Nearshore software development outsourcing is becoming increasingly popular amongst companies in the United States, as it provides access to a large talent pool of skilled developers at approximately 50% of the cost of hiring domestically. But what should you expect to pay when hiring nearshore software developers?
That depends on three primary factors:
As is the case with all developers regardless of geography, the primary factor driving the cost of nearshore software developers is level of experience and technical abilities. Generally speaking, developers fall into one of four levels that roughly correlate with years of experience:
Entire books have been written on properly defining the roles, responsibilities, and capabilities of developers at each of these stages, but we’ll try to keep it brief by providing a simple description. If you want to read more, check out FullStack’s career paths document.
A Junior Software Engineer (JSE) is a hardworking individual with the ability to develop software in one or more areas of focus. A JSE is capable of taking a specified task describing a software behavior and executing that task independently. They demonstrate ownership of assigned tasks, ensuring that they produce a successful result in improving an application.
A Mid-Level Software Engineer (MSE) is a dedicated individual with the ability to develop software across the full stack in one or more areas of focus. A MSE is capable of taking a specified epic describing a software feature and executing that epic independently. They demonstrate ownership of assigned epics, ensuring that they produce a successful result in providing value to a project stakeholder.
A Senior Software Engineer (SSE) is an experienced individual with the ability to develop software across the full stack in two or more areas of focus. A SSE is capable of taking on a specified software project and executing that project independently. They demonstrate ownership of assigned projects, ensuring that they produce a successful result in providing value to project stakeholders.
A Software Architect (SA) is a highly-experienced individual with the ability to develop software across the full stack in a variety of focus areas. An SA is capable of designing and engineering a complex software system. They demonstrate ownership of multiple projects, ensuring that the teams they support are successful in all aspects of their projects, including functionality, performance, security, and value delivery.
Poor communication is a leading cause of failed software projects. Software is extremely complex, so it's imperative that everyone involved — stakeholders, product owners, designers, developers, project managers, quality assurance, and users — be able to properly communicate with one another and agree on what will be built. Because of this, nearshore software developers who speak English fluently typically can demand a premium to developers who may have equal technical skills but don't speak English. So expect English abilities to influence the final price that you pay.
Geographic location can affect the hourly rates of nearshore software developers in two ways. First is the time zone. Countries like Mexico, Costa Rica, and Colombia, which line up exactly with USA business hours, tend to demand a premium over countries like Brazil, which are five hours ahead of the west coast of the USA.
You can learn more about the advantages and disadvantages of engaging with Latin American development teams in this article.
Second is cost of living. Certain Latin American countries have a much higher cost of living than others, so nearshore software developers in these more expensive countries tend to charge more than developers in countries with a lower cost of living.
Here's how Numbeo breaks down the cost of living in Latin American countries on its scale of 21 (lowest cost of living) to 91 (highest cost of living).
Taking all of these factors into consideration, here are the average hourly rates for nearshore software developers:
But these numbers may fall by 25% or more depending on the location and English proficiency of the developer.
Engaging with a nearshore software development company is a great way to improve efficiency and innovation within your organization. There are many factors that influence pricing, and it’s important that you get the right type of consultancy for your project. If you're ready to boost your projects, get in touch with one of our experts.
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