• Accessing a wider tech talent pool 

Scaling to nearshore and offshore locations opens doors to millions of skilled candidates. For example, Latin American and Eastern European regions boast over 2.8 million tech specialists who demonstrate Silicon Valley-level expertise in Java, C++, PHP, Python, JavaScript, Swift, .NET/.NET Core, and other programming languages. 

• Slashing costs

Hiring a development team abroad also lets you enjoy the benefits of more affordable salary rates. For example, senior software developers in Latin America earn about $62,900 per year, while those in Eastern Europe make around $68,800 annually. By comparison, their counterparts in the US charge approximately $122,000 for similar services. On top of that, setting up development centers in these regions means benefiting from business-friendly tax rates and a welcoming environment for growth. 

• Scaling abroad 

Setting up your software development center in a foreign country allows you to tap into new markets and build global partnerships while scaling your operations efficiently. For example, Sift expanded its team with 30 talented software engineers within just a year and later achieved unicorn status after raising $50 million in funding from Insight Partners. Other success stories include Ledger, Franki, GoTransverse, and the list doesn’t stop there!

• 800,000+ tech gems, plus 124,000 yearly STEM graduates. Mexican software developers are #1 in LATAM for skills in JavaScript, Python, SQL, C#, React.js, and Angular.
• 44% lower salaries than in the US. In Mexico, senior software engineers earn, on average, $69,000 a year, while in the US, this number reaches $122,000. 
• Ideal time zone alignment. Mexico has only a one-hour difference with the US West Coast and two hours from the East Coast.
• #1 nearshoring location in LATAM. Mexico stands out thanks to its financial attractiveness, people skills, and business environment. 

• Navigating local legislation

You’d want to set up a software development center abroad with full legal compliance. For one, tackling the paperwork to open your legal entity from scratch could take months. For two, overlooking critical legal requirements or missing deadlines could result in hefty penalties, fines, or even severe harm to your business operations and reputation. 

Solution: Partner with a reliable local vendor to skip the red tape. They handle all the legal nuances and setup, letting you build your tech team without hassle.

• Ensuring top tech expertise

Hiring software engineers demands in-depth research into the local labor scene and well-structured tech recruitment. On top of that, finding that perfect candidate who not only fits your technical needs but also blends seamlessly with your company culture adds an extra layer of complexity. 

Solution: Save your time and money by letting an experienced provider build you software development teams in Mexico.

• Choosing a reliable provider   

If your provider of software development center services makes mistakes, like presenting unsuitable candidates, missing deadlines, mismanaging payroll & taxes, or simply failing to deliver, you may have to juggle multiple vendors.  

Solution: Look for a trustworthy partner with top-notch tech recruitment and legal expertise. 

Alcor has successfully set up software development centers for ThredUp, People.ai, Gotransverse, and more. On Clutch, one of our clients noted, “Alcor’s expertise and implementations have enabled us to run our company in the way and at the level we want.”

• You want to scale  

Building a software development center is a game-changer for tech companies looking to scale and explore new markets. That’s why leading global tech firms like Ledger, People.ai, and Sift have turned to us to build their development centers abroad. Result? They’ve turbocharged their products while also gaining ground in the foreign markets.

• You aim to save costs 

Setting up a software development center with an engineering team in the US may cost you millions of dollars, while a software development center in Latin America or Eastern Europe can save you up to 60% on developers’ salaries. You’ll also save on technical equipment, office lease, and maintenance and be able to reinvest in your business according to your current needs.

• You intend to focus on your product  

Tech companies choose the software development center solution because it enables them to focus on what truly counts—advancing their core product. While a professional service provider takes care of tech recruitment, EOR, and operational support, you manage your offshore team and drive your company’s growth.

Alcor’s software development center as a service process runs like clockwork:  

• We kick things off with full-cycle tech recruitment in Mexico. Our team of 40 seasoned headhunters can find elite software engineers in just 2-6 weeks! 

• Our EOR service handles accounting, HR, payroll, and legal – including managing salary payments and transferring funds between your R&D unit and headquarters, and handling health insurance and leave policies. Plus, we offer comprehensive legal and compliance support, including real estate negotiations, contract drafting (SLAs, NDAs, B2B agreements), and support with labor laws, visas, and M&A. 

• If you need your own physical office, we handle everything from location selection and parking to security systems, office layout, seating, and equipment. Additionally, we’ll assist with procuring computers and setting up software security systems and servers.  

Voilà, your turnkey software development center is up and running within just 2-3 months!

• Working with multiple service providers  

Some companies opt for outsourcing the software development center setup to multiple service providers for different tasks: tech recruitment, employer of record, legal compliance, office lease, procurements, and so on. 

While this might seem efficient, this approach often backfires, leading to miscoordination, delays, and, ultimately, higher costs and disappointing results.  

Instead, consider teaming up with a local software development center provider that can manage all back-office functions in one place.

• Overlooking employer branding 

In a new job market, prime candidates often reject offers from expanding companies. In fact, 60% of job seekers decide against accepting a position due to a company’s poor employer brand. This typically occurs when candidates are unfamiliar with the company’s values, culture, and growth opportunities, leading them to choose other options instead. 

To turn this around, Alcos kicks off an engaging employer branding campaign by crafting a compelling employee value proposition (EVP), building your company’s strong presence in local developer communities and tech media, and running impactful social media and PR campaigns.

For example, we created a video featuring Sift’s Hiring Manager that highlighted the company’s values and team culture. Promoted across social media, the video led to a 15% increase in response and offer acceptance rates.