Mexico has recently become the top choice for organizations looking to hire their software development experts from the three most prominent tech hubs in Latin America — Mexico City, Guadalajara, and Monterrey. The number of ambitious tech graduates, developers’ impressive levels of expertise and close geographic proximity to the US make the country one of the best choices for businesses in 2022.
Keep reading to discover why Mexico has become such an appealing option for those in search of agile development.
Quick facts about Mexico
- Big companies such as Amazon, Intel, and Facebook, among many others, are expanding their business in Mexico.
- Mexico boasts an impressive number of software developers. In 2022, that number has risen to 700,000.
- More than 130,000 young tech talents graduate from Mexican universities each year.
- Based on the Tholons Global Innovation IndexTM, Mexico is 13th on the list of top digital nations in the world as of 2021.
- The World Bank’s report states that Mexico was ranked 60th in the ease of doing business category, the highest in all Latin America and the Caribbean region.
- The average salary for a software developer working in Mexico is around 32,100 MXN ($1,582) per month.
- The country has close geographic proximity and shares the same time zones with the US.
- The biggest tech hubs in the country are Mexico City and Guadalajara, followed by Monterrey, Tijuana, Merida, Queretaro, and Aguascalientes.
- CodersLink’s Tech Salary Report 2021 surveyed about 15,000 registered users and 149 partners and discovered that the average annual salary growth for tech experts in Mexico is 4.7 percent.
- On the StartupBlink Global Startup Ecosystem Map, there is a sample of 449 startups, 18 coworking spaces, 34 organizations, and 2 leaders in Mexico.
Overview of Mexican IT ecosystem
Just two decades ago, the Mexican tech industry was nearly non-existent. In recent years the situation couldn’t be more different. Considering the expert talent deficit in the US and the Mexican government’s focus on the industry, the country's tech talent has grown significantly and is available to customers from all over the world. Now, more than 800 web development vendors and about 350 outsourcing companies operate in the country.
But how did Mexico manage to become so attractive in such a short period of time, standing out from other Latin American countries? According to the Tholons Global Innovation IndexTM, the country is ranked first in the list of top digital nations in the LatAm region. The Mexican government and educational sector are proactively training the next generation of tech employees to solve the global talent shortage issue and become the primary choice for US-based companies in need of nearshore solutions.
Mexican IT ecosystem in numbers
Startup ecosystem in Mexico
The Mexican startup ecosystem is rather promising. In the past year alone, it has experienced an exponential growth of over 119%. More international investors are actively entering the market, including Sequoia Capital, Andreessen Horowitz, Goldman Sachs, Temasek, DST, and Tencent, and Softbank. Some of these companies have even created their own corporate venture capital funds to invest in entrepreneurs.
As of 2022, Mexico City is home to around 230 startups, followed by Monterrey (60) and Guadalajara (48). The fintech sector experiences the most “newcomers”, but real estate, logistics, and automobiles aren’t far behind. For example, Kavak, the company focused on the purchase and sale of automobiles online, has recently raised $700,000 and has become the most valued startup in Latin America.
Benefits of outsourcing software development to Mexico
Large talent pool
Few countries can boast such a large and diverse talent pool as Mexico. With over 700,000 tech experts and 130,000 fresh tech graduates, the country has become the biggest tech hub in all of Latin America.
That means that finding developers with the skills that fit your project has never been easier. Of course, there are plenty of people ready to take on not only traditional software deliverables but also those with a more exclusive skillset. These include consulting roles such as fractional CTO and Agile process technology consultants, IT service providers, web front-end and back-end developers, system integrators, and more.
The quality of talent
An impressive 90 percent of graduates from the Tec de Monterrey Institute find a job within three months of graduating, according to Mario Flores Castro, president of the university’s Guadalajara campus.
Moreover, based on the SkillValue report, Mexican software developers are ranked second in the world based on their skills and expertise.
These statistics show that it won’t be a problem to find engineers that meet your expectations of agile development.
High level of English proficiency
Thanks to Mexico’s close proximity to the US, the country’s software developers possess a high level of English proficiency and actively use the language in their everyday work. Customers can easily communicate with teams and achieve great results in task execution.
Software developer salaries in Mexico and the US differ significantly; for example, an Android developer in Mexico makes around $45,000 annually ($3,750 a month). The same developer in the US, however, makes between $75,000 to $118,000 a year.
Software engineers in the US make around $103,035 a year, while in Mexico the salary is around $43,000 (more than two times lower).
Similar trends have been observed in almost all skill sets and levels of expertise, meaning that it is more cost-effective to hire programmers in Mexico than in the US.
Mexican and US developers' salary comparison
High retention rates in Mexican outsourcing companies
Mexico hasn’t been as exposed to the international outsourcing market yet, which means that the competition is not as fierce as in other countries. This has a number of benefits, including the ability to work with the same developers for the duration of the entire project without any delays, and not having to worry as much about recruiters snatching them up with better offers. Any new developers who are hired for your project will ultimately benefit from the existing team’s expertise.
Timezone convenience and geographical proximity
Mexico shares the same time zone as the majority of the US states, and while there is an hour or two difference in some locations, communication between customers and teams is still streamlined. If there is a need for customers and vendors to meet in-person, there are several airports with a lot of direct flights straight to Mexico.
Furthermore, although both Mexico and Canada have multiple time zones, Mexico City, one of the largest IT hubs in the country, shares the same time zone as Ottawa, Canada’s capital.
Cultural similarity with US
Given that both the US and Mexico share the same border, the countries have developed a shared cultural awareness, lowering the possibility of cultural differences. Thus, it is much easier to reach an agreement with Mexican teams than with those working in other locations. Mexican developers know English pretty well, leading to ease of communication and lesser risk of misunderstandings.
If you’re a software developer looking for new opportunities in Mexico or just considering moving to the country, check out Grid Dynamics’ openings in the area.
Let’s Sum It Up
Just a decade ago, Silicon Valley was considered the top destination for companies looking to hire talented developers. These days, more and more countries are growing their talent pools by opening tech universities and providing STEM courses for future engineers. All these efforts have not been in vain. Mexico has proven itself as an excellent choice for software development outsourcing. As the country’s economy strengthens, with a projected growth rate of 2.1% in 2023, we can expect the country’s tech sector to become even more dynamic.
In terms of both talent and quality of work, Mexico is one of the best-kept secrets for those looking for nearshore software development services.
Grid Dynamics is a global digital engineering company that co-innovates with the most respected brands in the world to solve complex problems, optimize business operations and better serve customers.
We build and manage self-sufficient project teams containing architects, data scientists, developers, and automation engineers specializing in the required technology stacks according to your specifications.
We offer several engagement models, including consulting, and agile engineering teams.
We also support several contractual models, including agile teams, fixed-scope programs, and outcome-based programs.