Why Brazil is a Top Destination For Outsourcing Software Development
Outsourcing represents a considerable market. According to Statista, the global outsourcing of IT services generates around 66.5 Billion US Dollars. Positively, hiring from around the world has its advantages, and US companies are becoming increasingly aware of it.
Whether you just started working for a young startup or are a seasoned developer in a big enterprise, the first question you should ask yourself once you decide to outsource is: Where should I hire from?
The answer to this question can vary significantly based on your company's specific requirements. For instance, some organizations might be willing to invest a bit more in hiring to ensure the delivery of a critical feature that aligns with their investors' expectations.
Conversely, other companies may be operating on tight budgets and therefore prioritize cost-effectiveness in their solutions. Nevertheless, it's essential to emphasize that while cost is a crucial consideration, it should not be the sole determining factor in your decision-making process.
To assist in your decision-making process, we'll list several aspects to consider when outsourcing and why we believe Brazil should be your go-to destination. We will focus the review on the US-based companies' point of view, but most aspects also apply to different countries. Keep reading!
Brazil Offers More Competitive Costs
When it comes to outsourcing, pricing is undeniably a key factor, but it's vital to look beyond the numbers. We strongly recommend that you consider the various elements outlined below. Our extensive experience has shown that decisions based solely on cost can sometimes lead to unmet expectations. That said, Brazil offers an outstanding proposition, combining competitive rates with numerous advantages that ensure a successful outsourcing journey.
In the realm of outsourcing, Brazil shines as a top destination for software development. The cost-effectiveness is immediately apparent when you consider the favorable exchange rate between the US Dollar and the Brazilian Real. Brazilian software developers receive an average annual salary of BRL 103,000, which translates to roughly USD 20,000.
This is a remarkable contrast to the cost of hiring US software developers, who typically command an average salary exceeding $72,000 annually. By choosing Brazil, you not only save substantially but also gain access to a highly skilled workforce.
Benefit From a High Talent Retention Rate
When evaluating potential outsourcing destinations, it's essential to consider an often-overlooked aspect: job stability and its impact on project continuity. In some developing nations, such as India, professionals may be more prone to switching jobs in pursuit of better financial opportunities.
This phenomenon frequently leads to high attrition rates and a constant influx of new developers into your projects. The result? Project delays and potential disruptions in workflow due to the need for continuous onboarding.
However, when it comes to Brazil, a different cultural mindset prevails. Brazilian professionals tend to exhibit greater loyalty to their employers, making the country an attractive choice for outsourcing. This distinctive aspect significantly enhances your project's stability and ensures that you're more likely to collaborate with the same developer from project initiation to completion.
Get Access to a Wide Talent Pool
The country you choose to outsource should have a reliable stream of talent, both graduating and constantly studying new technologies. Otherwise, you might choose a country to outsource and realize that companies based there need help finding a professional experienced in a particular technology.
Brazil has a wide range of universities and technical schools that graduate many technical bachelors each year. Quality is no issue here either, with The University of São Paulo ranked 120th in the global list of best universities in 2023. UFRJ (Universidade Federal do Rio de Janeiro) also ranks as the 3d best university in Latin America for engineering courses.
Even when not considering graduation courses, Brazilians are accustomed to self-learn and share their focus on innovation and creativity with the US. That’s why Brazil was ranked second in Coursera’s Global Skill Index 2022 when evaluating Latin American countries on technology skills. You can count on having a well-educated team that will keep on learning in trying to beat your project’s challenges.
Reliable and Efficient Work Culture
You can meet very different work cultures depending on where you choose to outsource from. Some countries are known for their frankness, while others have a population that will hardly raise alternatives to avoid antagonizing a leader. Considering which relations are normal and which are strange to a country before outsourcing is crucial.
Brazilian work culture for software engineering is very similar to the US, so you won't encounter too many culture shocks when outsourcing to Brazil. The hierarchical work culture in Brazil is similar to that of America, where the highest-ranking person will make the final decision. Software developers in Brazil commonly raise concerns but understand they are there to support the decision-maker.
Brazilians are internationally known for being welcoming and having good relationships with work colleagues, meaning Brazilian teams will fit seamlessly into your existing team. They will also have worked in a company with a similar structure and know roughly how the departments work and interact with each other, saving you onboarding time.
Brazil Has a Similar Timezone and Working Schedule
Consider the time difference and working schedule to avoid late-night calls or super early meetings. Don't consider only your business hours, but at what time your team usually meets on dailies, how often unscheduled meetings occur, and at which time of the day, among other daily sync moments you might have.
Brazil's time zones align closely with North America. The furthest cities from Brazil will be a maximum of four hours before any given American city. Business workdays in Brazil are also structured similarly to those in the US. Business hours are generally from 8:30 to 5:00, so you'll receive updates as soon as you arrive at work, as Brazilians will have started their day earlier.
Better Work With Great Infrastructure
Even countries with many talented individuals can suffer from unreliable infrastructure, making calls difficult and alignment sufferable to achieve. Usually, a good indicator of infrastructure maturity is how spread out tech companies are.
The fact that Brazil boasted as many as 100 tech parks and 57 accelerators nationwide in the last decade should inspire much confidence. Some of these tech parks are now renowned globally for the high density of research centers and a massive population of developers, tech companies, and institutes. Also, all state capitals in Brazil have optic fiber cables to help support these parks, guaranteeing you will not face communication or internet outages when outsourcing to Brazil.
Government Support and Regulations
Political instability and bureaucracy can hinder outsourcing projects. It would be best to consider the incentives any given company will have to work internationally. Countries with low support for these can have stiff companies and have more difficulty being agile or renegotiating contracts and deliveries when necessary.
Brazil is a democracy with a fairly stable political climate and a growing economy, two factors vital for attracting foreign investments. Brazil is also well positioned on the Political Stability Index (2021) (based on World Bank data). Faring better than outsourcing hubs like the Philippines and India and Latin American countries like Colombia and Mexico.
Over the years, the Brazilian government has also taken groundbreaking measures to strengthen the business ecosystem and boost the outsourcing industry in the country. Brazilian laws like 'lei do bem' and 'lei da informática' offer tax incentives (or outright tax exemptions) to corporations that work on technology innovation, hiring Brazilian companies or pairing with Brazilian universities for research and development projects.
Conclusion
Outsourcing presents a consistent avenue for accessing high-quality developers from across the globe, often at a fraction of the cost of hiring locally. However, making the decision solely based on pricing can be perilous, as various other factors can significantly impact your team's productivity and project success. To make an informed choice, it's essential to consider aspects such as work culture, employee retention, infrastructure, and the depth of the talent pool in your chosen outsourcing destination.
When you view the bigger picture and weigh these factors comprehensively, Brazil emerges as a standout choice for prospective outsourcing partnerships. You need not become an expert in Brazilian geopolitics and culture, but having a basic understanding of these aspects and incorporating them into your decision-making process can be instrumental in ensuring a successful collaboration.
In summary, while cost-efficiency is an attractive aspect of outsourcing, it's crucial to take a holistic approach, considering the broader context of the outsourcing destination, with Brazil standing out as a top contender due to its favorable combination of factors that support successful outsourcing partnerships.
