It’s almost 2024, yet the world is still facing challenging economic times with rising inflation. The need to navigate this difficult period has brought into sharp focus the importance of optimising costs while maintaining operational efficiency. Against this backdrop, outsourcing, particularly in cost-efficient regions, has become a key lever for businesses to pull in order to stay competitive and resilient.

The global outsourcing survey by Deloitte identified the top three reasons why businesses currently choose to outsource their services, including:

  • Reducing costs (84%)
  • Standardizing processes (82%)
  • Enhancing capabilities (70%)

While traditionally Asia has always been the go-to choice for cost-effective outsourcing, the changing economic landscape is shifting focus towards LATAM. Latin America (LATAM) is emerging as a formidable competitor, especially when it comes to balancing cost-efficiency with quality.

This article will walk you through why LATAM stands out as a smarter choice for outsourcing, particularly for budget-conscious business leaders.

Cost dynamics of LATAM outsourcing

Glassdoor highlighted the average salary in the IT sector in LATAM countries is considerably up to 50%lower than in North America and Western Europe. This difference impacts the overall outsourcing cost and translates into direct savings for companies that are looking into LATAM’s talents. 

Labor Cost Efficiency

One of the most compelling aspects of LATAM outsourcing is its labor cost advantage. 

But hiring high-quality remote dedicated developers at the cost of compromising? With LATAM resources, you might want to turn it into “Hire software developers at low cost without compromising the quality!”.

 This region offers a rare blend of skilled labor at affordable fees. In fact, software developers from Latin America are among the best ones according to the global ranking by HackerRank.

Regulatory and tax benefits

Many LATAM countries offer tax incentives and have less stringent regulatory frameworks for foreign businesses, reducing the overall cost of operations. For example, PwC noted that Brazil offers tax incentives for technology and innovation-focused businesses, including reduced tax rates for specific industries and tax credits for research and development activities.

Currency exchange advantages

The currency exchange advantages in LATAM (Latin American) outsourcing are another critical factor contributing to its cost-effectiveness. 

Businesses in countries with stronger currencies (like the USD or Euro) can benefit from favorable exchange rates when outsourcing to LATAM countries, where local currencies generally have lower value. This means that the same amount of money can afford more services or labor in LATAM than in the home country of the business.

Final words

If you’re a business leader looking to scale efficiently, LATAM outsourcing offers a compelling value proposition. It’s a strategic move that goes beyond mere cost-cutting

However, keep in mind that it’s not just about reducing the “outsourcing cost” line in your budget. It’s about investing in a partnership that can propel your business forward in a competitive global market.

Redefine how you scale and compete with the support of Sunbytes to look southward and explore the myriad possibilities that LATAM offers for your business’s growth and sustainability.

Let’s get started with Sunbytes

Drop us a line and we’re just 1 click away to make your projects ready

This field is for validation purposes and should be left unchanged.

Blog Overview