Why US Businesses Are Choosing Colombia for Nearshore Software Development

In recent years, Colombia has become one of the top destinations for nearshore software development outsourcing, a method in which businesses outsource work, such as custom software development, to nearby countries.

Latin America (LatAm) is a major nearshoring region for US businesses, as it offers the perfect balance between cost-efficiency—due to the region's lower cost of living compared to the United States—and access to a larger, specialized workforce that might be hard to find locally.

This article will cover how to find and hire nearshore software developers in Colombia, the costs associated with outsourcing software development there, and the challenges businesses may face, along with effective solutions.

Why Is Columbia Gaining in Popularity as an Outsourcing Destination for Software Development?

Colombia, a vibrant country known for its rich culture and diverse landscapes, is also home to a thriving technology industry. This makes it popular for nearshore technology outsourcing, even among other LatAm countries. Here’s why.

A high-demand IT outsourcing market

Colombia's IT outsourcing market is growing fast, with a market volume projected to reach over $1,083 million by 2029. As more developers enter the workforce, outsourcing providers in the tech sector can offer a wider range of services to meet global demand.

This growth shows that companies increasingly trust the country's IT sector to provide skilled developers who understand the needs of international clients.

Cultural fit

Colombia shares many business practices with the US and has long been exposed to US markets. As a result, Colombian developers are familiar with Western work ethics, making integration into US teams much smoother.

The Colombian government has also made significant efforts to promote bilingualism through improved access to education. High schools and universities now set English proficiency benchmarks for students to meet before graduation, which reduces language barriers between US business owners and their nearshore partners.

Time zone alignment

US-based businesses can partner with Colombian software developers without being impacted by significant time zone differences. Colombia follows Colombia Standard Time (COT, UTC-5) year-round, with no Daylight Saving Time observed. This stable time zone alignment with many US cities enables a smooth workflow and minimizes scheduling challenges.

Here's a comparison between Colombia Standard Time and various major US cities across time zones, both during and outside of Daylight Saving Time:

Cost-efficiency

If hiring in-house talent is too costly and you're looking to scale quickly, then it's a sign you should consider software development outsourcing to Colombia, where average salaries and overhead costs are lower. 

The country’s lower cost of living compared to the US translates into more competitive rates without compromising on quality. Outsourcing to Colombia also means lower operational costs, including expenses for office space, utilities, and other business services. 

Government initiatives

Colombia's government actively supports the IT industry, making it an attractive outsourcing destination. For instance, ProColombia aims to reduce inequality and promote equity by expanding software and IT services, which now specialize in areas like fintech, healthcare, energy, digital marketing, AI, and big data.

In addition, cities like Bogotá, Medellín, and Cali have developed tech hubs and innovation centers that promote collaboration and entrepreneurship.

How Much Does Outsourcing Software Development Cost in Colombia?

Let's dive into the numbers. The table below shows the average monthly software developer salaries in Colombia and how they compare to US-based salaries using our LatAm hiring cost savings calculator. 

Several factors influence pricing, including the lower costs of living in Colombia compared to the US, varying tax structures, and industry demand.

Companies that prefer outsourcing to developers who have a deeper understanding of the local market and need to align with specific regulations may find hiring from within the US more suitable.

However, for businesses that want excellent quality work without overstraining their resources, all while maintaining cultural and time zone alignment, software development outsourcing to Colombia is an attractive option. 

Challenges of Outsourcing to Colombia

Outsourcing software development to Colombia, like any other destination, comes with its challenges. The good news? These challenges can be overcome with the right strategies.

Below, we break down common obstacles and show you how to navigate them for successful outsourcing.

Evaluating education and employment history

Resumes in Colombia often appear different from those in the US. Expect resume quirks, such as personal details like photos, marital status, and ID numbers. While formatting may not align with US standards, skills and experience matter the most.

Many developers also work on a project basis rather than hold long-term positions at tech companies. This doesn't mean they lack experience—just that contract work is more common. Instead of focusing on job duration, assess their portfolio, past projects, and technical skills.

Managing contractor expectations

Colombian developers working for local companies often receive strong benefits, including health insurance, a “13th salary,” retirement funds, and more. Many hesitate to leave full-time jobs for contractor roles that lack these perks.

To attract top talent, companies can offer an "integral salary," which provides higher pay and simplifies compensation by bundling mandatory benefits and base salary into a single payment. This should be agreed upon in writing to set clear expectations. 

Security and data privacy

Data security is a key concern when outsourcing development in any location. Colombia has its own data protection laws, which companies need to follow. Additionally, compliance with international regulations like GDPR and CCPA is important.

To safeguard sensitive information, establish detailed security protocols. Require developers to follow best practices and sign NDAs. Contracts should outline strict data security measures to protect confidential information.

Internet connectivity and infrastructure

Major cities like Bogotá and Medellín have stable internet infrastructure. However, some remote areas may experience connectivity issues, which can impact productivity and communication.

Before hiring, confirm that developers have access to a stable internet. If necessary, consider offering technology stipends to improve connectivity. Providing reliable equipment can also help minimize disruptions.

Regulatory and legal considerations

One of the common mistakes when nearshore outsourcing is failing to comply with international hiring regulations. Misinterpreting Colombian regulations can lead to compliance issues. Also, you’ll want to be mindful of tax obligations for both the employer and the contractor.

Working with a local legal expert can help you understand these complexities. You can also work with outsourcing partners who have a proven track record of providing comprehensive support and are well-versed in Colombian employment law. 

How to Find and Hire Nearshore Developers in Colombia

Finding and hiring the right nearshore developer for your project requires a well-defined plan. Here's a guide to help you do so successfully.

1. Define your hiring needs

Before you start looking, identify exactly what you need for your software development projects. What skills and experience should your ideal candidate have? (For example, which programming languages should they know?) Do you need a full-time developer for long-term work, a part-time contractor, or a project-based hire?

Full-time developers provide consistency and long-term commitment, while part-time or contract roles offer flexibility. Project-based hires work best for short-term needs with a defined scope. Knowing your needs will help you find the ideal talent faster.

2. Explore the best ways to find nearshore developers

There are different ways to find talented developers, depending on how involved you want to be in the hiring process.

• Recruitment and staffing agencies: A trusted provider like Near, which specializes in connecting businesses with top LatAm talent, can handle sourcing, screening, and assessing technical and English proficiency for you.
• Freelance platforms: Freelancer websites like Upwork are ideal for short-term projects or testing a developer before committing to long-term projects. You can browse profiles, review past work, and hire quickly.
• Job boards: Posting on sites like Indeed or LinkedIn connects you with developers actively seeking work opportunities. This gives you access to a larger talent pool, which is useful if you prefer a more hands-on approach to screening candidates.
• Personal referrals: If you have connections who have hired from Colombia before, ask for recommendations. Trusted referrals often lead to reliable, skilled developers.

Each method has its benefits, so choose which best fits your hiring needs.

3. Assess technical and soft skills

Once you find potential candidates, evaluate their abilities. Review their portfolios and past work to check for quality. Conduct coding assessments, technical interviews, or test projects to gauge their problem-solving skills.

Ensure they have experience in relevant frameworks and industries. Assess soft skills, like communication and teamwork, through situational questions or responses to simulated remote work challenges.

As mentioned, a recruitment and staffing agency can handle most of these tasks for you. It’s up to you whether you’d like to add supplemental evaluations.

4. Finalize terms and onboard

After selecting the right developer, finalize salary, contract terms, and legal compliance. Set clear expectations for work hours, deadlines, and deliverables.

Then, provide access to project management and communication tools to integrate them smoothly into your workflow.

Final Thoughts

Colombia has become an attractive destination for finding top tech talent for software projects. Outsourcing software development to this country is a great option for many businesses seeking high-quality technical expertise while maintaining cost-efficiency.

At Near, we can connect you with the best talent across the LatAm region. We streamline the hiring process, ensuring a tailored experience that fits your needs.

Fill out this form to receive a list of pre-vetted candidates and hire in under 21 days. Discover the caliber of talent and cost savings nearshore hiring has to offer.