Outsourcing

Outsourcing Software Development to Guatemala: An Ideal Nearshoring Destination

April 21, 2022
Reх Huхford
Guatemala is becoming a nearshore destination for outsourcing software development. Learn why and how to hire Guatemalan developers.
Outsourcing Software Development to Guatemala: An Ideal Nearshoring Destination

The Central American country of Guatemala is located south of Mexico. Its lush landscape is home to beautiful rainforests, volcanoes, and ancient Mayan historical sites. Guatemala has more to offer than just stunning scenery, however.

For businesses that are looking to grow their talent pool by outsourcing software development, Guatemala is emerging as a viable tech hub. In this article, we'll cover the benefits of hiring Guatemalan software developers as well as some of the pitfalls to avoid. Learn why many U.S. companies are choosing to outsource to Guatemala and how you can, too.

Reasons for Outsourcing Software Development to Guatemala

Guatemala's tech ecosystem is still in its early stages, but businesses and the government are increasing their investments. There have already been some significant innovations that have come out of Guatemala, and it's poised to become a significant contributor to the global tech scene. For U.S. businesses, Guatemala has a lot of benefits that make outsourcing an attractive option.

Same Time Zone as the U.S.

When your remote teams are located in markedly different time zones, it can cause communication problems, slow down progress, and make collaboration extremely difficult. Guatemala' time zone is the same as U.S. Central Standard Time (CST) through the whole year, so real-time collaboration between your in-house and remote teams will be effortless. The benefits of working with a remote team in a similar time zone include:

Cost savings. If you need to travel, it's much cheaper to fly to Guatemala than to Asia. Even if you never plan to travel to your remote team, you'll save money on labor costs by eliminating expensive delays associated with waiting around for your remote team to respond to issues. Your entire team is available at the same time, which means that everyone is using their time efficiently.

Time savings. Similarly, having your team in the same time zone means that you don't have to deal with slow-downs and missed deadlines on your projects. Instead of waiting around for your remote team to respond, you can troubleshoot and deal with issues as they crop up instead of waiting seven to ten hours, which you would have to if your team were in Asia.

Effective collaboration. When you're working with an agile team, swift communication is imperative. In our race-to-market economy, having a team that can only communicate asynchronously can be disastrous. While your team is playing email tag, your competitors will be launching products.

Large Untapped Talent Pool

Guatemala has a large pool of tech talent. There are 16 universities in Guatemala City alone. Some of these, such as Universidad del Valle and Universidad Francisco Marroquin, provide excellent business education. Similarly, Universidad Galileo has been recognized as one of the best tech education schools in the world. As a result, Guatemalan developers are well-educated and highly skilled.

Seedstars has described the tech talent pool in Guatemala as "hungry and ready to make an impact." Guatemalan talent has produced Duolingo, hoteles.com, which was later sold to Expedia, and BlueKit, a cross-border bill payment system that was eventually acquired by Paypal.

English-Proficient Developers

The official language of Guatemala is Spanish, but almost half of the population speaks English. You won't have any trouble finding software developers who are proficient in English when you're ready to outsource.

Geographical Closeness to the U.S.

Because it's close to the U.S., travel to Guatemala is cheap and fast. Should you need to travel to visit your remote team or set up a local presence, it will be easy to go back and forth between Guatemala and the U.S.

Similar Culture

The business culture and communication style of Guatemala are similar to those in the U.S. Traditional work hours are 8:00 a.m. to 6:00 p.m. Guatemala's main trading partner is the U.S., so they're accustomed to working with American businesses. Guatemalans are formal and conservative, but they're straightforward in their communication, so you won't have to worry about deciphering hidden social cues.

When your in-house and remote teams share a similar culture, they can perform better because they've received a comparable education — they know how to work together. There won't be as many misunderstandings, and they can work more effectively as a cohesive unit. You won't have to work through an extra layer of translating unfamiliar social customs before your teams can communicate.  

Lower Cost

The cost of living in Guatemala is much lower than it is in the U.S. You'll pay about 56% less to live in Guatemala than you will in the U.S. — housing costs alone, for example, are about one-third of what you can expect to pay in the U.S. Because of the lower cost of living, you can hire developers for much less than you'd pay comparable U.S.-based software developers.

The Cost to Hire Guatemalan Software Developers

The currency of Guatemala is the Guatemalan Quetzal (GTQ), which has a current exchange rate of 0.13% with the U.S. dollar. We'll look at what you can expect to pay software developers from Guatemala, although the numbers below only include salary. You may have to pay additional fees for payroll management and other services related to offshoring.

Average Yearly Salary Rates for Guatemalan Software Engineers

The average annual salary for software engineers in Guatemala is 115,000 GTQ, which is a little less than $15,000 USD. The exact income a developer makes will vary based on experience, of course. At the low end, junior Guatemalan developers average 93,500 GTQ (approximately $12,121 USD), while senior developers earn an average of 159,000 GTQ (approximately $20,613 USD). Even at the high end, this is far less than the median salary of U.S.-based software developers, which is over $110,000 per year.

Average Hourly Rates to Outsource to Guatemalan Tech Talent

If you need to hire Guatemalan developers on an hourly basis for software development, you can expect to pay around 55 GTQ per hour, which is approximately $7 USD. This is a stark contrast to the average of $47.95 per hour that U.S. developers earn.

Cons of Nearshoring Software Development to Guatemala

Now that we've discussed the advantages of outsourcing software development to Guatemala, let's discuss the disadvantages. While it's cheap and convenient to hire Guatemalan developers, there are some obstacles you may run into along the way.

Challenging for Foreign Businesses to Source Local Talent

It can be difficult for foreign businesses to reach local talent. This is particularly true if you don't have a physical presence in Guatemala. As in the U.S., many recent graduates are recruited on college campuses during career fairs. Although you can advertise on job boards, much of the tech talent in Guatemala may not use those outlets to find jobs.

Navigating Complex and Unfamiliar Labor Laws

Understanding and complying with the labor and tax laws in Guatemala are additional challenges many businesses face. When you're hiring foreign workers, you not only have to comply with U.S. regulations, but you also have to comply with the regulations of Guatemala.

Some companies try to work around this by hiring software developers as independent contractors. However, whether a worker is an employee or an independent contractor depends on the nature of their duties and relationship to their work. You can't just designate someone as an independent contractor if they don't meet the requirements. What's more, if you misclassify a worker as an independent contractor when they should be an employee, you can face stiff penalties, including back pay and benefits.

Revelo: We Find, Hire, and Manage Guatemalan Talent Compliantly for You

Working with a tech talent platform such as Revelo can eliminate the hassles of outsourcing to Guatemala. Revelo works with companies that are trying to build or increase their remote teams. You can use one platform to accomplish everything from sourcing, hiring, and paying your software developers in Guatemala.

Revelo has a pre-vetted pool of talented Guatemalan developers who are skilled in their tech stack and proficient in English, so all of the hard work is already done for you. Typically, businesses review their first candidate within 3 days and hire within 30. When you know your candidates are qualified, all you have to do is focus on finding the best fit for your team.

Where to Find and Hire Guatemalan Developers

Although it can be difficult to find Guatemalan tech talent for your business, it's not impossible. If you can't recruit directly from universities, here are some places you may have luck looking for software developers.

Tech Hubs in Guatemala

There's a big difference in the rural and city lifestyles in Guatemala. It's still primarily an agricultural nation, but there are some cities where the tech infrastructure and talent are rapidly expanding. Guatemala passed an Entrepreneurship Strengthening Law in 2018 that was designed to promote innovation and investment in businesses. With the attention of Seedstars, Guatemala is attracting the attention of tech accelerators as well.

Guatemala City

The country's capital is home to Campus Tec, a technology park. GrafiaETC and Ergocom are two companies that support Guatemalan technology and education hubs. Both are helping to build a thriving tech culture in Guatemala. Tata Consultancy Services (TCS) has chosen Guatemala for its newest Latin America location because of its talent, position, and potential.

Xela

Quetzaltenango, or Xela for short, is Guatemala's second largest city. It's much less well-known than Guatemala City. While it's not nearly as overrun with tourists as other areas, its stunning natural beauty and historical churches attract a number of visitors. There aren't as many tech businesses in Xela as in Guatemala City, but it's home to the tech startup StarkPhone and several developer tech groups.

Latin American Talent Platforms

If you don't have the resources to recruit directly nor the time to sort through and screen applicants, you may want to work with a Latin American talent platform. These companies source and pre-qualify tech talent from Latin American countries such as Guatemala for you. You'll have a pool of highly skilled candidates to choose from.

Revelo. At Revelo, our process starts with consulting with you to understand your company's goals, needs, and technical demands. Within three days, we provide you with a list of candidates who meet your exact specifications. You can look through the candidates you're provided and decide who you want to interview.

Once you've made your selection, you can start building your remote Guatemalan team. Our 14-day risk-free trial ensures you have a chance to try out a candidate before you make a commitment. You never have to worry about investing a lot of money into screening and hiring a candidate only to find that they clash with the rest of your team.

Key Takeaways

Although the tech ecosystem of Guatemala isn't as large as that of São Paulo or Mexico City, it's emerging as a source of excellent, highly qualified tech talent. Your company can build or expand its remote teams by hiring Guatemalan developers at a fraction of the price of U.S.-based developers.

Outsourcing software development to Guatemala can offer your company a lot of benefits, including:

  • Lower salaries
  • Better communication
  • Same time zone as U.S. Central Standard Time
  • English proficiency of professional developers
  • Emerging tech infrastructure and business innovation
  • Similar work and social culture compared to the U.S.

However, outsourcing to Guatemala also comes with some barriers such as:

  • Difficulty finding and recruiting tech talent
  • Unfamiliar tax and labor laws
  • Risks of noncompliance with local laws

If you decide to hire developers in Guatemala, first look for professionals in Guatemala City or Xela since these are the tech hubs. Make sure you comply with local employment laws so you don't risk misclassifying workers.

To avoid the risks and complications of nearshoring software development in Guatemala, use a tech talent platform such as Revelo. With Revelo, you can source, hire, and manage all of your remote teams on one platform. We have over one million vetted candidates who are qualified in all of the major programming languages and tech stacks. We have a very strict vetting process that only 35% of applicants pass, so you can rest assured you're getting the best developers.

Our internal team takes care of your Guatemalan team so they feel like a valued part of your organization. We provide perks such as nice workspaces and sponsor learning groups and other team-building activities. Reach out today to find out how we can help you expand your business to achieve your goals.

Need to source and hire remote software developers? Get matched with vetted candidates within 3 days.

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