Remote Software Engineer Salaries tool.