Software Development Outsourcing to Mexico: Reasons to Consider

Software Development Outsourcing to Mexico: Reasons to Consider

A couple of Mexican cities are considered the Silicon Valley of Latin America. So, the country is a rapidly growing player in the world’s IT industry. Although it’s mostly known for being in the front lines of automotive and electronics spheres, Mexico is among the most popular providers of software development services, being a sought-after outsourcing destination. 

The country boasts a growing pool of experienced and highly skilled developers, and its proximity to the US combined with the lower cost of labor give Mexico a head start. Local and regional authorities saw the untapped potential of Mexican developers and decided to invest in the IT industry, promoting various programs with a focus on STEM training.  

Let’s take a look at the reasons Qubit Labs has brought together to make it easier for you to understand why outsourcing to Mexico is worth it. 

 

Key Reasons for IT Outsourcing to Mexico 

Mexico IT Ecosystem

1. Large number of software developers

The country has around 300,000+ software developers. This number has risen significantly within the last couple of years due to the government’s plan to foster technology, which resulted in producing qualified engineers. Mexico has the second-highest availability of tech talent in Latin America, as stated by a CBRE report.

Outsourcing to Mexico means getting access to skilled tech talent because the country often hosts various events, including hackathons, pitch contests, and tech festivals. They take place in Mexico’s leading tech hubs, where all talented individuals with a passion for technologies can meet and showcase their expertise. 

2. Significant amount of tech graduates 

Mexico’s universities graduate over 110,000 specialists a year, and this number is rising because the government constantly comes up with new opportunities for qualified engineers. For example, it has established a government-sponsored entrepreneur organization, INADEM. It helps tech companies and entrepreneurs in raising money for their projects and turning their ideas into reality.

When outsourcing Mexico, you can cooperate with the world’s brightest minds because local universities work hard on creating and promoting elite engineering programs. Such efforts help to produce the tech talent with the skills and knowledge required for the modern tech ecosystem. 

 

3. Reasonable developer salaries

When it comes to Mexican outsourcing, you can expect that the average Mexican developer salary will be around $15,562 per annum. This number is 60-80% lower than in the US, so you can save a significant amount of money when opting for Mexico outsource instead of hiring local software engineers.

Let’s take a look at the chart with the mid-level software developer salaries in top Mexico’s IT hubs:

  • As you can see, the programmers in Guadalajara earn the highest, $19,476 per year.
  • The country’s capital, Mexico City, is in second place, paying local developers $18,132 on average.
  • Monterrey takes third place in this ranking, with the average software developer salary of $17,544 per year.

Software Development Outsourcing to Mexico

Here is a more in-detail comparison of the average developer salaries you can expect when opting for Mexico outsourcing and the wages of US programmers:

 

The Average Mexican vs USA Developer Salaries for the Most Popular Programming Languages

Mexico USA
Python$14,020$108,085
Java$17,930$102,410
JavaScript$14,000$107,530
C#$19,390$112,950
C/C++$16,475$103,705
PHP$11,120$86,000

 

  • The average Python developer salary in Mexico is $14,020, while the same programmer earns $108,085 in the US. So, outsourcing Mexico is almost 7 times cheaper.
  • The mid-level Java developer salary in Mexico is $17,930, and the US pays $102,410 to similar professionals. This means you can save around $84,480 yearly when opting for Mexico outsourcing.
  • JavaScript developers in Mexico earn $14,000 on average. Meanwhile, programmers from the US make $107,530.
  • C# developer salary in Mexico is $19,390, while in the US, it reaches $112,950. So, Mexican outsourcing costs almost 6 times less than hiring local talent in the US.
  • The average C/C++ software engineer salary in Mexico is $16,475, and in the US—$103,705.
  • The mid-level PHP developer salary in Mexico is around $11,120 per year and $86,000 in the US. This implies that outsourcing Mexico is almost 8 times more affordable.

Now, let’s see the difference in the salaries of developers specializing in top technologies in 2021:

 

Mexican vs USA Developer Salaries for Trending Technologies

Mexican vs USA Developer Salaries

Mexico USA
AI and Machine Learning$24,005$102,900
Data Science$21,675$115,750
Full Stack Development$14,420$106,540
Robotic Process Automation$12,200$103,350 
VR/AR$19,410$97,550
Blockchain$17,850$154,550

 

  • Mexico pays $24,005 per year to the local AI and Machine Learning. Meanwhile, their salary in the US reaches $102,900. So, Mexican outsourcing can help you save up to $78,895 on a yearly basis. 
  • Data Science specialists in Mexico earn $21,675 per annum, while their US colleagues make $115,750, which is around 5 times higher than in the first country.
  • The pros and cons of doing business in Mexico have a significant benefit, represented by the salary of Full Stack developers. It reaches around $14,420, which is 7 times less compared to the US ($106,540).
  • Robotic Process Automation specialists are paid $12,200 in Mexico, while their US-based colleagues earn $103,350
  • In Mexico, VR/AR developer salary is around $19,410 per year, and in the US$97,550.
  • On average, Blockchain specialists in Mexico are paid $17,850, and in the US$154,550 per annum.

 

4. 5 major tech hubs for Mexico software development outsourcing 

When outsourcing to Mexico, you can choose between the several advanced tech hubs that are the drivers of the local IT industry; these include:

  • Mexico City (places ~65 business startups);
  • Guadalajara (places ~65 business startups);
  • Monterrey (an advanced tech hub with a high concentration of full-stack and back-end developers, QA specialists, and solution architects);
  • Tijuana (is close to Silicon Valley, offering companies to cooperate with skilled developers for lower prices compared to the US);
  • Merida (hosts a large number of Node.js and iOS developers, UI/UX designers, and four accelerators and six high-impact incubators)

The first three cities have attracted the most considerable amount of software experts, capital, and global tech companies.

 

5. Several key sectors for local startups 

Mexican startups’ key

The expertise of Mexico’s developers is multi-pronged because they are skilled enough in several critical areas of the IT industry. These include software, data, fintech, e-commerce, and retail. So, outsourcing Mexico can help you come up with high-quality products that can easily make a breakthrough in the industry and meet the needs of the customers with broad-ranging requirements.                      

 

6. Proficiency in the most commonly used languages 

Mexico outsource implies working with the world’s most popular programming languages. Since the country is making a great effort to educate and support talented developers, it makes sure their skills are sought-after both on the global and local markets. Accordingly, PHP, Java, .NET, Python, and Ruby are the most frequently used programming languages in Mexico, allowing local tech talent to be on the same page with the modern IT industry’s demands.

 

7. Globally recognized startups 

The evidence of the local tech talent proficiency is a vast number of successful startups, the products, and solutions of which are in high demand among the customers worldwide. Hence, outsourcing Mexico can help boost your company’s development. Also, foreign specialists will look at your services from a different perspective. The list of the most promising Mexico’s startups includes:

  • Clip (focused on developing mobile credit card readers);
  • Konfio (provides credit lines through an online system to SMEs);
  • Cornershop (mobile grocery delivery service);
  • Grow Mobility (e-scooter startup);
  • Billpocket (mobile PoS system)

 

8. Convenient traveling and time zone

Mexico’s time zones align with the US ones, so it’s easy to have real-time collaborations and address any issues the moment they occur. Also, the US is the second-largest Spanish-speaking country after Mexico. So, it’ll be easy for your in-house and remote employees to understand each other, avoiding language barriers. The two mentioned countries already have stable and healthy business relationships, so constant cooperation and Mexico outsourcing are helping to improve them.

Besides, there are around 100+ daily flights and more than 50 border crossings. So, you don’t have to worry about spending too much time on the road if you want to visit your team in Mexico. The country is part of the NAFTA agreement (currently called the USMCA), which eases receiving visa agreements for businesses that opt for outsourcing to Mexico.

 

9. Developed business infrastructure

The rapid advances in Mexican outsourcing significantly rely on the local government’s effort, which has implemented several initiatives to help it skyrocket. For example, there is a tech district in Guadalajara in which the authorities have invested around $20 million. 

As for Monterrey, the city houses over 30 R&D centers of global organizations, and two top Latin American universities are also located there.

The country’s capital, Mexico City, bridges North and South America due to its convenient location. Also, it has a vibrant tech community and serves as a regional base for the largest tech enterprises.  

The heavy investments in infrastructure are represented by the following projects: Guadalajara Software Center, the Apodaca Technology Park, and the Monterrey Technology Park.

 

10. Top tech companies are presented in Mexico 

The pros and cons of doing business in Mexico include one significant advantage, among others. We’re talking about the convenience of establishing R&D centers in the country thanks to the incentive programs and landing pads. Bringing together all the benefits of outsourcing to Mexico, several global companies have understood the profitability of investing in advancing their software development teams in Mexico. 

Multiple world’s leading companies have built their offices in the country and hired talented local professionals. These companies include DELL, Google, Salesforce, Microsoft, Oracle, HP, Siemens, IBM, Intel, Facebook, Apple, HP, Amazon, Accenture, Cisco, Globant, and Nielsen (and it’s not even the full list!). 

 

11. Increased IT industry revenue 

Thanks to its substantial growth over the recent years, Mexico’s IT industry provides around $38 million of revenue. The regional IT sector is expected to continue growing within the next few years. Actually, this isn’t surprising considering the local government’s efforts and emphasis on this sector’s development. 

Therefore, outsourcing to Mexico is a forward-looking decision because a lot of modern companies are starting to increase their appetite for Mexico’s tech talent.

 

12. Mexico is a prosperous IT exporter 

Another attractive incentive for the companies that consider outsourcing Mexico is the number of foreign investments in the country’s IT industry and its position on the global market. According to the United Nations, Mexico is the 10th largest IT exporter in the world and the 1st in North America as of 2019. 

 

Why Opt for Software Development Outsourcing to Mexico over Other North American Countries?

When it comes to choosing between Mexico outsource and other countries’ options, the business owners usually compare its neighboring territories. To make the task easier for you, we’ve selected the region’s advanced IT outsourcing destinations and compared them:

 

MexicoCubaCosta RicaJamaica
The average salary$15,562$10,700$19,500$10,690
Tech stackPHP, Java, .NET, Python, RubyJava,Groovy, PHPPHP, ASP.NET, JavaPython, Java, Dart
Top IT companies with offices in the countryMicrosoft, Oracle, IBM, Facebook, Cisco, DELLGoogle, PaypalMicrosoft, Intel, Hewlett Packard, IBM

 

As you can see, outsourcing Mexico is the most optimal choice because it has reasonable salaries, which are right in the middle when taking into account wages in other mentioned countries. 

Although Cuba pays lower salaries to the local developers, $10,700 per year, fewer global companies have opted for it as the country for establishing their offices. 

Costa Rica has the same sized tech stack as Mexico outsourcing offers, but local developer salaries are higher, namely $19,500 per annum.

In this case, Jamaica is the cheapest option, paying software developers around $10,690 on average. However, global IT companies don’t have their offices there, which implies the country’s loss to its competitors. 

Pros and Cons of Doing Business in Mexico

Pros and Cons of Doing Business in Mexico

Pros Cons 
  • Skilled workforce and reasonable salaries
  • A complex process of starting a business
  • Convenient geographic location
  • Corruption issues take place from time to time
  • Strong legal protections for intellectual property rights
  • Dependence on the outsourcing vendor
  • The 3rd largest trading partner of the US
  • Requesting permits might take longer than you expect
  • Favorable exchange rate
  • Unforeseen costs (like knowledge transfer and transition)

 

After thorough research on the topic, we came up with the most significant pros and cons of doing business in Mexico.

Let’s start with the advantages:

  • The country’s cities are referred to as The Silicon Valley of Latin America because it produces and offers to hire top talent. The only difference is that you can hire developers for lower costs in Mexico. 
  • Mexico is close to the US, so corporate visits won’t become a challenge for you because you can get to the country within a couple of hours.
  • The country is known for its advanced intellectual property regulations and security measures, which is a critical factor for all businesses. 
  • Last but not least, the advantages of outsourcing to Mexico include its favorable exchange rate and its status as the 3rd largest trading partner of the US.

Since there is no rose without a thorn, we should point out the disadvantages of doing business in Mexico to keep the balance.

  • Despite all the regulations, nobody canceled the bureaucracy and corruption, which significantly affect the time required for establishing a business in the country.
  • You might need to spend a certain amount of time to find the right vendor that will offer relevant terms of cooperation and give you enough room for implementing decisions and monitoring the processes.
  • Building the infrastructure for your remote office can be arduous because obtaining property permits and registration can take up several months.
  • IT projects often imply paying additional costs, and outsourcing is not an exception. Besides, since your developers will be located in another country, it usually involves subcontracting services, which are often forgotten about and appear in the most unexpected moments.

 

Key Takeaways: Top Reasons for Offshore Software Development in Mexico

Outsourcing to Mexico is a suitable choice for businesses that are looking for reliable, safe, and progressive software development partners. Having reviewed the pros and cons of doing business in Mexico, we can say that the country will give your company a competitive advantage thanks to its skilled labor force, reasonable salaries, and real-time cooperation.

To sum up, the most critical benefits of Mexican outsourcing are the following:

  1. Talent.
  2. Education.
  3. Cost advantages.
  4. Several advanced tech cities.
  5. Compliance with modern customers’ needs.
  6. Synchronization with the world’s trends.
  7. A large number of successful projects.
  8. Easy traveling and real-time cooperation.
  9. Infrastructure.
  10. Numerous R&D centers.
  11. High IT industry revenue.
  12. Leading IT exporter.

If you need more information about outsourcing, you can check out our recent article, “What are the Key Offshore Outsourcing Pros and Cons 2021?” In case you need a consultation on the topic, feel free to contact us to schedule a call with our qualified professionals. 

 

Related Articles:

Average Software Developer Salaries: Rates Comparison by Country

Full Guide on Dedicated Software Development Team Model

What are the main advantages of IT outstaffing?

How Can Startups Benefit From Offshore Software Development?

What Is ODC — Offshore Software Development Center?

How to Estimate Software Project Cost | Guide 2021

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Oksana Zabolotna
HBD at Qubit Labs
Oksana is a team leader of sales and marketing team at Qubit Labs.