Tech Offshore Hiring Has Gone Overdrive

In the past Years ago, Sebastián, a developer from Ecuador, has received more LinkedIn messages from recruiters trying to poach him than ever before. One specific message caught his eye: It was from a Miami-based delivery startup. Sebastián, who asked not to use his last name so as not to jeopardize his current job, was excited about the potential growth opportunity.

“I’d like to know how companies in the United States operate, how things are done there,” he says. Many other experienced developers outside the US have seen increasing demand from US tech companies as the rise of remote working and talent shortages in the US have fueled the search for more globalized teams.

a 2022 report from technology services company Commit estimated that software development role offshoring would increase by 70 percent over the next year. Some companies, such as Coinbase and Shopify, have already aggressively hired outside the US to fill open tech positions. “Software developers will be the first global role,” said Alex Bouaziz, the CEO of Deel, a startup that provides remote payroll and recruiting services. His company saw a 50 percent increase in the number of US-based customers hiring abroad by 2022.

In the past, companies had access to a larger pool of talent by strategically building offices in secondary markets. “It was usually like we have an HQ1, then we pick one market and build HQ2,” said Dylan Serota, co-founder of Terminal, a company that connects developers in Latin America, Spain and Poland with startups in places like the US and Poland. UK. Terminal provides the infrastructure to provide benefits and pay local taxes, something many smaller companies don’t have the resources to do. The rise of telecommuting has encouraged companies to rethink their approach to talent in ways they hadn’t previously considered, Serota says.

To facilitate this process, companies such as Terminal and Telescoped audit developers and startups and then provide benefits such as health insurance, pay local taxes on behalf of the developers, and ensure that the developers receive perks like paid time off and equity. “About 80 percent of the developers we work with have shares in the startups they work with,” Serota says.

Many new employees come from countries such as the Philippines, Argentina, Brazil and India. While tech companies that have long sought markets to cheaply staff call centers, content moderator positions and IT departments, are now tracking talent to fill open positions in one of their teams. “We used to think of this as a cost arbitrage story — you rent in Mexico or India because it’s cheaper,” said Jimit Arora, a partner at research firm Everest Group. “Now I see this as a story about talent arbitrage. You go where the talent is.”

Latin American talent in particular has attracted the attention of US companies. The region shares time zones with the US, and by seeking talent in cities like Mexico City or Bogota, startups can “avoid competing for talent in places like San Francisco,” Bouaziz says. It’s also significantly cheaper: The average monthly salary for a software engineer in Mexico is $3,165, according to Coding Link:, a platform that connects Latin American talent with American technology companies. That is about one fifth of the salary from a software engineer in San Francisco. The war in Ukraine, which important node for IT outsourcing, this trend has also accelerated, according to Serota. As workers have been forced to flee their homes or fight the Russian invasion, foreign companies have sought new places to outsource their jobs, and Serota says demand has quickly shifted to Latin America, as well as some other markets in Eastern Europe. Europe.

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