In the wake of substantial layoffs within FAANG companies and the broader tech industry, American corporations are facing the dual challenge of managing costs and accessing skilled engineering talent. The nearshore engineering model presents a strategic solution, offering cost savings, a rich talent pool, cultural alignment, and convenient time zone proximity. This model enables businesses to maintain agility and innovation by outsourcing to neighboring countries, thus overcoming the hurdles of the current economic climate and the competitive hiring landscape.
The recent layoffs in the tech industry, particularly among FAANG companies, have been significant. In 2024 alone, over 153,000 employees in the US were let go, a significant increase from the 93,000 tech layoffs in all of 2022[1]. The reasons for these layoffs include the current economic climate, over-hiring during the COVID-19 pandemic, and the rise of AI[1]. Despite these layoffs, the demand for skilled professionals like data engineers remains high, making the hiring process challenging[2][6][10][13].
In this context, the nearshore engineering model emerges as a viable solution for American corporations. Nearshore outsourcing involves getting work or services done by agencies located in countries near you. For American businesses, this could mean outsourcing work to countries like Canada, Mexico, or Colombia[3]. This model offers several benefits, including cost savings, talent availability, cultural alignment, and time zone proximity.
One of the main attractions of nearshore outsourcing is the potential for significant cost savings. Nearshore software development rates are on average 46% lower than onshore rates[8]. This cost advantage extends to hiring as well, with nearshore teams often costing 40-50% less on a cost-per-hire basis compared to US developers[7]. These savings are not just limited to labor costs. Nearshoring also eliminates the need for office space, equipment, and other infrastructure costs, allowing businesses to redirect these savings towards other strategic initiatives[4].
The nearshore model also provides access to a large pool of skilled professionals. This is particularly beneficial in the current job market, where finding a candidate with the right skills, personality, and technical abilities has become challenging[2][10]. Nearshore teams are made up of experienced professionals, allowing companies to quickly ramp up their software development projects or efforts without having to go through the lengthy process of recruiting and hiring[11].
Nearshoring also offers advantages in terms of cultural alignment and time zone proximity. The geographical proximity of nearshore locations often results in similar cultural norms and high English language proficiency, facilitating smoother communication and collaboration[8]. The small time difference between the client and the contractor makes real-time collaboration and prompt communication possible, which can be particularly beneficial for agile-based projects[7][11].
In conclusion, the nearshore engineering model offers a compelling solution to the challenges faced by American corporations in the wake of recent tech layoffs. By leveraging the cost savings, talent availability, cultural alignment, and time zone proximity offered by nearshore outsourcing, these corporations can effectively navigate the current job market and continue to drive innovation and growth.
Citations:[1] https://tech.co/news/tech-companies-layoffs[2] https://www.testgorilla.com/blog/how-hire-data-engineer/[3] https://blog.bydrec.com/proven-advantages-of-a-nearshore-software-development-company[4] https://www.unosquare.com/blog/unlock-the-secret-to-cost-savings-with-nearshore-software-development/[5] https://fi.money/blog/posts/faang-company-layoffs-what-caused-it-how-did-it-affect-their-stocks[6] https://business.linkedin.com/talent-solutions/resources/how-to-hire-guides/data-engineer[7] https://ubiminds.com/en-us/pros-and-cons-of-nearshoring-software-development-with-staff-augmentation/[8] https://hatchworks.com/blog/nearshore-development/nearshore-software-development-statistics/[9] https://techcrunch.com/2024/01/11/tech-layoffs-2023-list/[10] https://www.index.dev/post/how-to-hire-outstanding-data-engineers-the-definitive-guide[11] https://uvik.net/blog/nearshore-software-development/[12] https://layoffs.fyi[13] https://www.filtered.ai/blog/how-to-hire-a-data-engineer-fd[14] https://hatchworks.com/blog/nearshore-development/nearshore-software-development-guide/[15] https://www.reddit.com/r/Layoffs/comments/194uo2d/laid_off_from_faang/[16] https://www.zippia.com/data-engineer-jobs/how-to-hire-a-data-engineer/[17] https://waverleysoftware.com/blog/nearshore-software-development/[18] https://www.cnbc.com/2023/01/18/tech-layoffs-microsoft-amazon-meta-others-have-cut-more-than-60000.html[19] https://broscorp.net/hiring-a-data-engineers/[20] https://blog.aspiresys.com/software-product-engineering/3-obvious-benefits-of-nearshore-software-development/[21] https://www.efinancialcareers.com/news/2023/05/faang-to-finance[22] https://www.revelo.com/blog/hire-data-engineers[23] https://www.nearshoring-info.ch/nearshore-model/[24] https://www.linkedin.com/pulse/hiring-data-engineers-challenges-best-practices-alignity[25] https://sonatafy.com/top-8-benefits-of-nearshore-development/
Hire tech talent that is Technically Qualified, in the Same Timezone, and is Culturally Fit.
Hire Developers