Your own nearshore SaaS development
Better than nearshoring or hiring SaaS developers โ build your own nearshore development center with Alcor and get:
- Silicon Valley-caliber team from 0 to 100 SaaS developers in 1 yearย
- Up to 40% cost savings compared to traditional outsourcersย
- Employer of Record serviceโour compliant employment solutionย
- Zero buy-out costโit’s your own software team
- No intermediary in SaaS development management, your corporate culture
Mexico
Colombia
Argentina
Chile
Poland
Romania
Ukraine
BulgariaYour Own Up and Running Nearshore SaaS Development Team of
developers in 1 month
Can a Nearshore Outsourcing Partner Guarantee You?
Silicon Valley-Caliber Talent
Hire top 10% of local software developers
2.5 years
Average tenure of developers
Zero Launch Cost & Risk
No setup fees, no legal entity needed, liability shield
Full Integration
Your team, your culture, your practices
Exceptional dedication
Itโs literally your own team
Zero Buyout Cost
Insource your team to your entity at no cost at any timeWe Hire Any Offshore Experts
Key Things About Nearshoring SaaS Development
Nearshore vs onshore model comparison
When it comes to expanding your team, choosing between onshoring vs nearshoring boils down to two key factors: talent availability and cost efficiency.
Finding the right people onshore can be a bit of a hunt. Reports show that about 70% of American employers struggle to fill roles. As of March 2024, there were 438,000 active tech job postings, making it tough to hire top talent at home. This is where nearshoring becomes advantageous, opening doors to bigger talent pools abroad โ for instance, Latin America alone hosts 1.75 million software engineers with a wide variety of tech stacks, including rare skills. By nearshoring to this region, American tech companies get a chance to reduce their time-to-hire by about 40%, therefore accelerating their expansion and product development.ย
Onshoring offers instant and smooth communication, strong cultural alignment, and control over your development teamโbut it often comes with a hefty price tag. Think of high rent, taxes, and developer salaries, especially in tech hubs like Silicon Valley. For instance, the median salary of a Software-as-a-service Developer in the States constitutes about $140,000 a year. Compare it to their counterparts in Latin America, who often charge 3-4 times less for the same services. No wonder many tech businesses eye nearshoring as a way to trim costs โ a whopping 87% of them, in fact! Major players like Google, Amazon, Microsoft, Cisco, and Oracle are already reaping the benefits of their LATAM R&D centersโwhy not consider joining them?ย
When should you not choose nearshore SaaS development outsourcing?
Here are a few signs that indicate that:
You want to scale your software application on a foreign tech market and save costs
The first mistake of tech companies is to think that IT outsourcing agencies will quickly develop or improve their products at a fraction of the price. While in reality, the situation is the opposite. First of all, this strategy presupposes that you will neither have direct access to your Saas team nor control over the development process. The result? Poor communication with developers and below-expected quality of end application due to the lack of feedback. Plus, with IT outsourcing agencies you never know the true price composition โ a providerโs fee may exceed a developerโs salary. And who wants to overpay that much?
You plan to attract investments
If youโre on a mission to get funding, delegating your application development project to a nearshore SaaS outsourcing partner is a bad idea. Why? Because itโs a signal to investors that you lack in-house expertise and resources to develop this product, which will negatively affect their funding decision since they prioritize not only the tech product but also the team that developed it. So, it makes more sense to invest in your own software R&D team.ย
Just have a look at UiPath that was able to go public, raising $1.3 billion in IPO thanks to its R&D centers that accelerated its innovation and rapid growth. Another vivid example is ThredUP that raised $300 million thanks to its R&D efforts to scale its technology with ML technology. Or People.ai that raised $100 million in venture funding thanks to its R&D teams that build the core technology that powers People.aiโs sales and marketing analytics.
Take UiPath, for instanceโthey went public, raising $1.3 billion in an IPO, driven by their R&D centersโ innovation. Then thereโs ThredUP, which raised $300 million by scaling its platform with ML technology. People.ai also secured $100 million in venture funding, thanks to their R&D teams that built the core tech behind their sales and marketing analytics.
You want to keep core operations in-house
No one wants their source code and sensitive data to be leaked and their IP rights compromised, thatโs for sure. And this might happen if you work with IT outsourcing providers. Plus, if you choose to build an R&D team over the cooperation with an outsourced one, youโll be able to promote your corporate culture, align all processes, and eventually grow a strong crew filled with driven like-minded software developers who are ready to go to lengths for your company and product.
Top countries for nearshore SaaS development
Mexico
Mexico is one of the most popular destinations for SaaS development nearshoring. The countryโs talent pool amounts to over 700,000 software developers. They rank 3rd in LATAM for tech skills and excel in various technologies and programming languages, including JavaScript, Python, SQL, C#, React.js, and Angular. Mexicoโs IT infrastructure is flourishing, with 38 IT clusters, about 500 service companies, and more than 1,153 startups spread across three major tech hubs: Mexico City, Monterrey, and Guadalajara, often referred to as the Silicon Valley of Latin America.
Colombia
Colombia is home to a thriving tech ecosystem, boasting a talent pool of over 150,000 software developers. Annually, it adds around 13,000 tech graduates to its workforce. Colombian software engineers are highly skilled, being in the top 5 best software developers in LATAM in terms of data science and technology skills. They specialize in JavaScript, Python, C#, SQL, and Ruby, which is ideal for building a Saas development team. The countryโs ICT market is vibrant, with over 1,720 startups spanning 31 distinct sectors. The country hosts three dynamic tech hubs, namely Bogotรก, Medellรญn, and Cali.
Argentina
The Argentinian tech landscape houses over 115,000 tech talents who stand out in the region for their most robust English proficiency. Local tech wizards shine in Python, Cloud APIs, TensorFlow, SQL and rank among South Americaโs top mobile developers and data analysts. They are also in the top 5 best data science engineers in the region. Buenos Aires, Cรณrdoba, and Mendoza are focal points for Argentinaโs tech scene, boasting 11 unicorns and over 17 IT clusters.
Chile
Chile boasts a tech talent pool of 61,000 software developers, with 5,000 ICT graduates joining the workforce each year. IT experts in Chile rank #2 in Latin America for data science skills and #4 for tech skills, showcasing strong expertise in Java, Python, and PHP, as well as proficiency in data analytics, mobile development, and statistical programming. Around 609 startups and 162 software development companies call Chile their home. The countryโs tech landscape includes three active tech hotspots: Santiago, Valparaรญso, and Concepciรณn.ย
Uruguay
Uruguayan programmers lead in Latin America for tech skills. Known for expertise in Python, .NET, and Swift, they also shine in data analysis, mobile development, and computer networking. Strong in foreign languages, Uruguayan developers rank #4 in Latin America for English proficiency. What draws foreign tech companies even more to this destination is Uruguayโs developerโs salaries, some of the lowest in the region, a 100% digital telecom network, stable economic and political environment, and excellent perks like 35% credit for R&D expenses.
Local developersโ salaries
What about the salary rates? Here is what Senior engineers with 5+ years of experience earn in different domains:
AI
- Artificial intelligence engineers in Mexico and Chile have some of the highest wages in the region, earning over $63,000 a year on average.ย ย
- Meanwhile, Senior AI developers in Colombia, Argentina, and Uruguay earn a bit less – around $60,000 per annum.
Blockchainย
- Mexico offers the most generous wages for blockchain developers in the region at $68,000 per year.ย
- Colombia and Chile follow with annual salaries of $62,500 and $61,000, respectively.
- Meanwhile, Argentinian and Uruguayan developers earn the least – $60,000 per year.ย
Cloudย
- Both Mexico and Argentina provide their cloud developers with $68,500 a year.ย ย
- Chilean developers, in turn, charge around $65,000, while Uruguayan cloud experts demand around $62,000 annually.
- Colombian cloud professionals have the lowest annual wage – $54,000.ย
Business Intelligenceย
- Business Intelligence developers in Mexico get the highest rewards in the region, reaching $58,000 per year.
- They are followed by Argentinian and Uruguayan developers who earn about $54,000, and then come Chilean and Colombian BI experts who receive $48,000 annually.
Machine Learning
- Senior ML engineers from Mexico, Colombia, and Chile earn approximately $60,000 a year.ย
- Uruguayan and Argentinian ML engineers have more modest annual rates which reach about $57,000 per annum.ย
What is a nearshore development center?
A nearshore SaaS development center is your dedicated remote office with your own team of software engineers. Imagine it as an extended piece of your in-house puzzle which supplements you with top-tier tech talents, optimizes your budget, and accelerates your product development. Usually, tech companies establish such centers in foreign locations with an abundance of talent and lower labor costs such as Latin America.ย
A reliable local partner like Alcor offers a 360ยฐ nearshore software SaaS development center solution to streamline your expansion. Itโs made up of three components.
Firstly, tech recruitment handles every step of the hiring process to find perfect fits in your team. Next, Employer of Record services take care of onboarding/offboarding of hires, legal compliance, payroll, and benefits management. And the icing on the cake โ operational support. From office leasing and procuring tech equipment to employer branding and WFH assistance, ensuring every detail is covered. All this is possible without setting up your legal entity abroad โ ask Sift, Ledger, Dotmatics, and other companies!ย ย ย
In comparison with IT outsourcing, where you completely delegate your product development to a third-party team and have no direct control over it, your own nearshore SaaS development center presupposes the hiring and retaining of the right talent without any buy-out fees, forgetting about operational functions that fall on your partnerโs shoulders, and, thus, scaling in a chosen location faster.
Advantages of hiring nearshore SaaS developers
Nearshore SaaS development in Latin America is a popular choice among US tech businesses due to:
- Skilled talent poolย ย
When seeking nearshore SaaS developers for hire in Latin America, youโre sure to find top talent. These software developers get a high-quality STEM education, with 30 regional universities featured in the 2024 QS World University Rankings. LATAM programmers are proficient in cutting-edge technologies like .Net, Java, Ruby, Python, C++, C#, React, and Node.js, excelling in mobile development, data analytics, cloud computing, database development, and operating systems. Plus, they bring multilingual strengths, with Argentina, Uruguay, and Chile leading in English proficiency. When it comes to tech talent, Latin American developers truly offer the full package!
- Slashed costsย
Another advantage of nearshore SaaS development solutions is cost efficiency. Software engineers from Mexico, Colombia, Argentina, and other Latin American countries charge significantly less for their services. Letโs put annual salaries side by side: A Full-Stack developer in the US can rake in up to $104K, whereas their counterparts in Latin America typically earn an average of $38K-$42K annually.
- Minor time zone differenceย
The time gap between the US West Coast and Mexico is merely an hour, while it extends to two hours with Colombia. Further south, thereโs a three-hour difference with Chile and four with Argentina. Uruguay also has a four-hour difference from the US West Coast. Long story short, youโll benefit from prompt answers to your requests and convenient meeting scheduling.
Disadvantages of hiring nearshore SaaS developers
However, working with nearshore SaaS programmers may pose certain disadvantages, such as:
- Complex labor laws
Each country in Latin America has its own labor laws that impact business operations. In Colombia, Mexico, and Argentina, the workweek is 48 hours, while in Chile, itโs 45. Overtime pay also varies: Mexico requires employers to pay double for work performed after official working hours (triple after nine hours), Argentina โ 150% (200% on holidays), and Colombia permits 12 hours of overtime weekly at 25% extra pay. Public holidays also differ, ranging from 8 to 18 days across these countries, not to mention the differences in employment and taxation. Yet with proper guidance from professional lawyers, tech companies navigate these legal complexities without any problems.ย
- Data protection issuesย
1 in 5 companies is susceptible to data breaches from remote work vulnerabilities. Weak security protocols, accessing data from unauthorized networks, or lacking cybersecurity awareness can endanger any business. However, if you consider Latin America for software nearshoring, prioritize safeguarding your digital assets from the start. For example, a professional software R&D center partner will provide you with IT infrastructure setup and cybersecurity services.
Your Own SaaS Team is Better than Third-party
Alcor is an all-in-one place to establish and run a turnkey software R&D center:
- Employer of Record support โ no need to set up your legal entity
- From 0 to 100 software developers in one key talent pool
- Establish your corporate culture with your own team. No intermediary
- No buy-out or other hidden fees
Own R&D Center vs Nearshore Software Development
Own R&D center
- Maximized cost savings Your own SaaS developers cost 40% less than an outsourced software team. Because you get no buy-out fees & markups.
- Long-term commitment Product development and a sense of ownership attract professional developers as bees to honey. Hence, more loyalty.
- Direct control over development You get your team of nearshore SaaS developers for ideation, innovation, and growthโwithout intermediaries.
- Intellectual property under control With direct agreements, you fully own your product and its source code, keeping unique engineering expertise in-house.
- Easy investment attraction Establishing your own R&D center with a dedicated team will enhance your appeal to investors.
Nearshore outsourcing
- Cloudy pricing With outsourcers, the markup for your vendorโs service might exceed a SaaS developerโs salary by 50%.
- Temporary fix Nearshore SaaS development services teams are loyal as long as the contract lasts and wonโt go the extra mile to ensure your productโs long-term success.
- Your provider comes first An external SaaS development team will report only to your vendor, treating you as the โsecondaryโ employer.
- IP rights transfer complexities When you engage a nearshore SaaS development service company, the IP rights of your product initially belong to the outsourcing team. So think ahead about the safe transferring of them to you later.
- Barrier to investment attraction Engaging with a nearshore SaaS development partner means that you delegate your core competencies to developers who will leave your team for good. Not exactly the investorโs dream.
Companies Scaling with Alcor
Alcor is a reliable partner that meets our hiring needs. We finally hired experienced software engineers in Eastern Europe with strong tech skills and business acumen. Account Managers are awesome!
With Alcor’s all-in-one solution, we got a software R&D office with 15 senior PHP devs and a compliant operational coverage. I really appreciated their transparent pricing structure and deep expertise.
We interviewed a lot of EoR platforms and companies, but Alcor was the only one that provides a combo package of EoR and Recruting offerings. Alcor helped us build a full stack team in 1.5 month.
We wanted to switch from our outsourcing provider, and Alcor has become really game-changing for us. Within a mere 6 months, we got a fully-fledged team of 30 engineers in our own R&D office.
Alcorโs R&D solution eclipses full-cycle recruitment, EOR service, and operational support for our offshore team. Their ‘all-in-one place’ approach is far more cost-effective than I could’ve imagined.
I value their commitment to going the extra mile. We evolved from an outstaff project into an independent company, and Alcor’s support was crucial. They hired and ondoarded 15+ professionals for us.
Thanks to Alcor, we hired four engineers and a designer that strengthened our team. Beside stellar recruitment, Alcor flawlessly handled our payroll. Their approach was seamless and swift.
Alcor closed our 4 QA positions in a month and more than doubled the team in a year! We chose Alcor because of their communication style, cost, scope of services, and ideas to help us be successful.
FAQ
1. Is it cheaper to nearshore SaaS development?
Yes, you can save from 30% to 50%, while scaling your company at the same time. Hereโs what makes it possible: the difference in salaries & taxes and Alcorโs comprehensive all-in-one-place software R&D center solution without buy-out fees. In the US, a senior software developer earns up to $120,000 a year, while software engineering experts from Latin America make, on average, $56,500. The regional taxation policies also offer lower tax rates. Lastly, our approach goes beyond finding nearshore developers. We get you a software team thatโs yours from day one โ cut costs by not paying buy-out fees!ย
2. What are the benefits of building a nearshore SaaS development center with Alcor?
With Alcor’s 360-degree model, there’s no need to engage with multiple vendors to establish your R&D office offshore or nearshore. In one place without additional intermediaries, you receive full-cycle IT recruitment services alongside effective Employer of Record support that eliminates the need to establish your legal entity in the target location. Additionally, we assist in leasing office space, providing employee benefits, procuring laptops and other equipment for your team, and much more. Just share your needs, weโll take care of them all!ย ย
3. How fast can Alcor build a nearshore SaaS development center?
We can get your software R&D center in Latin America and Eastern Europe up and running within 2-3 months, depending on your tech talent hiring needs. But hey, here’s the kicker: we guarantee to hire a senior developer in 2-6 weeks, a lead or C-level executive in 5-8 weeks, and a team from 0 to 100 developers within a year.
4. Can you headhunt C-level management?
Thatโs an ace up our sleeve. Weโve amassed 8 years of experience in the industry and have access to an internal network of hundreds of thousands of candidates! Thatโs why, C-level management positions, such as CTO, CIO, CMO, CFO, and others, come to our recruiters as easy as pie. Our clients attest to it: we hired the Head of R&D for Sift, an online fraud detection application development firm, from the second CV. Other successful cases include the Director of Engineering for Dotmatics and the Deployment Lead for Ledger.ย
5. What is the average level of experience of nearshore SaaS developers Alcor hires?
Alcor’s team of 40 headhunters specializes in hiring Senior and Lead nearshore SaaS developers for tech companies in the USA. Typically, our tech recruiters need 2-6 weeks to find and hire perfect fits for client teams.
5. What about payroll, accounting, and office lease?
If you hire nearshore SaaS developers with Alcor, thereโs no need to establish your legal entity in a target location. With our comprehensive EoR support, we take care of all the nuts and bolts for your nearshore SaaS development team. It includes the employment of software engineers, monthly payroll management, tax payments, compliance with all local laws, and even more. With our turnkey solution, you can be assured โ we guarantee 100% compliance while handling all the paperwork.
Finally, if you want to pump it up, opt for our R&D services with full operational support, office lease, and equipment procurement.
6. What else does Alcorโs nearshore SaaS center include?
Apart from full-cycle techย recruitment of nearshore SaaS programmers and EoR support, we offer a more comprehensive range of additional services, including IT infrastructure setup, procurement management, employer branding, and other back-office assistance. Alcor is like your personal team builder: you choose the services to build your software R&D center from 0 to 100 people in 12 months.