Key Takeaways

• The IT outsourcing services market size in Latin America was proposed to grow by USD$33.68 billion, progressing at a CAGR of 6.61% from 2020 to 2025
• In Latin America, the number of foreign companies hiring IT experts for outsourcing projects has increased by 156%.

Introduction

Market size (value/volume) of the outsourcing market

• An industry report revealed that the IT outsourcing services market size in Latin America was projected to increase by USD$33.68 billion, progressing at a CAGR of 6.61% from 2020 to 2025.
• The top three countries in Latin America where US companies frequently outsource technical/engineering roles include Brazil, Argentina, and Mexico.
• In 2021, the Brazilian IT development market was valued at $49.5 million. This accounted for the largest share of the entire IT outsourcing market in Latin America.
• Some examples of US-based companies that chose Brazil over other countries in the IT outsourcing market in Latin America include Behemoth, IBM, Amazon, Google, Uber, Oracle, Microsoft, and Dell.
• Some US-based companies also considered outsourcing technical/engineering roles to Argentinian IT experts due to their favorable time zones, English proficiency skills, and affordable rates. These companies include Microsoft, Google, IBM, Nokia, and Cisco.
• In 2021, Brazil's outsourcing market was valued at USD$18.6 billion, Mexico at USD$12 billion, Argentina at USD$600million, and Bolivia at USD$50million.  
• Some examples of US-based companies outsourcing technical/engineering roles to Mexican IT experts are Netflix, Google‍, Microsoft, and Amazon.

 

Source

 

Recent and future growths/developments

• The remote-work revolution has led some US technology companies to consider outsourcing technical/engineering roles to experts in Latin America.
• In Latin America, the number of foreign companies hiring IT experts for outsourcing projects has increased by 156%.
• A survey by Evans Data Corp revealed that Latin America has the second-rated software engineer growth market globally.
•  Biz Latin Hub survey showed that 3 out of 4 respondents on business trends in the US States reported that they had either begun outsourcing in Latin America during the pandemic or had increased the number of projects outsourcing in the face of the global health emergency.
• The survey further revealed that 56% of the US respondents reported they would increase their outsourcing projects in Latin America, while 19% had already started outsourcing.
• Another report showed that over 40% of IT companies in Brazil are helping to facilitate the completion of outsourcing projects from US-based companies.
• In 2021, Mexican IT companies generated $60 billion in revenue, which showed an 8% growth compared to 2020.
• According to Clutch, Argentina has a strong presence in custom software development and IT consulting as well as mobile app development, web development, cloud development, and IT-managed services for outsourcing projects.
• According to a report from Statista, Brazil has nearly 500,000 engineers available to join distributed IT teams.
• A report shows that US companies are the biggest contributors to the Argentina IT sector, accounting for nearly 60% of all software outsourcing ventures.
• Industry analysis also revealed Mexico as one of the best places for outsourcing IT talent for US-based companies.
• According to Clutch, IT outsourcing in Mexico focused majorly on finance projects, consumer products and services, and telecom services. 
• Due to the increased digital transformation taking place in Latin America, more nearshoring and outsourcing opportunities will continue to erupt, which will invariably boost the market growth.

Salary/Wages Rate

• According to Glassdoor, a software developer in Mexico earns about USD$19,7593 annually.
• A survey shows that most Mexican firms specializing in IT outsourcing charge between $25-$49 hourly.
• According to PayScale, an Argentinian developer earns, on average, USD$56,000 annually.
• In Mexico, the majority of IT outsourcing companies charge between $25-$49 per hour.
• According to Salary Explorer, a software developer in Brazil earns USD$22,000 annually.
• According to Clutch, most software development firms in Brazil also charge between $25-$49 per hour.
• Another report stated that US-based software developers' hourly rate range between $70 -$100, while nearshore software developer rates in Latin America range between $45-$65 for junior, mid-level, and senior positions.

Research Strategy