Nearshoring: This Is Why You Should Work with a Colombian Partner

4 min read
Jan 19, 2024 1:18:24 PM

In recent years, Latin America has become one of the most attractive regions for companies interested in outsourcing software development projects.

In recent years, Latin America has become one of the most attractive regions for companies interested in outsourcing software development projects.

The Colombian case is a clear example of how improvements in infrastructure and connectivity, accompanied by more and better professional training, can facilitate the creation of a robust network of young professionals boosting the technology sector in the country.

Like Peru, Mexico, or Argentina, Colombia offers an increasing number of experienced professionals who can provide competitive solutions to overcome common challenges in a development project.

Here are some advantages of working with nearshore teams in Colombia. If you are interested in learning more about nearshoring, you can also check out this article in which we talk about ten critical benefits of this type of nearshoring IT development.

Five reasons why Colombia is an excellent destination for nearshoring

Many IT projects in very different scales face similar challenges:

  • There is a need for more professionals with specialized profiles.

  • It is difficult, costly, and time-consuming to increase the size of a team when an opportunity appears.

  • There is also the biggest challenge of all: reducing costs without sacrificing quality.

Here are some reasons why a Colombian ally can help you face these challenges.

1. A flourishing IT ecosystem

One indicator that speaks to the quality of the IT sector in a country is the existence of successful startups driven by local development.

There are numerous examples in this field, ranging from neobanks currently valued at more than US$1 billion to user intermediation platforms with a significant capacity to attract investors.


2. Government Supports the Technology Sector

The quality and good health of local startups is an even more positive sign if behind them there are government programs that support them by strengthening areas such as science, technology, and innovative development.

A clear example of this is initiatives such as Ruta N in Colombia.

This business and innovation center, created by the local government, seeks to strengthen local startups in various processes ranging from recruiting new talent to managing their public relations.

The confidence in the country regarding the growing thrust of the technology sector is that, according to estimates by the Colombian Software and IT Industry Federation, the contribution of technology industries to the country's GDP is expected to reach 5% by 2025.

3. Colombian IT professionals are great

In the world of nearshoring, a good business environment would only be complete if it were accompanied by the ability to offer excellent IT talent teams. There, Colombia has a significant strength.

According to data from the Ministry of Education, 24.7% of university students graduate with engineering, mathematics, and computer science degrees.

The consequence is that the country produces around 13,000 new IT professionals a year who, having gone through high-quality academic programs, are up to date with the latest technologies and programming languages, not to mention their close familiarity with agile methodologies.


4. An increasing number of companies trust Colombia

According to data published by the newspaper La República, from 2020 to date, 60 nearshoring projects certified their presence in the country with investments of US$1,072 million. These companies come mainly from the United States.

According to data from the Colombian-American Chamber of Commerce, around 450 U.S. companies in the country represent more than 100,000 jobs, are a source of good practices and knowledge transfer, and have been historically significant in the technological and sustainable development of the country.


5. The U.S. State Department highly rates Colombia for investment

In its most recent investment climate report highlights that the management of the economy and support for free trade put Colombia as the third potential destination in the region for companies that are looking to relocate or invest in the country.


Attrition Rates: Latin America's secret recipe for nearshoring success

According to Wayne Cascio, a researcher at the University of Colorado, the cost of replacing a team member in the middle of a project can be between 90% and 200% of the salary that person was assigned. Added to this are delays and the increased attrition experienced by teams when they have to work without all of their members.

For all these reasons, the ability to retain talent is one of the competitive advantages to be taken into account when thinking about establishing nearshoring operations.

Studies show that the attrition rate in countries such as India began to recover strongly after suffering a drop during the pandemic. While not hitting marks like the 30.7% it reached in 2019, it is known that in that country positions such as data scientist have a 28.1% attrition rate.

On the other hand, and according to research firm Gartner, some IT service providers are struggling with attrition rates of 30%.

A good nearshore partner knows firsthand that talent retention directly impacts the quality of work.Therefore, when looking for a partner in Latin America, it is very important to evaluate whether it offers your talent stability and opportunities to grow.

It is advisable to look for nearshore partners that offer a work environment that fosters personal growth and the permanent acquisition of new skills. If you are looking to reduce the potential risks that a nearshore relationship may pose, the organizational culture of a nearshore partner should show a clear commitment to employee retention and well-being.


Are you looking for nearshoring provider?

At Pragma, we have over twenty years of experience creating technological solutions for retail and financial organizations. We are also certified partners of the leaders in the technology industry. 

Contact us


Subscribe to
Pragma Blog

You will receive a monthly selection of our content on Digital Transformation.

Imagen form