Nearshoring Software Development to Mexico: Advantages and Disadvantages

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Fred Monnier
Fred Monnier
Chief Staffing Operations Officer

Table of Contents

Learn the advantages and disadvantages of using Mexico’s tech talent for nearshoring software development from a US perspective.
Published on
October 29, 2021
Updated on
June 25, 2024

Offshoring has been a common practice in the United States for years. Companies quickly learned that they could have their work completed for much less money by having it done by those living in countries with drastically lower costs of living. Offshoring usually entails sending work to countries a great distance from the source country. For the United States, this includes India, China, and Russia.

Offshoring is not without its problems though. Yes, companies can save a lot of money, but problems due to cultural barriers and time zone differences often lead to delays and added stress.

To solve these problems, companies have begun seeking out remote workers much closer to home. US companies can still save money by using IT professionals from Mexico and the rest of Latin America, but their proximity to the home base alleviates many of the issues commonly associated with offshoring.

The experience and possibilities of this process are so different from those of offshoring that a new term was coined for it — nearshoring. The following article will explain nearshoring software development to Mexico, the pros and cons, and why finding the right partner to help you connect with software engineers in Mexico can make a huge difference in the success of your nearshoring endeavors.

What Is Nearshoring Software Development to Mexico?

Nearshoring your software development to Mexico is a financially savvy way to meet your development needs. The fact that Mexico is right next door is an added benefit.

When nearshoring to Mexico, companies can either outsource work or hire remote workers from there. Either way, companies enjoy the advantages of having remote workers that are nearby and easy to reach while still being able to take advantage of the significantly lower rates of pay.

Nearshoring software development requires very little up-front costs to make the move. There is no need to build new offices — after just an interview and a signed contract, your company can be on its way to enjoying the benefits of nearshoring to Mexico.

Is Now the Best Time to Begin Nearshoring Software Development to Mexico?

Mexico has been working hard to update and upgrade its technology marketplace. The country sees this as a way to introduce new income streams into their economy by growing skilled IT professionals to work remotely for other, more prosperous countries.

To this end, Mexico has created 38 IT clusters across the country. Developed specifically to open their doors to remote IT work, these clusters have state-of-the-art technology and reliable sources of electricity and the internet. They enable IT professionals to compete with other countries for outsourced IT work without significantly raising the costs of hiring them.

All of these efforts have begun to pay off. Nearly 72% of Mexico’s residents have access to the internet, up more than 10% from last year. Once connected, the residents of Mexico have access to many more opportunities to learn and perfect their IT skills. Outside companies have started to notice these improvements, too. A host of companies have sprung up to help connect those in the United States looking for remote software developers with skilled developers in Mexico and the rest of Latin America.

Now is exactly the right time to find reliable and skilled software engineers in Mexico.

Advantages of Nearshoring Software Development to Mexico

There are many reasons why nearshoring your company’s software development to Mexico is a good decision.

Cost-effective Labor

Labor costs are a huge part of any company's budget. Finding ways to lower these costs allows for more money to be spent on expanding and developing your business. Nearshoring your software development to Mexico is one way to effectively lower payroll costs without sacrificing quality.

The cost of living in Mexico is substantially lower than it is in the United States. This means it will cost your company less to pay a remote worker in Mexico a livable wage. This is the ultimate win-win situation — your company wins because the payroll costs go down, and the remote software developer wins because she can earn a very good salary by her country’s standards.

Another factor to consider is that as the economies improve in the countries that have traditionally provided remote IT workers (think India, China, etc.), their costs of living go up. This means that the wages they need to live comfortably will also rise. Over time, this will make outsourcing work to these countries less cost effective.

Time Zone Overlap With the United States

One of the major complaints of those who have outsourced work to distant countries is the time difference. Hiring workers in vastly different time zones can often lead to hassles with project completion goals, team meetings, and response times for questions or issues.

Issues with time zones don't exist when you nearshore your software engineering to Mexico. Mexico shares time zones with much of the United States and is within an hour or two of those areas that don’t overlap.  

No more staying up late or rising before dawn to reach your remote workers. No more missed deadlines because it's a different day where the work is being done than where the deliverables are expected.

Nearshoring work will avoid costly delays and make it easier to sync teams even if they are working in different countries.

Avoiding Cultural and Language Problems

The fact that Mexico and the United States share a border means that the two cultures have already merged to some extent. This lowers the chances of a cultural clash, as can sometimes happen when team members are from extremely different cultures.

This shared cultural awareness allows teams made up of members from both countries to be more cohesive and minimize misunderstandings.

Language barriers are also much less of a problem when hiring remote workers from Mexico. Although the official languages of Mexico and the United States are different, many people in both countries are fluent in both English and Spanish. This makes communication much easier and reduces the chances of delays or mistakes as a result of miscommunication.

Long, Established Relationship with the United States

The United States and Mexico have traded across the border for as long as they've both existed. In a world where politics and trade wars often disrupt the exchange of goods and services between nations, Mexico and the United States have remained strong trading allies.

This long and stable relationship between the two countries makes it very unlikely that a political maneuver or change in leadership would lead to a disruption of trade between them. This adds stability to employment relationships as well. The same cannot necessarily be said for some of the countries that have been traditionally used as sources of outsourced workers.

Intellectual Property Protection

The protection of intellectual property is vital to the success of many companies in the United States. Many companies carefully guard their proprietary secrets — and with good reason. If another company was to get its hands on the key components of your business model, it could use this information to undermine your success.

Unlike many other countries, Mexico and the United States have built trade agreements that guarantee the protection of intellectual property. This makes it possible for you to freely share the information needed to design and create new software with remote workers in Mexico without any fear of having it stolen from you.

Large Talent Pool

One of the struggles with outsourcing IT work, whether offshoring or nearshoring, is finding people with exactly the skills you are looking for. The larger the talent pool you have access to, the better your chances of finding what you need.

The recent improvements to infrastructure and education by the Mexican government have increased the number of people who have access to the tools and resources to expand upon their skill sets. This newly enlarged pool of software engineers and other IT professionals improves your chances of finding exactly the right fit for your company and your project.

Developed IT Infrastructure

Mexico has invested a great deal of time and money into improving the infrastructure of certain regions. These IT clusters, as they are known, were created specifically to enable the residents of these areas to compete for international IT outsourcing opportunities. There are currently 38 of these clusters with more in the works.

The Mexican government has succeeded in implementing infrastructure improvements to spark economic improvements. This makes it likely that they will continue to emphasize infrastructure improvements to enable more of their residents to work remotely.

Strong infrastructure and an emphasis on further improvement will likely continue to boost the availability of skilled and reliably connected remote workers.

Learn More: Your Guide to Remote Developers Management

Disadvantages of Nearshoring Software Development to Mexico

Although a great option for many US companies, choosing to nearshoring software development to Mexico is not without flaws. It should be noted, however, that these issues are not unique to hiring remote workers from Mexico — they may be encountered in any offshoring or nearshoring endeavor.

Compliance with National and Local Laws

It is unreasonable to expect that the laws governing labor and taxes in a foreign country will be identical to those of the United States. Any company looking to hire remote workers from Mexico must take the time to learn about national and local ordinances that may affect both the company and the workers it hopes to employ.

This can be a lengthy process, especially if your company is hiring workers from different regions within Mexico, but it is vital. Failing to comply with the local rules and regulations may result in hefty fines for your company or your employees.

Finding a company that not only connects you to the talent you need but also ensures that you are in compliance with all national and local laws is a great way to streamline this process.

Work Culture Differences

The physical proximity of the United States and Mexico was previously listed as a benefit because cultural obstacles are kept to a minimum. But this doesn't mean they don’t exist at all.

Awareness of local and national holidays, usual working hours, and styles of work ethic are some of the areas where clashes may occur. Also, although many Mexican residents can speak and understand some English, language may still be a barrier to smooth communication.

Finding someone with a deep understanding of all of the cultures involved is the best way to avoid these problems. This may be best done by working with a company that provides you with such mediators.

Upfront Costs for Establishing Operations

One of the most common reasons for hesitancy about nearshoring or offshoring remote work is the cost of getting the operation started. While the upfront costs of nearshoring remote workers are minimal compared to other industries such as manufacturing, it's important to be aware of what's required to get set up.

For example, while workers are usually responsible for providing the hardware necessary to get the job done, there may be specific pieces of equipment that your company must provide. Thankfully, this is as simple as shipping a single package. Anything else remote workers may need can be handled through the internet.

If you want to tackle the hiring of remote employees in Mexico on your own, there may be some travel costs to consider. Finding the right areas to search and learning what you need to understand about local customs and laws is best done in person. However, working with a company that offers a firm handle on the process of nearshoring your software development to Mexico may eliminate the need for travel entirely.

Revelo: Advantages of Nearshoring Without the Disadvantages

If you're ready to expand your workforce to include remote software developers and want to know the best way to get it done, it may be time for you to contact us at Revelo.

Revelo specializes in finding highly skilled software engineers in Latin America and connecting them to companies in the United States that are in need of their services. This is all we do and we are experts at it.

We have scoured Mexico and other Latin American countries to locate the best tech talent they have to offer, making it easy for you to find exactly what you need. It's no longer necessary to post multiple job openings or search for independent contractors in a language you may not be familiar with — we've already done it all.

But more than just connecting you to talent, we at Revelo also know all the local laws and regulations that may affect your company to ensure that everything is done by the book. Both you and your remote workers will be protected from any issues caused by a lack of compliance.

What's more, our staff's knowledge of the language and cultures of Mexico makes it possible for us to smooth over any miscommunications or culture clashes before they even happen. In four easy steps, your company can be on its way to benefiting from the advantages of having your software development championed by a remote worker in Mexico.

  1. Contact us – Reach out to us and we'll schedule a face-to-face or online meeting to discuss exactly what you need and how we intend to get it for you.
  2. We find your matches – Usually in three days or less, we'll send you a list of candidates that have been vetted and proven their skill levels.
  3. You meet the candidates – Interviews will be set up so you can assess the candidates yourself.
  4. Get to work – Once you've selected the candidates you feel will best fit your needs and your team, they'll be hired and ready to get to work.

We at Revelo know that you can’t know everything you need to know about an employee from one interview. We also know that although we only present you with qualified candidates, sometimes other obstacles will prevent a new employee from seamlessly joining a team. To be sure that you're satisfied, we offer a 14-day trial period. If you find yourself dissatisfied with an employee you hired through Revelo within the first 14 days, you'll pay nothing.

Nearshoring software development to Mexico may be the most cost-effective way to ensure your company's work is completed by qualified and talented remote employees. Contact us at Revelo to learn more about how we can make that happen.

Further Resources:
Alternative to Offshore Software Outsourcing

Alternative to Software Development Staff Augmentation

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