Outsourcing Software Development to Ecuador: Why You Should Hire Ecuadorian Developers

Outsourcing Software Development to Ecuador [Full Guide]

Published on
February 21, 2022
Updated on
January 27, 2023
Author
Reх Huхford
Reading Time
Being a country that uses Eastern Standard Time while having a robust tech talent pool, Ecuador is becoming a popular destination to outsource software development for US companies. Learn the benefits of hiring Ecuadorian software engineers and how to find them.

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When hiring independent software developers, U.S. companies prioritize cost efficiency, ease of business, and employee skills. Fortunately, they don't have to search that far to get what they need. Latin America is practically around the corner and has got it all.

While there are 21 countries or territories to explore in Latin America, U.S. employers shouldn't overlook Ecuador. This country may be small, but it hosts some of the most skilled software developers in the region. We know it primarily for the beautiful scenery and places, such as the Galapagos Islands, but Ecuador has also undergone considerable technological development in recent years. The tech-savvy market now puts out not only talented but highly-educated and experienced software developers.

Outsourcing software development to Ecuador is an excellent idea for any company that wants to rely on qualified employees and bring diversity to their teams at affordable costs. If you're interested in other advantages to hiring talents from Latin America and the process itself, we discuss the topic in more detail in this comprehensive guide. We also provide a handful of tips on where to find and how to hire remote developers to support your growing business.

Advantages of Outsourcing Software Development to Ecuador

Outsourcing software development to Ecuador has a range of advantages for your company, thanks to the country's increasing influx in technological advancements. Here are some of the benefits you can expect when you hire Ecuadorian developers:

Time Zone Alignment With the U.S.

When hiring remote developers overseas, many companies struggle to adjust to the time zone of their employees. It happens that the company and the developers work in different time zones. With the time gap between teams being five or even eight hours, communication is not as smooth as possible, and the work can suffer.

The good thing is that Ecuador follows the U.S. Eastern Standard Time zone. With your software developers operating in the same hours as you and the rest of your team, you won't have any interaction issues. Your teams will align perfectly and get the tasks done more efficiently through seamless communication.

U.S. Dollar Is the Official Currency

Doing business and outsourcing software development in Ecuador is also convenient because the country's official currency is the U.S. dollar. There are no currency restrictions for people entering or exiting the territory. However, Ecuador's banking systems and commercial sites don't accept $100 bills, so remember that when hiring software developers from the country.

English Language Proficiency

Although English proficiency is not the best in Ecuador because Spanish is the official language, most Ecuadorians understand and speak basic English. You'll be able to communicate with your employees smoothly and avoid any issues that usually come from language barriers. Moreover, as Ecuador develops technologically, you are more than likely to find software developers with exceptional language skills, regardless of the general English proficiency index of the country.

Geographical Proximity

Ecuador is located near the equator on South America's west coast. Because of the geographical proximity, U.S. companies have been doing business in Ecuador for years, and fortunately, most of them have succeeded in doing so. These two nations have a long-lasting economic history, which makes it easier for U.S. employers to hire software developers from Ecuador.

Government Investment in Technology

As we mentioned, Ecuador is going through a digital transformation quickly. Today, almost 31 Fintech startups collaborate with Ecuador's digital advancement by providing alternative financial solutions.

As a part of the governmental investment, Ecuador also hosts Yachay City of Knowledge, known as a "New City" located in rural Ecuador. The Ecuadorian government joined hands with the corporate sector to establish a city that serves as a technological research hub for the citizens.

This "New City" is situated 120 km north of Quito, the country's capital. The concept of Yachay has shown the potential of making Ecuador an impressive technological hub that produces a talented and tech-savvy workforce.

Cultural Similarity

Another benefit of outsourcing software development to Ecuador is the cultural similarity. The culture and living style of Ecuador and the USA are quite alike, allowing companies and employees to be on the same page at all times. The social resemblance helps independent software developers to understand the American market and its changing dynamics. Moreover, they can also easily understand the business functions and requirements of the USA.

Apart from having the same social culture, both countries also have more or less a similar work culture. Since most U.S. businesses prefer hiring or outsourcing from countries with similar school and work systems, Ecuador can be the best place for them to get started.

When the entire workforce belongs to similar work culture, all (independent) teams perform better and provide fruitful results. Since there are no communication or understanding barriers, team members can give their best at work and achieve higher productivity.

Cost Savings

Nearshoring software development to Ecuador also helps U.S. companies reduce business costs. For instance, the geographical proximity of both countries allows companies to save their time on traveling and decrease transportation costs. The time zone compatibility can also impact the savings, considering there's no need to extend the deadlines and wait for teams to get the job done.

Companies can also cut costs on office spaces when they hire remote software engineers. With a remote workforce, you don't have to spend extra on maintaining and managing the offices. Even more importantly, the hiring costs of Ecuadorian software developers are way less than U.S. professionals. If you want to find out how these expenses differ, take a look at our next section, where we discuss hiring rates in detail.

Cost of Hiring Ecuadorian Software Engineers

If you're looking for ways to cut down your expenses, you should search the Ecuadorian talent pool. Hiring Ecuadorian software engineers won't be heavy on your budget at all. Compared to the USA, Ecuador has significantly lower salary rates. Here's what you can expect as far as cost is concerned:

Average Yearly Salary Rates for Ecuadorian Developers

Here are the average salaries for software developers in Ecuador:

Junior Salary Rate

According to Salary Expert, the average salary for a junior software developer in Ecuador is $21,768 per year. On the other hand, a junior-level software developer in the U.S. makes $68,000 per year. Without a doubt, companies have to pay way less to an Ecuadorian software developer than a U.S. professional.

Mid-level Salary Rate

A mid-level software developer in Ecuador earns $30,625 per year on average. Meanwhile, a U.S. software developer at a mid-level position makes $98,000 a year.

Senior Salary Rate

While an Ecuadorian software developer at a senior position can make up to $38,688 per year, a U.S. senior-level software developer earns up to $140,000 a year.

Considering the listed rates, you may want to hire Ecuadorian software developers if you need to cut down the costs in your company. The difference in wages between both countries is massive. However, this doesn't imply that a software developer from Ecuador is less skilled than a U.S. professional. The economic situation in the country only makes hiring software specialists from Ecuador more financially viable.

Average Monthly Salary Rates by Tech Stack

The salaries of Ecuadorian software developers may vary depending on the type of software development they perform (mobile app development, programming, front-end developer, back-end developer, and more). The more demanding the projects, the higher the salary, which is the case for most countries, not only Ecuador.

There's not much difference in the salaries of Ecuadorian software developers working at different levels. According to Glassdoor, the average salary for a Full Stack Developer in Ecuador is $1,400 per month. However, different companies offer different salaries to software developers. For instance, Dreamcode (Ecuador) pays around $1,000 to software developers, while e-Magic provides around $1,526 - $1,667 per month to full-stack developers.

Average Hourly Rates to Outsource to Ecuadorian Senior Talent

Salary Explorer states that a senior software developer in Ecuador makes up to $8 per hour. On the other hand, a U.S. software developer with the same experience level earns up to $63.35 per hour based on ZipRecruiter's data. The lowest U.S. professionals earn is $16.11 on average, almost double what an Ecuadorian software developer makes. However, keep in mind that the average hourly rate also varies depending on the experience level and location of the software developer.

For example, an Ecuadorian software developer with experience of anywhere between two to five years can make up to $910 per month, 34% more than the salary of a two-year developer. Meanwhile, Ecuadorian software developers having up to ten years of experience on their shoulders can earn around $1,350 per month. Believe it or not, this amount is 48% more than what software developers with five years of experience usually make.

Disadvantages of Nearshoring Software Development to Ecuador

Despite all the benefits, outsourcing software development to Ecuadorian does come with its set of challenges. Without the right hiring partner to help you through the recruitment process, you may have problems connecting with the local talent, managing the payroll, and more. If you want to hire Ecuadorian developers as a U.S. company, check the disadvantages listed below and consider partnering with a talent platform for success.

Hard for Foreign Companies to Connect to Local Talent

Although the U.S. and Ecuador have similar cultures, employee management should be simple and effective. However, companies outsourcing software development to Ecuador may have a hard time connecting with the local talent. As a U.S. company, you may fail to find the spots that offer the best talent and get tangled in a web of paperwork for establishing the business abroad.

Fortunately, you can overcome these difficulties by partnering up with the knowledgeable talent platform that will do the research for you and help you hire and manage the best local talent in Ecuador.

Navigating Local Compliance and Payroll

Companies already working in the U.S. know the complications of the federal labor laws and the tax regulatory system. They realize that compliance with these regulations is crucial, or they will get stuck in legal issues. The same applies to taking your business outside the country.

So, before stepping into the Ecuadorian market, U.S. companies must understand all the laws related to employees' local compliance and payroll. In Ecuador, employees are subject to the Ecuadorian Labour Code (1938) that regulates employment relations for every Ecuadorian national and foreign citizen working in the country.

The good thing is that the Ecuadorian market welcomes U.S. companies warmly. Ecuador allows 100% foreign equity ownership for U.S. businesses without requiring you to authorize or go through any screening. The country doesn't limit royalties remitted for license and franchise transactions either. Remittances in Ecuador bear a capital exit tax, standing at 5% currently. Additionally, since both countries have similar currencies, U.S. businesses don't face foreign exchange challenges.

If these regulations sound too much of a nuance, Revelo's HR professionals can deal with your payroll, contract, and taxes, so you don't have to waste your time and energy.

Revelo: Source, Vet, Hire, and Manage Ecuadorian Developers in 1 Platform

If you're determined to bring diversity to your team or scale up your business, Revelo can help. We are here to support your journey by saving you the precious time and resources you would spend understanding the Ecuadorian tax and labor laws. With Revelo, you can focus on your business operations and strategies because we handle the recruiting part.

Revelo is a talent platform that gathers the most-skilled individuals from Latin America, but we don't handle only the sourcing. We help you vet, hire, and manage the talent, so you don't have to bother with daunting recruiting tasks. Check out our website to see how we aid companies in finding and maintaining the best global talent.

Related: Tips and Strategies for Hiring Front-End Developers

Where to Find and Hire Ecuadorian Software Developers?

Ecuador is a small but rapidly developing country that took a big step toward digital transformation. As such, there are quite a few tech hubs and job boards you can use for finding talents in Ecuador.

Tech Hubs in Ecuador

Quito

Quito, the capital city, is the primary site for the ITO/ BPO (Information Technology Outsourcing/Business Process Outsourcing) sectors, mainly due to the availability of vast local talent. So far, the city is considered a maturing software region with relatively lower labor costs than other cities in Latin America.

Guayaquil

Another prominent tech hub in Ecuador is Guayaquil. It hosts tech companies covering around 44 services and industries, including tech. These companies perform many software development functions, such as branding, web design, UX design, web development, mobile apps development, and more.

Cuenca

Cuenca is another tech hub in Ecuador that gathers exceptional tech talent. Over the last few years, the University of Cuenca has gone through immense development to respond to scientific and human challenges.

Ecuadorian Job Boards

Ecuador Expertini

Expertini is a job platform that enables professionals to expand their search and avail new employment and career opportunities. Meanwhile, it also helps employers hire recruits in Ecuador without paying any fees.

WhatJobs

WhatJobs is another effective job search platform that helps Ecuadorians search for jobs in the U.S. and keep track of the latest job openings in reputable companies.

Talent Marketplaces

Talent marketplaces serve as a bridge between companies and software development talent. What gives them a cutting edge is their ability to formulate recruitment strategies with the help of AI. As a result, both companies and job candidates get the best of the process.

At these marketplaces, the workforce is pre-trained before getting listed on any platform. So, you don't have to worry about the hiring nuances, and neither do candidates. Talent platforms ensure candidates get matched to the right employers without having to handle bureaucracy.

Most employers usually prefer talent marketplaces to find software developers because of the personalization. They can easily search jobs, gigs, and employees on talent marketplaces according to their needs, making them more effective than traditional recruiting solutions, especially job boards.

Revelo

If you want to start with a talent marketplace, consider going with Revelo. Our talent platform holds a list of trained developers from Ecuador with different software development skills to offer, including proficiency in React, Python, Node, Ruby on Rails, and more.

Revelo connects companies to candidates in a humanized way, so you know you made the right pick. You get to conduct interviews, hire employees quickly, and start developing. Moreover, there's no risk in the process. If you end up with a candidate that is not a good fit, you pay nothing.

Out talent platform also deals with your payroll, contract, taxes, and other regulations. We make sure you stay compliant when you hire Latin American talent while saving your time and reducing costs in the process.

Key Takeaways

Outsourcing software development to Ecuador has its fair share of benefits, but it does come with a couple of challenges. To hire the best talent in Latin America, you'll have to perform solid research and keep track of all the local regulations for managing the remote workforce.

Partnering with a talent marketplace can help you save time and reduce costs on the entire recruitment and employee management process. Revelo is there to make sure you hire Ecuadorian software developers of the right skills and handle your payroll, contracts, taxes, and other necessities. We take the guesswork out of the equation and provide you with the best workforce right away.

Contact us today to learn more about how we can support your business growth and help you hire an ideal developer from Latin America.

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Jose A.

Reх Huхford

Jose E.

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Full-Stack developer with 6 years of experience working with MERN stack. Worked for multiple transnational companies focused on web and cloud, technology services, and R&D. Major professional experience in Frontend with Javascript, Node.js, React.js, and Vue.js

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