Software Development Outsourcing to Mexico: Reasons to Consider
Updated – January 13, 2023
A couple of Mexican cities are considered “the Silicon Valley” . 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.
Key Reasons for IT Outsourcing to Mexico
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 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. Affordable software developer salary in Mexico
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.
4. 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
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 – US (also Canada) often choose to opt for nearshore software development in Mexico, 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.
The Average Mexican vs USA Developer Salaries for the Most Popular Programming Languages
- 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.
- 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.
- The software developer salary in Mexico, if you are an Angular developer, will be $10,000 yearly while in the US, the same specialists earn $117,000.
- Mexico software developer salary for Flutter developers is approximately $16,500 annually.
- If you are a Magento developer, your salary will be $9,334 per year while the same specialist in the US makes $115,000
- Software developer salary Mexico for Node.js technology is about $13,000 while in the US Node.js developer earns $121,332
- Unity software developer salary in Mexico is approximately $12,300.
- Scala software developer salary in Mexico is $15,800 on average while in the US the same specialists earn $135,000
- A Salesforce developer in Mexico earns on average $10,500, while in America, specialists on this technology earn $120,000.
- Front-end developer salary Mexico is approximately $10,332 yearly.
- As for Back-end developers, in Mexico, they earn $11,700, while in the US salary increases to $119,000.
Now, let’s see the difference in the salaries of developers specializing in top technologies in 2021:
Software Developer Salary in Mexico vs USA: Trending Technologies
|AI and Machine Learning||$24,005||$102,900|
|Full Stack Development||$14,420||$106,540|
|Robotic Process Automation||$12,200||$103,350|
- 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.
As you can see US rates are much higher tan Mexican ones, so it is a great idea for US companies opt for nearshore software development in Mexico.
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:
|The average salary||$15,562||$10,700||$19,500||$10,690|
|Tech stack||PHP, Java, .NET, Python, Ruby||Java,Groovy, PHP||PHP, ASP.NET, Java||Python, Java, Dart|
|Top IT companies with offices in the country||Microsoft, Oracle, IBM, Facebook, Cisco, DELL||Google, Paypal||Microsoft, 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.
Outsourcing to Mexico Pros and Cons
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 of offshore or nearshore Mexico outsourcing:
- 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. It is a good idea for US to choose nearshore software development in Mexico.
- 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 offshore or nearshore Mexico outsourcing 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.
Nearshore Software Development in Mexico: Which Countries Can Take Benefit of It?
Nearshore software development in Mexico will be a great chance to fulfill your company with a skillful workforce for American and Canadian companies. As we compared the above software developer salary in Mexico and in the USA have a huge difference, but the quality of service is on the same level or even higher.
Let’s take a closer look at what benefits can bring nearshore software development in Mexico to nearby countries:
- Convenient time zone
While time zone differences may appear insignificant in the context of software development, they actually play a crucial role. There are very few opportunities for overlapping when a US company collaborates with a development team operating in a vastly different time zone: the overseas team sleeps while the US team works, and vice versa. That presents a problem when scheduling meetings or holding impromptu calls to resolve last-minute issues.
- Affordable rates
Software engineers typically earn up to twice as much per hour in Mexico as they do in the United States. The cause: lower costs of living and lower taxes as a whole. Mexico is therefore a top choice for businesses looking to reduce app development costs and maximize expenses without sacrificing product quality.
- Skillful Developers
Due to its proximity, which ensures that there will be no cultural, language, or time barriers that could impede the project, Mexico is an excellent choice for American businesses. All of this is why you should think about hiring a Mexican development company and why the country is such a good fit for American businesses looking to upgrade their digital capabilities.
- Developed IT Infrastructure
Mexico has made significant financial and time investments in enhancing certain regions’ infrastructure. The residents of these areas were given the opportunity to compete for international IT outsourcing opportunities when these IT clusters, as they are known, were established. There are 38 of these clusters right now, and more are being planned.
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:
- Offshore developers rates advantages.
- Several advanced tech cities.
- Compliance with modern customers’ needs.
- Synchronization with the world’s trends.
- A large number of successful projects.
- Easy traveling and real-time cooperation.
- Numerous R&D centers.
- High IT industry revenue.
- 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?”, guides about software development markets in Ukraine, Poland, Kazakhstan, Romania, Philippines, Costa Rica, Georgia, Armenia and Argentina, and also check India vs Ukraine and Asia vs Eastern Europe guides.
In case you need a consultation on the topic, feel free to contact us to schedule a call with our qualified professionals.