As the Latin American tech landscape continues to expand, Colombia has emerged as a strong source of software developer expertise. With over 62,000 developers in its workforce and several universities ranked in the top 30 in Latin America, the country provides a favorable cost-to-talent ratio for North American companies attempting to expand their capabilities through outsourcing.
What Is Software Development Outsourcing?
Software development outsourcing involves hiring third parties—either individuals or companies—to handle all or part of the software development process. Businesses often employ this strategy to streamline their operations by reducing overhead costs related to staffing and equipment.
Companies can save on labor costs and avoid the expense of training and maintaining an in-house software development team. By tapping into a global pool of professionals, businesses find experts with specific skills that are either scarce or too expensive locally. This approach also allows companies to concentrate on their primary areas of expertise while delegating software development to external specialists who deliver high-quality solutions and cover existing skill gaps on dev teams.
Benefits of Outsourcing Software Development to Colombia
While operational cost is likely the main benefit for companies when outsourcing software development to Colombia, several advantages provide more incentive to prospective partners. Due to sustained growth in the Colombian tech industry, organizations that pursue IT outsourcing initiatives typically experience several key benefits.
High Time Zone Overlap With U.S. Companies
Colombia's time zone is closely aligned with the U.S., meaning teams can work together in real time without the hassle of trying to communicate across time zones. Making changes and addressing issues as they arise saves organizational time that can instead be used for product development.
While the current work week in Colombia is 48 hours, a recently passed law will gradually lower that to 42 hours. Most businesses are open from 8:00 to 6:00, with standard lunch hours from 12:00 to 2:00. With this time zone overlap, there is typically seamless communication between the U.S. and Colombian teams.
Long Retention of Tech Talent Within Teams
Because tech hiring is not as competitive as in domestic labor markets, organizations are likely to experience higher retention due to less industry competition. The lower attrition rate among Colombian software engineers also saves companies time and money that would otherwise be lost to high employee turnover.
Robust IT Infrastructure
With both foreign and domestic entities investing in Colombia's growing IT sector, it now boasts several thousand tech companies, including giants such as Microsoft, Qualtrics, IBM, and Hubspot. As one of the leading suppliers of IT services in Latin America, Colombia is becoming a leader in developing custom software, mobile apps, and games.
Medellin was recently crowned the "Smartest City in the World" because of its extensive use of artificial intelligence in applications such as driverless cars. It's known as the Silicon Valley of LatAm and is home to Ruta N, which helps incubate local startups. This growing infrastructure has created an extensive talent pool for outsourcing services and staff augmentation.
Growing Talent Pool as a Result of Increased Training in Engineering
Across several of its top universities, Colombia focuses on a project-based and collaborative approach to education, which is a boon to software companies that seek these skills. Their STEM education is based on an interactive, problem-focused model that trains skilled developers to be experienced problem solvers.
Colombia is home to strong postsecondary tech schools such as the Technological University of Pereira and the Pedagogical and Technological University of Colombia. In addition to graduating a large number of Ph.D. software engineers, these tech-specific schools train students in all aspects of web development, data analysis, and project management.
Competitive Labor Cost
The average annual salary for Colombian software developers is around 6 million COP per month or $17,516 USD yearly. The average salary of a software developer in the United States, on the other hand, is about $153,000 USD. The exact amount depends on various factors, but it is more cost-effective to hire Colombian software developers due to the difference in cost of living between the two countries.
Increasingly English-speaking Workforce
Communication is essential for development teams, particularly those that work remotely—sharing a common language eliminates several potential issues in the development process. Larger cities such as Bogotá and Medellin contain more English speakers than smaller cities and towns. As nearshore options in Latin American countries continue to expand, English proficiency is expected to grow.
Challenges of Outsourcing Software Development to Colombia
Although there are many upsides to outsourcing to Colombia, there are also some unique challenges. While Colombia is largely stable, it has some notable volatility. The labor laws can also be complex, so it's important to consult an expert before considering Colombia as an outsourcing destination.
Colombian Labor Laws
While hiring contractors in Colombia is legal, the labor laws can be complex. Hefty penalties for misclassifying contract workers leave companies open to large fines and possible litigation. Like the U.S., the Colombian government considers several factors when determining whether a developer is an employee or an independent contractor. However, there are differences in the types of factors that are considered. In Colombia, some conditions that differentiate between workers and contract employees include:
- Control over how the work is performed
- Control over working hours
- Method of payment
Regional Instability
Factors such as regional security concerns, fluctuations in government policy, and civil unrest may disrupt operations, leading to uncertainties in the business environment. Companies may face difficulties ensuring continuous service delivery and should implement contingency plans. However, due to the digital nature of software development, most supply chain issues don’t typically affect hiring remote developers.
Costs When Hiring Colombian Software Developers
Aside from salary, there are several additional costs that employers must consider before hiring Colombian software developers. While these costs are still lower than those typically found in domestic hiring, it’s important that technical leadership and hiring teams understand the following cost considerations, including:
- Sourcing talent
- Vetting potential candidates for skill match
- Onboarding costs
- Benefits administration
- Local compliance
- Global payroll management
Average Cost to Hire Software Developers in Colombia
Without the specifications of an outsourcing project, it’s difficult to calculate the exact cost of hiring Colombian developers. However, it’s typical that the most expensive aspect is the employee salary. Based on their years of experience, Colombian software developers fall into one of the following categories:
- Junior software developers in Colombia make approximately $8,640 annually and typically focus on basic coding skills and maintaining existing software.
- Mid-level software developers in Colombia, who have a more solid technical foundation in several programming languages, make around $31,680 per year.
- Senior software developers in Colombia who lead teams and design architecture make about $43,200 annually.
While the cost of living in Colombia dictates a low salary, employers must ensure that they are legally compliant when outsourcing software development services to Colombia. Project costs, such as infrastructure and technology upgrades, training, or communication tools, may also add further expenses.
Use a Talent Marketplace to Hire Developers in Colombia
Companies use several different methods to hire software developers in Colombia, though some require much more administrative effort, money, and organizational resources. For example, in domestic hiring, some companies prefer to post positions on job boards and conduct traditional searches for Colombian candidates.
However, hiring teams must consider challenges such as skill assessment, payroll issues, and local compliance to avoid costly fines or legal action. Software outsourcing companies provide an answer to some of those issues, but it’s often difficult for the primary company to vet and ensure quality from each individual developer in the outsourcing company. Additionally, the outsourcing company could have several projects for other clients, which may lead to long-term quality issues.
Due to the complexities associated with international hiring and the need to ensure a skills match, companies often use talent marketplaces. Typically viewed as strategic talent acquisition partners, talent marketplaces provide access to a pool of skilled candidates. By eliminating the need for sourcing, recruiting, and assessment, talent marketplaces like Revelo provide value to partner companies through a more customized and streamlined hiring process.
Hire Software Developers in Colombia With Revelo
Outsourcing software development to Colombia helps companies gain a competitive advantage while reducing operational costs, but there are challenges and risks associated with a global workforce. At Revelo, we simplify international hiring and match you with time zone-aligned developers from a pre-vetted pool of Latin American tech talent.
Revelo’s rigorous vetting process ensures that your hire has the exact skills and qualifications needed to excel on your dev team. Once you select from a shortlist of top candidates, you can interview and hire within days.
After hiring, we’ll assist in ongoing administrative tasks such as payroll, benefits administration, and local compliance—allowing you to focus resources on core business needs.
Contact us to hire developers in Colombia with the expertise to deliver high-quality, cost-effective software products.
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