It’s a world driven by technology—and the demand for skilled IT professionals far exceeds the supply. According to the US Bureau of Labor Statistics, employment of software developers and programmers is projected to grow 25 percent from 2022 to 2032, much faster than the average for all occupations. Similarly, in Canada, the demand for IT professionals is expected to grow by 16.3% from 2019 to 2029, with employment reaching an estimated 1.4 million by 2029.
While the demand is high, the supply is limited. This talent shortage is causing significant challenges for businesses across industries in both the US and Canada.
To address these talent gaps, businesses are turning to IT staff augmentation.
But what is IT staff augmentation and how does it work? How can nearshore IT staff augmentation make more sense for businesses in North America than other staffing strategies?
Let’s explore that in today’s entry.
IT staff augmentation is a strategic approach to addressing IT resource needs by bringing in experienced IT professionals from other countries on a temporary or project-based basis. It may take many forms, from onshore outsourcing to nearshore to offshore. But whatever the form may be, remote work is always part of the arrangement—you do not have to move physically from your country or city.
Onshore IT staff augmentation means obtaining the services of an individual or business outside of the company but within the country. This approach may not be as cost-effective as the other two.
Offshore outsourcing means taking the services of an entity from faraway foreign countries—like Asian countries for the US and Canada. While this approach may be cost-effective, the quality of the work is not as always expected. Also, the time zone differences may turn some employers off.
Nearshore staff augmentation refers to hiring an individual from a foreign country with a similar (or almost similar) time zone. This could be the most workable approach for North American businesses—it is cost-effective, falls within the same time zones, and the quality is the same as at home.
In the case of the US and Canada, IT professionals from Latin America (LATAM) would make the most sense. Why?
We’ll discuss it in detail in the coming sections, but for starters, their tech expertise is at par with professionals at home. Secondly, they’re more affordable. Lastly, it’s almost the same time zone, so there are no scheduling issues.
More on this later. For now, let’s talk about some types of IT staff augmentation models.
In many ways. One way is to explore freelance platforms and filter through the results to find your desired talent. But this is more like a trial and error approach—you may have to spend hundreds of hours sifting through the applications to find your tech resource.
There’s also the option of advertising the job on employment websites. But it’s almost the same as the first option.
Then there’s the safe option—by letting the experts in the trade take care of it. Depending upon your requirements, you can consult offshore, onshore, or nearshore staff augmentation companies, like DevEngine, to build the team for you.
At DevEngine, we build teams of LATM IT professionals for businesses in Canada and the United States. But why LATAM after all?
We already briefly discussed it, but here’s more on the subject.
Latin America boasts a robust IT education system that nurtures a steady pipeline of skilled IT professionals. Per a 2022 report by HolonIQ, South America is home to over 2,000 universities and technical institutes offering IT programs, producing over 500,000 IT graduates annually.
Here’s a snapshot of the number of IT professionals in South America country-wise.
To quote Forbes verbatim, “LATAM is primed to be the next Silicon Valley.”
This is due to two reasons.
One, governments across LATAM are actively investing in the IT sector, recognizing its potential to drive economic growth and innovation. According to the Inter-American Development Bank, IT investment in LATAM reached $86 billion in 2022, representing an increase of 10% from 2021.
For instance, Argentina’s government has allocated over $1 billion to promote IT development in the country, focusing on infrastructure upgrades, digital transformation initiatives, and startup support. Similarly, Chile has emerged as a regional leader in digital innovation, with government-backed programs investing over $500 million annually in IT initiatives, including startup accelerators and technology transfer programs.
Two, the funding from non-governmental sources. Per Crunchbase data, in 2022, VC investors poured to the tune of $19.5 billion into the LATAM region. This means more opportunities for startups to attract talent, more investments in IT education, and more effort by IT professionals to hone their skills.
LATAM IT professionals possess a wide range of specializations, catering to the diverse needs of businesses in various tech fields. According to a 2022 study by IDC, the demand for IT professionals in LATAM is expected to grow by 15% in 2023, with a particular focus on software development, data science, and cybersecurity.
LATAM boasts a strong pool of software developers with expertise in various programming languages, frameworks, and methodologies. The region is home to over 1.2 million software developers, with a concentration in countries like Brazil, Mexico, and Argentina.
In the data engineering landscape, the IT workforce from South America offers expertise in data analytics, machine learning, and artificial intelligence, with a growing concentration in countries like Brazil, Chile, and Colombia.
Other than the technical expertise that LATAM IT professionals possess, here are some other reasons why businesses in the US and Canada should consider LATAM talent for IT staff augmentation over offshore outsourcing:
LATAM offers a cost-effective alternative to North American IT talent. Considering IT staff augmentation from Latin America, businesses can optimize their IT budgets without compromising quality. Labor costs in LATAM are generally lower than in North America, particularly in IT-related fields. This cost-effectiveness can be particularly beneficial for businesses with tight IT budgets or those seeking to expand their IT capabilities without significantly increasing their overall expenses.
Going hand in hand with affordability is the LATAM’s proximity to North America. It provides geographical convenience, facilitating seamless collaboration and communication between IT teams in both regions. The shared time zones between LATAM and North America minimize scheduling conflicts and enable real-time coordination, ensuring smooth project execution.
Lastly, compared to offshore, LATAM shares cultural similarities with North America. IT professionals from South America readily integrate into North American business cultures, understanding work ethics, communication styles, and project management approaches.
While LATAM-centric IT staff augmentation presents a strategic approach to addressing IT resource requirements, it is wise to acknowledge and address potential challenges that may arise.
Reputable IT staff augmentation providers take proactive measures to ensure seamless integration and mitigate potential challenges. Businesses should partner with providers who rigorously assess language fluency and demonstrate a strong understanding of cultural norms to address integration and cultural differences.
Secondly, communication. Effective communication and collaboration are achieved through establishing regular communication channels, utilizing project management tools, and encouraging open communication. Strong project management practices involve clearly defining project objectives, conducting regular status meetings, and providing ongoing feedback to augmented team members.
Lastly, security and compliance are paramount, requiring companies to partner with providers who adhere to stringent standards, conduct thorough background checks, implement robust data security protocols, and ensure compliance with all relevant regulations.
Working with DevEngine, you do not have to worry about any of the above—we take care of it for you.
DevEngine is a nearshore IT staff augmentation company that provides businesses with access to a pool of pre-vetted and experienced IT professionals from Latin America.
We offer a variety of engagement models, including contract, permanent, and fractional placements. In addition, our “Build, Operate, Transfer” (BOT) solution allows companies to build, operate, and then transfer ownership of a remote team to their own company.
Our pricing is upfront and transparent, with a variety of startup-friendly pricing options. We rigorously test and vet profiles to ensure that only those right for the job come your way. Also, we take care of background checks, insurance, hardware requirements, vacation day tracking, simple invoicing, and cross-border payments.
If you’re looking for a reliable and cost-effective way to augment your IT team, schedule a call with one of our experts today, and let’s build the team that you need.