Why Hire a Nearshore Software Development Team?
…if you can get your own turnkey nearshore development center from scratch in 2 months with:
- 30+ elite engineers in 3 months, 100+ in a year
- Up to 40% cost savings
- No-entity 100% compliant employment
- Fully managed back-office: payroll, benefits and more
- No buy-out costs or hidden fees
- Your direct management and corporate culture
Mexico
Colombia
Argentina
Chile
Poland
Romania
Ukraine
BulgariaYour Own Up and Running Nearshore Software Development Team
Can a Nearshore Software Team Provider Guarantee You
2.5 years
average tenure of developers
Cultural alignment
with your company values
Pricing transparency
no hidden or buy-out fees
Legal & compliance
and other needed operational support
Exceptional dedication
it’s literally your own team
Long-term partnership
shared responsibility & commitmentKey Things About a Nearshore Software Development Team
Advantages
Engaging with an external nearshore development teammay be a profitable short-term solution due to:
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Operational functions are off your shoulders
Since your provider is responsible for tech hiring (if needed), employing, as well as handling payroll, accounting, equipment procurement, and other back-office functions, you won’t need to do this yourself.
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Access to trained professionals
Providers of nearshore software development services tend to already have an internal pool of pre-vetted engineers who are ready to join your team in mere weeks. But if your vendor lacks the needed software development experts, they will recruit them the traditional way.
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Employee management flexibility
If you have changes in your product requirements or business needs, your provider will rather quickly upsize or downsize a nearshore software development team. Plus, if you work with a reliable firm, they will provide you with a candidate replacement guarantee.
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Focus on core activities
Your in-house staff can focus on high-priority projects while a nearshore software team can overtake less strategic tasks.
Challenges
But in the long run, this approach also poses significant risks:
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Buy-out fees
If you want to hire a member or a whole nearshore custom software development team full-time, you’ll have to buy them out from your provider. Sometimes, this procedure entails stressful negotiations and ends with a hefty check that might reach up to hundreds of thousands of dollars for a team.
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Project-centric mindset
As such teams transition from one client’s project to another, they may struggle to adapt to your company’s processes. This can create tension with your in-house crew, potentially leading to delayed responses, missed deadlines, and lower-quality work
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No scaling opportunities
When you hire a nearshore software development team, it poses a challenge in winning over investors. Delegating your core competencies to developers who will eventually leave your team could be viewed as a shaky foundation, wouldn’t you say?
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Data security concerns
Entrusting a nearshore software development company with your product development means sharing sensitive company data and potentially exposing your valuable intellectual property rights to risks. Without robust security measures in place, there is a heightened risk of data breaches, leaks, or unauthorized access.
Comparison with alternatives
Overall, dedicated nearshore software development teams are a good solution for temporary software projects. On the one hand, the client can control the development process and get a moderate team’s dedication.
Hence, it surpasses the team augmentation model due to its higher dedication level. Additionally, team augmentation typically requires a pre-existing in-house engineering team to augment it. On the other hand, IT outsourcing is preferable for non-tech firms lacking internal engineering teams, with reduced client involvement compared to staff augmentation. Furthermore, neither solution offers significant benefits in terms of client control. Staff augmentation allows for partial client involvement, while IT outsourcing lacks it entirely. Similarly, managed services also lack client control but maintain a moderate level of team dedication.
Another alternative is a software R&D center, which is a software development branch of a product tech company in a beneficial location with a rich tech talent pool and lower labor costs. This solution offers full control over the development process, making it a safe option for long-term product development. With this approach, you can build your own software team consisting of people with a sense of ownership over your product and exceptional dedication to your company.
What is a nearshore software development center
A nearshore software R&D center is a fresh alternative to traditional team extension models, such as nearshore development teams. With this solution, you get your own software research and development center turnkey ready with a team from 0 to 100 skilled engineers within a year. What does it include at Alcor?
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IT recruitment
With a team of 40 experienced IT headhunters, we offer full-cycle IT recruiting services spanning 9 countries in Latin America and Eastern Europe to hire your dream engineers. We handle it all: starting with thorough sourcing and finishing with smooth onboarding of your developers. Within 2-6 weeks, we can find a perfect match for your team, ensuring top-notch quality as 98,6% of our candidates successfully pass the probation period.
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EoR support
If you hire with Alcor, you don’t need to establish your legal entity in a target location. Leave all the nitty-greedy tasks to our experts! We’ll take care of the employment of developers and compliance with all local laws, with payroll and tax management covered. You can rest assured while focusing on your core tasks, as in case of a fine because of our mistake, we provide 100% compensation.
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Full operational support
We go even further and offer a bunch of other additional services such as hardware procurement for your team, office lease, your employer’s brand promotion in the local market, visa support, and even more! Just choose what fits your business needs best.
Better than a nearshore third-party development team
Alcor is your tech expansion accelerator for global growth
- From 0 to 100+ engineers in one key talent pool
- Employer of record—no entity compliant employment
- Comprehensive in-country support
- No buy-out or other hidden fees
- Your team from day one. Your management. Your culture.
Own R&D Center vs Nearshore Software Development
Tech R&D Center
- Silicon Valley-caliber talent We recruit 30+ elite senior developers in 3 months. All decisions regarding the team are up to you.
- Transparent pricing Detailed invoices help you be in control of your finances. Plus, your tech R&D team is x2 more affordable than an external one.
- Your team & branding You get a tech team with shared values for innovation and growth—90% retention rate & an average tenure of 2.5 years.
- No setup & buy-out fees No setup fee is needed to start building your software R&D team. Plus, there is no buy-out process—your team now, free insourcing after.
- Intellectual property under control With direct agreements, you fully own your product and its source code, keeping unique expertise in-house.
Nearshore Software Team
- Junior/middle-level talent You can’t control the quality of talent. Plus, with planned moves to new customers after 1 year, your A-players will be snatched away.
- High markups Some providers charge up to 50% of talent compensation to earn more without the client knowing about it.
- Not your brand & practices Developers work under your provider’s brand. Thus, there’s no room for your corporate culture, policies, and direct oversight.
- High setup & buy-out fees Most vendors require contractual & financial obligations first. Then, you pay 20% of a developer’s annual compensation in buy-out fees.
- Intellectual property risks IP rights over your product initially belong to developers of your provider. You get minimum security and a tedious transfer process.
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.
Alcor’s 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.
Expanding our engineering team outside the US with Alcor was a game-changer! They found 15 talented developers and provided seamless EOR & operational support. Great responsiveness to our needs!
Alcor’s flexible model helped us scale from 0 to 30 devs in a year first, and then to 50! No buy-out fees, seamless hiring, and top-tier talent. A hassle-free way to grow without setting up a subsidiary!
FAQ
1) What are the top regions to nearshore development team services?
Latin America and Eastern Europe are top destinations for establishing a nearshore software development team. Both regions host R&D centers of such tech sharks as Google, Microsoft, Amazon, Meta, and others. Together, LATAM and EE boast a rich pool of tech talent amounting to over 3 million. Plus, both regions offer a more cost-efficient salary rate than the US. Thus, on average, developers from Latin America earn $38,350 a year, while Eastern European engineers get $52,180. That’s a 2-3 times difference compared to their counterparts in the United States!
As for location, Latin American countries are easily accessible from major US cities, sharing the same time zone with most of them, which ensures smooth management of nearshore dedicated teams. On the other hand, Eastern Europe is just a 1-2 hour flight away from major European capitals like London, Berlin, and Paris. The time difference can also be advantageous, allowing businesses to benefit from an almost 24-hour workday (your in-house devs start work after your nearshore coders are done with theirs).
No matter which region you choose for extending your business, Alcor is here to assist you in swiftly and smoothly entering both IT markets. Just share your needs with us!
2) What are the top countries to nearshore development team services?
Countries like Mexico, Colombia, Argentina, and Chile have thriving tech ecosystems in LATAM, whereas Poland, Romania, Ukraine, and Bulgaria stand out as tech frontiers in Eastern Europe.
These destinations are top choices among product tech companies looking to set up a nearshore dedicated development team, each offering a rich talent pool with diverse tech stacks, moderate salary rates, and vibrant tech environments.
Unsure which country is the best fit for your tech business? Share your goals with your strategic partner, Alcor, and we’ll help you select the perfect destination!
3) How do you choose where to expand your tech business?
When choosing the ideal nearshoring destination for your tech business, key factors to consider include the size of the talent pool, local salary rates, and the overall business environment. In Latin America, Mexico stands out with a vibrant talent pool of around 800,000+ software developers, followed by Colombia with 165,000+, Argentina with 150,000+, and Chile with 100,000+. In Eastern Europe, Poland boasts over 650,000+ tech professionals, while Ukraine has 302,000+ developers, Romania offers 250,000+, and Bulgaria contributes over 116,000+.
Regarding salary ranges, the average wage for LATAM developers spans from $35,400 to $42,360, while in Eastern Europe, salaries range from $45,000 to $59,000 per year. To be more specific, JavaScript developers in Poland get around $69,000 annually, while their counterparts in Mexico earn around $42,000—a stark difference compared to the US, where these engineers charge $103,000 yearly.
The business environment in each country is unique, offering different opportunities for tech businesses, as well as varying tax rates and legal compliance requirements. The good news is that regardless of which country you choose for nearshoring, you don’t have to navigate these complexities alone. At Alcor, we help you select the best nearshoring destination based on your business needs and goals, hire the top 10% of talent in the market for your team, and navigate the peculiarities of each location, handling employment, payroll, tax management, legal compliance, and more. Contact us, and we’ll see what we can do for you!
4) What are the alternatives to a dedicated software team?
To bypass the pitfalls of this collaboration model, tech companies opt for nearshoring and offshoring by establishing their own software R&D centers, rather than relying on providers’ nearshore software teams. With this approach, you gain your own research and development office, backed by comprehensive support services, including full-cycle tech recruitment, office leasing, end-of-relationship (EoR) services, legal compliance, employer brand promotion, and office maintenance. With Alcor, you can hire a nearshore software development team and expect your brand-new office to be launched in just 2 months! Ready to collaborate?
5) When is a business ready to use a software development center?
It all boils down to your business needs. For tech product companies, establishing a software research and development center with an in-house engineering team, rather than a nearshore development team, proves to be an ideal solution. This approach enables the retention of core operations such as product development and its testing, under direct control, ensures long-term commitment from engineers, and facilitates the attraction of investments.
On the other hand, for businesses lacking internal expertise in software development, hiring a nearshore dedicated team would be a better fit. Yet, if you want to play the long game and potentially grow your business, choosing tech recruitment services is a great option to start with.