In the world of outsourcing, Mexico isn’t a new kid on the block. Its story began in the late 90s and gained momentum at the onset of the 00s. Traditionally targeting the US market, Mexico’s shared time zones and geographic proximity give the country an upper hand over such a formidable outsourcing competitor as India.

In this article, we’ll unpack the key benefits of Mexico outsourcing, shed light on some challenges, review companies that outsource to Mexico, and more. Dive in to learn more.

Why choose Mexico for IT outsourcing

For North American businesses, Mexico offers a dual advantage: geographic proximity and cost-effective solutions. But there are more reasons to bet on Mexico for IT outsourcing. Let’s review the top five reasons companies choose the country for software development.

Geographic proximity. The country’s location near North America, its major market, plays a key role in Mexico outsourcing success. With a 2,000-mile common border, travel between the countries is easy, given that flights between major U.S. and Mexican cities are much shorter compared to far-off destinations. As a result of this, you can achieve more convenience during team visits and better personal oversight over your project.

A broad talent pool. Deloitte reports that the demand for tech talent in the U.S. is expected to grow to 7.1 million roles over the next decade, with many vacancies remaining unfilled. Outsourcing in Mexico offers a solution – a repository of 225,000+ software engineers, according to Statista.

You can access local talent specializing in:

• JavaScript
• Java
• Python
• SQL
• C#
• C++

Other roles you can backfill with software outsourcing Mexico are:

• Fullstack developers
• Backend developers
• Data analysts
• Project Managers

With 130,000 tech graduates annually, the country’s IT hubs are continuously replenished by newly minted talent ready to start their IT career.

Language proficiency. According to CodersLink report, 47.4% of local IT professionals possess advanced or higher English skills, a critical factor in driving Mexico’s IT outsourcing.

English competence is a major driver of salary growth, as professionals with advanced levels can secure up to 100%-200% higher salaries than their peers without this skill. For this reason, many local developers show excellent English skills, landing positions in international corporate environments. For your business, it guarantees smooth, zero-barrier communication between your primary and outsourced teams.

Cultural alignment. The U.S. and Mexico have more in common than a border – they share a rich history and cultural ties. This common background helps better understand the business practices, preferences, and corporate culture of each party. Such cultural alignment also enables closer integration of outsourced professionals into your business, maximizing trust, productivity, understanding, and collaborative spirit.

Cost advantages. Cost reduction is one of the key reasons why companies explore outsourcing in Mexico. When it comes to the matter of pricing, Mexico tends to be on the lower side compared to other hubs of software developers in Latin America. Take a look at the picture below, showing the monthly salaries of software developers across the region:

You’re probably interested in how software development outsourcing Mexico can reduce your software development budget. We stacked up the hourly rates of software developers with the ones in the U.S. You’ll notice that you can save up to 67% for senior roles:

According to Indeed.com, Glassdoor.com, and Payscale.com in 2024

If you’re looking for more affordable regions, Colombia outsourcing also offers lucrative rates, potentially sparing up to 70% of your budget compared to domestic staffing.

Benefits of outsourcing to Mexico

Other benefits of outsourcing to Mexico we should mention include small time zone differences, high-quality software development, and governmental support. Let’s review them in more detail.

Streamlined communication due to a similar time zone. Every common hour matters in the dynamic process of outsourcing. Mexico aligns perfectly with U.S. time zones, which lets you avoid conflicting schedules between your primary and outsourced units. Thus, your teams will be in perfect synch, sharing a common time window of 6-8 hours.

High-quality software development expertise. Local IT experts are a skillful bunch. Thanks to this, outsourcing in Mexico offers high quality despite moderate pricing. According to Coursera Skills Report 2023, the local professionals shows great potential in business, Data, and technology.

Notably, the country takes second place in LATAM for skill proficiency and is leading the charge in technology and data science competence.

Other areas where local IT experts excel are Cloud, web development, and mobile development, making them perfect partners for innovative projects.

Government support and business-friendly regulations. Outsourcing in Mexico is safeguarded by robust legal frameworks, protecting Intellectual Property, ensuring data protection, and providing guidance for contracting software developers.

Mexico’s membership in the USMCA provides IP protections and data privacy standards, offering an extra layer of security for U.S. businesses working with Mexican talent.

Thanks to this, in the Global Services Location Index 2023, Mexico climbed as high as 10th position globally, which shows the country’s attractiveness as key player in IT outsourcing in Latin America.

Source: The 2023 Kearney Global Services Location Index

Common challenges and disadvantages of outsourcing to Mexico

There are many benefits of outsourcing in Mexico but like everything in our world, it also has disadvantages you should be prepared for. Fortunately, with diligent planning these risks can be mitigated.

A language barrier: When it comes to English proficiency, Mexico falls behind, both on a regional and global scale. Although a considerable portion of IT professionals have adequate spoken and written capabilities, admittedly, not all candidates might be fluent enough to become an integral part of North American companies.

How does HLAD solve this challenge? We’ve established a screening process where we thoroughly assess a candidate’s English level. Besides, we sponsor English courses as a part of our employee professional development plan. That way, 95% of our team master English at the B2-C1 level, which is full working proficiency.

Cultural differences: Often considered a challenge rather than a serious disadvantage of outsourcing to Mexico, culture gaps require thoughtful managerial effort to bridge them. These differences can potentially impede understanding between your local and outsourced teams, negatively affecting productivity.

How does HLAD solve this challenge? A culture fit interview is an essential part of our internal screening process. We only hire software engineers who fit the culture of your organization. Moreover, we set up clear guidelines for cross-cultural collaboration, which lends its hand to flawless nearshore software development in Mexico.

Legal requirements: Let’s address the obvious elephant in the room – a 2021 amendment to the Federal Labor Law, also known as the “outsourcing ban.” This is one of the greatest myths about IT outsourcing in Mexico, as it doesn’t prohibit outsourcing per se. In reality, this amendment aims to protect employees’ rights as well as combat tax evasion. Understandably, it may pose some doubts as to engaging local talent for your projects.

How does HLAD solve this challenge? With a deep understanding of local regulations, particularly the FLL reform, we can help you navigate the local legal landscape. We’ll ensure your venture meets all the requirements and is fully compliant with local labor laws. We always establish clear service-level agreements to guarantee complete transparency.

Data security: Delegating sensitive data to another country can raise concerns. Outsourcing in Mexico, you have to deal with unfamiliar compliance regulations and security standards.

How does HLAD solve this challenge? When it comes to data security, we run a tight ship. We always commit to following the protocols and security standards pertaining to the client’s company. Moreover, we’re ready to comply with data protection standards, like GDPR or ISO 27001. Additionally, we enforce strict data handling protocols, including data access and regular security audits.

Success stories: Companies that outsource to Mexico

Wonder if companies like yours outsource to Mexico? Let’s dive into some success stories of businesses that have relied on Mexican talent to get their projects up and running.

First, the landscape of companies that outsource to Mexico is represented by global enterprises. A bunch of the world’s leading tech behemoths have a presence in the country, for instance, DELL, Google, Salesforce, Microsoft, Oracle, IBM, Intel, Facebook, Apple, Amazon, Accenture, Cisco, and Netflix, to name a few.

Let’s take a look at brands with U.S roots that chose HLAD as their trusted outsourcing partner:

• Ravetree

Ravetree is a software development company based in Raleigh, North Carolina that delivers management software platform for project-driven organizations. In 2022 the company reached out to us to outsource their development team to reduce costs and access a larger network of full-stack developers. Since then, the company has grown rapidly and met their objectives.

• Gainsight

Another of our clients, Gainsight, is a market leader in digital marketing based in California, US. By outsourcing its development team, including such roles as Java developers and QA experts, the company has been able to significantly improve the overall quality of its main product and establish a team of software engineers at a lower cost than many of its U.S. counterparts.

• Savills

Savills, a leading real estate company from New York, required a team of skilled UX/UI experts, Quality Assurance professionals, and software developers to contribute to desktop and mobile development of their main platform. Since 2021, we’ve integrated a robust team of skilled professionals who have successfully driven innovation for their award-winning data visualization and analytics platform.

Key considerations for outsourcing in Mexico

Choosing the right partner for software outsourcing Mexico is key for the success of your project. The ideal provider will align strategically with your goals and find skilled developers to bring your vision to life. Here are some aspects to consider when choosing a provider:

• Be clear on your requirements: Define your project scope, tech stack, and roles required to fulfill your goals. This will steer your search for outsourcing in Mexico in the right direction and help select a vendor with the expertise you need.
• Check the vendor’s portfolio: Consider vendors with a proven track record of completed projects in your business vertical. Case studies, client feedback, Clutch and Good Firms ratings will shed light on their success as a provider of software development outsourcing in Mexico.
• Focus on their communication: Effective communication is a cornerstone of a successful partnership. Your provider should demonstrate strong English proficiency and a high percentage (up to 80%) of English-speaking team members. This ensures they can help you hire LATAM developers with adequate language skills.
• Assess culture fit: A vendor who aligns with your values and management style will guarantee successful outcomes. Thus, consider their work ethic, communication and business practices as well as an approach to resolving issues.
• Evaluate their IT infrastructure: Assess the vendor’s capabilities when it comes to the infrastructure, office space and its maintenance. Ensure they have all the needed resources in place to meet your requirements.
• Establish data protection measures: Consider a provider’s capabilities to protect your IP and sensitive data. Ensure they have the right frameworks, tools, and policies to guarantee high-level security and compliance.

By choosing a partner for outsourcing in Mexico using these aspects, you can build a strategic partnership that will bring your project to fruition while sidestepping the risks.

The future of IT outsourcing in Mexico

As 2025 is upon us, it’s crucial to understand the evolving landscape of IT outsourcing in Mexico to size up opportunities and shape your strategy. Here’s what to anticipate in the coming years:

Steady growth. There’s a positive outlook on the future of IT outsourcing in Mexico – the market is on a growth trajectory, potentially reaching $35,261.1 million by 2030. With such market growth comes an expanded pool of talent that North American businesses can count on.

Remote collaboration. Mexico is set to stay the leader in remote work adoption. With a flexible workforce and negligible time gap, the country continues to solidify its position as the top outsourcing destination for North American companies.

Cybersecurity. Mexico’s IT sector is laser-focused on improving cybersecurity, with local IT companies putting a prime on robust security measures to safeguard data and maintain trust.

A focus on innovation. In recent years, the Mexican government has launched several initiatives designed to fuel startup growth. Programs like 500 Startups LATAM, CONACYT, and Fintech Law are paving the way for the wide adoption of cutting-edge technologies. It means that Mexico will continue to be a source of innovation-inclined talent.

A growing pool of English-speaking IT specialists. Professionals with advanced English levels can earn much higher salaries – a significant motivator for honing language skills. This trend makes IT outsourcing in Mexico a strategic move, especially for U.S .companies looking for culturally aligned teams.

We are your trusted partner for IT outsourcing in Mexico

• HLAD is a reputable software development company with 16 years of experience in IT outsourcing in Mexico. Yes, we’ve been around since the days when the iPhone was still a brand-new thing.
• With our network of local software engineers, we can build your tech team in Mexico, tailored to your project needs, comprised of 1% of tech talent. Our no-mercy, 4-step screening process guarantees it.
•  Our model lets you connect with each team member directly and manage the project on your terms.
• From office space and IT infrastructure to employee retention services, we’ve got you covered.
•  Our approach is 100% dedication where all engineers will be fully integrated into your project, working full time, 5 days/40 hours per week.
• 94% of clients are willing to recommend us.
• 98% of our team members choose to stay with us long-term.
• 95% of our team speak English at an advanced level (B2-C1).
• We’ve built teams for Greenpeace, AstraZeneca, Dentsply Sirona, Rakuten Viber, doTerra, and 100+ more companies of various scale.

Wrapping up

Undoubtedly, on the scene of global outsourcing, Mexico is a compelling player, especially for North American businesses. The country has a bunch of advantages to offer – from 6-8 shared business hours and a pool of skilled tech professionals to geographic proximity and cost advantage. We believe that Mexico an ideal destination to delegate your project and achieve high-quality results.

Partnering with a provider like HLAD will help you overcome the main challenges of Mexico outsourcing and reap all the benefits. Let’s talk about your project and see if our model suits your business.