Outsourcing Software Development to Colombia: Benefits, Challenges, Costs

November 4, 2021
Reх Huхford
Outsourcing your software development to Colombia presents many advantages despite some challenges. Learn how you can benefit from using Colombian developers when building your products and the cost savings that can be had.
Outsourcing Software Development to Colombia: Benefits, Challenges, Costs

While Colombia hasn't always been a hotbed of tech talent, this has changed in recent years. The Colombian government, along with foreign investors, has been devoting considerable resources to improving IT education. The upshot is that Colombia now has a considerable talent pool of skilled software engineers without the insanely competitive market of some other countries. If you're looking to grow your tech team, Colombia provides a very favorable talent-to-cost ratio.

Benefits of Outsourcing Software Development to Colombia

The advantages of hiring software developers from Colombia include:

High time zone overlap with US companies

Colombia's time zone is closely aligned with the US. Your entire team will be able to work together in real time without the hassle of trying to communicate across time zones. Being able to make changes and address issues as they crop up will save you time and money. Working with developers who are 10 to 14 hours removed from your schedule means that it may take days to engage in the type of back-and-forth collaboration that could happen in minutes in real time.

If either of you ever needs to meet in person, the cost of traveling to or from Colombia is much more reasonable than traveling to Asia. As an added bonus, you won't be in a jet lag-induced fog when you get there.

Long retention of tech talent within teams

Colombia is a hidden gem in the outsourcing world. It's not as competitive as many other markets, so you will probably be able to retain your team. The lower attrition rate among Colombian software engineers will save your company time and money that would otherwise be lost to a higher turnover rate.

Robust IT infrastructure with increasing foreign investment

With both foreign and domestic entities investing in Colombia's IT infrastructure, it now boasts more than 5,000 tech companies, including Globan, Rappi, and Hubspot. As one of the leading suppliers of IT services in Latin America, Colombia is coming into its own as a leader in developing software, mobile apps, and games.

Medellin was recently crowned the "Smartest City in the World" because of its extensive use of artificial intelligence in applications such as driverless cars. It's known as the Silicon Valley of Latin America and is home to Ruta N, which helps incubate local startups. In 2017, Ruta N, labeled one of Fast Company's most innovative companies, helped launch The Creation Laboratory to help area companies develop 800 prototypes. This growing infrastructure has created an extensive talent pool for outsourcing software development.

Growing talent pool as a result of increased training in engineering

The Colombian government has invested heavily in tech education. Medellín invests 40% of its budget in education. Colombia focuses on a project-based and collaborative approach to education, which is a boon to software companies that seek these skills. Their STEM education is based on an interactive, problem-focused model that trains software developers to be experienced problem solvers who are home in cooperative teams.

Colombia is home to top-of-the-line postsecondary tech schools like the Technological University of Pereira and the Pedagogical and Technological University of Colombia. In addition to graduating a large number of Ph.D. software engineers, these tech-specific schools train developers in all aspects of software development.

Competitive labor cost

The Colombian Peso (COP) is the official currency of Colombia. Colombian developers make significantly less than developers based in the US, with an average annual salary of $43,381,255 COP, which is around $11,616 USD. The average salary of a software developer in the United States, on the other hand, is about $72,692 USD. The exact amount you pay will depend on a variety of factors, but there's no doubt that it costs much less to hire Colombian software developers.

High Quality

Hiring the best talent is crucial to growing your business. The talent pool in your local area may be limited, or it may be too expensive to hire as many developers as you need. Outsourcing to Colombia can help you overcome these hurdles, providing top-quality developers at a lower cost.

Colombian software developers are very well trained, so you don't have to worry that outsourcing will result in lower work quality. The Colombian educational system prioritizes STEM education at a young age. Foreign investors from around the globe have also invested in Colombia's IT industry, including IBM's AI center in Bogotá.  

This investment in Colombia's IT industry has turned out a large pool of qualified local talent. With giants such as IBM driving the demand for qualified developers, Colombia's IT education system trains their graduates to work to the same professional standards you're accustomed to finding in the US. You don't have to worry that you're compromising on quality when you outsource to Colombia.

Professional English-speaking workforce

Communication is essential for development teams, particularly those that work remotely. Sharing a common language with your team makes the process much easier. Most of your software development processes are probably done in English, so hiring developers who are fluent in English will eliminate the added challenge language barriers can create.

Colombia prioritizes teaching English to its students starting in elementary school, going so far as to set a goal of being fully bilingual by 2025. Since most developers in Colombia speak English, hiring one who is fluent won't be difficult.

While the current workweek in Colombia is 48 hours per week, a recently passed law will gradually lower that to 42 hours per week. Most businesses are open from 8:00 to 6:00, with 12:00 to 2:00 being the standard lunch hours, so the working hours are comparable to those in the US.

Medellín - software outsourcing destination in colombia

Challenges When Outsourcing Software Development to Colombia

Although there are many upsides to outsourcing to Colombia, there are some unique challenges as well. While Colombia is largely stable, it has had some political issues. The labor laws can be complex as well, so it's worth talking to an expert before you hire.

Colombian labor laws

While it's legal to hire contractors in Colombia, the labor laws can be complex. There are hefty penalties for misclassifying contract workers that could leave you open to large fines and possible litigation. You're not required to sign a contract with an independent contractor or even an employee, but it would be wise to do so anyway. As in the US, the Colombian government doesn't consider just one factor when determining whether a developer is an employee or an independent contractor. However, there are differences in the types of factors that are considered. In Colombia, some conditions that differentiate between workers and independent contractors include:

  • Control over how the work is performed
  • Control over working hours
  • Method of payment

Political instability

Columbia has experienced stable economic growth since 2000, with the exception of the height of the pandemic. However, it also has one of the largest rates of income inequality in Latin America. The informal labor market is a contributing factor to this inequality. Protests and civil unrest also led to increasing instability earlier this year. However, Colombia's economic growth and investment levels are expected to bounce back in 2022.

Costs of Hiring Colombian Software Developers

Average yearly salary rates for Colombian software developers according to Payscale

While the salary any given developer will earn depends on how much experience they have and the tech stack they're trained in, the average ranges from 12 million to 101 million COP, which converts to around $3,214 to $27,055 US dollars. The median salary is $43,381,255 COP, or a little over $11,620 USD. Many developers also earn bonuses that range from 2 million to 5 million COP or $535 to $1,339 USD. You'll probably pay more than this amount since it doesn't include expenses beyond the base salary.

Junior salary rate

Junior developers are less expensive due to their more limited qualifications and experience (usually less than two years). While they have programming skills and knowledge, you can't expect a junior developer to take the lead on a project. However, they can be a great option if you need someone to monitor the performance of your system or do some minor debugging. They'll still need mentoring and supervision, which is reflected in their average salary, around $30,000,000 COP, which is about $8,196 USD.

Mid-level salary rate

Mid-level software developers have more work experience from participating in several projects. With three to five years of experience, mid-level developers can take on more responsibility. You can work on systems development and more complicated debugging projects that are beyond junior developers. If you need software rewritten for efficiency, mid-level developers can usually handle the job.  You can also put them in charge of supervising junior developers. This step-up in skills and experience earns them an average annual salary of $78,000,000 COP, or around $21,311 USD.

Senior salary rate

Senior developers can head up almost any project you have. They have over five years of experience in all stages of developing, testing, and maintaining software. Their experience qualifies them to work independently and create solutions to complicated problems. If you're hiring a team of less experienced developers for support, a senior developer can supervise the team and mentor the less-experienced members. As you'd expect based on their qualifications, senior developers earn the highest salaries, averaging $96,000,000 COP annually, which is around $26,229 USD.

Specialized senior developers, such as team leads and architects, earn an annual average of $120,000,000 COP, or $32,786 USD.

Average monthly salary rates by tech stack

Another factor that affects the average salary of Colombian developers is their tech stack specialty. The average salaries in USD for a Colombian developer versus a US developer by tech stack is listed below:

NodeJS: Colombian developer - $15,328, US developer - $90,685

JavaScript: Colombian developer - $14,590, US developer - $86,407

AngularJS: Colombian developer - $16,510, US developer - $81,791

PHP: Colombian developer - $12,923, US developer - $81,546

WordPress: Colombian developer - $13,579, US developer - $57,503

.NET: Colombian developer - $15,573, US developer - $79,190

Comparison of hourly salary rates for senior developers vs US equivalent

If you're planning to pay developers by the hour, it'll cost between $10 and $18 USD per hour. The lower range is what you'd expect to pay for a junior developer, while the higher range is the average cost for a senior developer with more in-demand skills. In contrast, you'd have to pay similarly skilled US-based developers between $50 and $68 USD per hour.

How to Hire Remote Developers in Colombia

You have several options when it comes to hiring developers in Colombia. Some of the most popular routes include:

Colombian job boards

Some popular Colombian job boards are:

Opcionempleo

Computrabajo

La red

Elempleo

Buscojobs

You can use these job boards to contact Colombian developers and put together your own team.  Hiring off of job boards is a multi-step process that can take quite a bit of time. Putting some effort into your ad upfront will save you time later. Because a job ad can generate thousands of responses, you will want to be as specific as possible to weed out respondents who aren't qualified.

When you're writing your ad, think of a specific but straightforward title. If you're looking for someone qualified in Go, include that in your title instead of advertising for a more generic software developer. Include a bullet list of requirements in your description. It's best to make it clear what's non-negotiable versus what's nice to have but optional. Including information about salary and benefits in your ad will save you from having to respond to a lot of repetitive questions.

Once candidates start responding to your ad, you can start sorting through resumes and interviewing the most qualified ones. After an initial interview, a second interview that includes a time-bound test is an excellent way to evaluate their skills as a developer. These types of tests can be labor-intensive to evaluate, though, so you may want to save them for after you've narrowed down the field to your top few picks. Before you commit, you may want to have the developer you're considering run through a trial with your current team to ensure they're a good fit.

Job boards can be a good option for finding developers. It's usually fairly cheap to advertise, but it's a time-consuming process. Don't forget to include time for checking references. Ask about their performance and how well they collaborated. Prioritize soft skills and communication along with technical talent to be sure your team will be able to work as a unit.

Traditional software outsourcing companies

There are also traditional Colombia-based software development companies that you can use for outsourcing. The biggest concern with outsourcing from these companies is that there's no guarantee of quality. The best you can do is ask for references and check review sites.

Here are some tips to help increase your success if you work with Colombian outsourcing companies:

Check credentials. Ask for referrals, testimonials, and reviews when you're choosing a developer. It's always worth following up thoroughly with clients they've worked for in the past to find out if they were easy to work with and reliable. Planning a face-to-face meeting or a Zoom call before you hire someone will give you a better idea of how they'll fit in with your company culture as well as how they think on their feet.

Set expectations. Your communication skills are just as essential as those of any developer you choose to hire. Provide a timeline that includes deadlines for every aspect of the project. Schedule frequent check-ins to evaluate progress and adjust as needed. This should be done early and often. Keeping everyone in sync will take a lot of hands-on effort. As the saying goes, "You can't overcommunicate with a remote team." Clearly communicate any delays and revised timelines to everyone.

Provide technical oversight. Ultimately, you'll be the one responsible for following applicable regulations such as data protection laws, so don't bypass having someone you trust check up on your developers. This is particularly important in cases where violating regulations can lead to steep fines or litigation.

Talent marketplaces

If the process of hiring developers from Colombia sounds like too much on your already overloaded plate, a talent marketplace may be a better option for you. Revelo is a tech talent platform that connects developers in Latin America with employers in the United States. All of our talent is highly qualified with the most in-demand tech skills. We do the screening and vetting for you, so you don't have to spend your valuable time sorting through unqualified applicants.

Revelo doesn't provide independent contracts, so you'll be hiring employees, but that offers some significant advantages:

No wasted time. As we've outlined above, hiring from job boards or traditional outsourcing companies will take a while. Even if you only get qualified candidates, the interviewing, vetting, and testing will still take weeks or months of your time. At Revelo, we have a large pool of qualified talent who are ready to get started on your projects as soon as you are. In today's competitive, fast-paced business environment, getting started immediately can give you an important advantage over your competition.

Peace of mind. Revelo offers a two-week free trial, so you don't have to commit unless you're sure it's a good fit. We screen all of our talent pool, so we can vouch for their skills. Between that and our free trial, you won't have to worry about hiring unqualified employees. You can rest assured knowing you're hiring the best developers without any risk.

Ease of processing. Revelo handles all of the paperwork and legal issues. Your specialty is running a business, not employment tax law.

Our complete, one-stop platform takes care of your employees' salary, benefits, legal requirements, and perks. Your team will feel like a cohesive whole since your Colombian employees will be able to seamlessly integrate with the rest of your business.

Conclusion

Although there are some pitfalls you should watch for, Colombia is a great option for outsourcing. There will undoubtedly be some additional complications, but the advantages outweigh the disadvantages. The main benefits include:

Quality of talent. Colombia's tech education has become outstanding because of government and private investments. Colombian talent is represented in all different languages and tech stacks. You can find a qualified developer in whatever skill you need. Colombian developers have been trained in communicating in English and professional practices that deliver quality, reliable results.

Real-time collaboration. Your team won't have to waste time and money trying to communicate across incompatible time zones. You can collaborate and problem solve in real time, making it easy to move ahead quickly with your project. You won't get stuck for long hours waiting on a developer to answer a question, only to find there's a follow-up issue that now has to wait another day. This advantage alone represents a significant cost savings when you consider the value of the rest of your team's time.

Retaining developers. Although Colombia is moving to the forefront of the tech industry, it hasn't reached the level of competitiveness found in some Asian countries. Because of this, it's a great time to hire Colombian developers since they are more likely to be stable employees. Constant turnover can grind your business to a halt. If you hire a Colombian developer and treat them like a valuable member of your business, they are likely to stay with you for the long term.

Lower cost. Colombian developers are a bargain compared to US-based developers. Even developers who earn high salaries in Colombia make significantly less than you'd pay in the US. You will incur some additional expenses such as taxes and other costs involved in complying with Colombian labor law. However, you'll still see significant savings overall compared to hiring an equally skilled developer in the US.

When you're ready to experience the benefits of hiring Colombian developers for your business, reach out to our team to find out how we can help you.


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