Nearshore Outsourcing in 2019: The Growing IT Talent Pool in Uruguay
March 7, 2019
As part of our ‘Nearshore Outsourcing to Latin America in 2019’ series, today we’re sharing some insights into the growing talent pool in the Uruguayan software industry, and we’ll be walking you through our process for hiring and training staff here at VAIRIX.
We regularly get contacted by companies and peers from around the world who are struggling with issues like fast growth and talent shortage in their home market and are therefore looking to reinforce their teams by connecting with a development partner. And the number one question we get asked by them during our first conversations tends to be: How easy is it to find talent in your city or country, and how fast can I expect to get my team set up?.
For companies that are looking to set up dedicated remote teams in short time frames, making sure that their chosen vendor can supply the right talent for their specific needs on demand is a top priority. And while we have found that most people are usually aware of the key benefits of South America’s nearshore outsourcing model, which include competitive costs, cultural alignment and good time zone overlap with the US, we thought it would be helpful to provide a more in-depth look into how Uruguay’s IT workforce evolved, and how they have helped position our country as one of the top outsourcing destinations in Latin America.
So how exactly does a country with a population of only three and a half million become the top software exporter per capita in the region, and third in the world?
Well, there are many factors that come into play, but it all starts with a razor-sharp focus on education and a good amount of forward-thinking by our government.
An education system built to last and adapt
Two of the key features which make Uruguay stand out from its neighbors are our progressive, high-quality education system, and our workforce’s easy adaptation to new technologies.
Free access to the education system in Uruguay, all the way from pre-school to university, dates back to 1876 and laid the groundwork for our current prosperity and ongoing growth. Attending school and high-school is not only free but mandatory, and as a result, our country can boast of having the highest literacy rate in Latin America, at 98.5%.
Another initiative that has been instrumental in shaping our workforce is Uruguay’s implementation of the One Laptop Per Child model under the name of Plan Ceibal, which was first implemented in 2007 and has since provided hundreds of thousands of laptops and no-cost Internet access both to students and teachers throughout the country, with the goal of bridging the digital gap between those who have access to technology and those who don’t. The project has evolved to include English as a second language and Robotics as part of its core syllabus, and as a result, 100% of school students at the age of 15 have already completed at least three years of English and two years of computer science. This country-wide initiative is supported by close collaboration between teachers and government in the planning, evaluation, and improvement of the project. Moreover, 4.5% of the country’s GDP is invested in education.
Another key differential that helps Uruguay stand out in the region is its high-quality universities. So much so that getting a computer engineering degree in our country, which takes five years on average, is equal to getting a master’s degree in the United States, in terms of syllabus content and quality. Moreover, 75% of students enrolled in IT-related degrees read English, and 55% speak it.
In addition to these firm educational foundations, it’s worth highlighting that Uruguayans tend to enter the workforce while they are studying at university. Because Uruguay doesn’t have the equivalent of the college dorm experience in countries like the United States, it’s very common for students to have their first work experience as early as the age of eighteen with the goal of becoming financially independent.
Some universities even require their students to take part in internships as a requisite for graduating. As a result, by the time they get their degrees, most graduates will already have either an ongoing full-time job or some relevant work experience in their field. This not only helps advance their careers at a faster pace but is also a big plus for the more than 700 tech companies that are hiring for experienced talent to join their development teams.
So how do software development companies in Uruguay hire and train their talent? Maybe the best way to illustrate this is by going over how we handle this whole process ourselves at VAIRIX.
How we hire and train our staff
As we have described so far, there’s an exceptional talent pool for us to tap into in order to find the right fit for our staff augmentation and product development teams. Our recruiting process is done through a series of different sources, including recommendations, advertising on social and on university job boards, and working with a specialized HR firm which regularly sends pre-vetted candidates our way.
Every candidate we get in touch with goes through an initial screening process where we assess their education background, their technical skills and fit, their work experience, and their English communication skills. They will usually have a couple of interviews with our leadership, and depending on their level of expertise, they might be asked to perform a technical challenge.
Once a new hire joins the Vairix team, they will go through an induction process where they can become familiar with our day to day workflow, processes and culture. This typically takes a week to complete and includes coaching from our leadership, as well as a series of simulations of potential work scenarios they are likely to face. The main goal here is both for our new teammates to feel comfortable as they ease into their new work environment, and for them to be able to polish their skills and processes before actually working on their first project with us.
That’s why it’s also usual for our new hires’ first assignment to be as a shadow member in a maintenance project, where they will mostly focus on learning the code, the structure and what the project entails, all while getting to know their teammates, so that when they effectively join a project they will already be able to produce results.
Aside from this initial induction process, all of our staff receive continuous training in the form of internal workshops and tech presentations, which we organize on a regular basis. In addition, we also provide English lessons for anyone who needs some language support.
Talent Retention: Giving the right support and opportunities
Talent retention is another key area where the IT industry often struggles, and one that we also get asked about quite frequently. While it is true that our industry is highly competitive all over the world and this creates a higher turnover rate than is usual, there seems to also be a pattern where companies that grow at a very fast pace are the ones who are suffering the most in this area.
While researching employee reviews from these kinds of companies, one finds that most employees are disappointed by the negative changes that came along with their company’s growth. Many of these reviewers point out that the startup feel the company used to have, with a flat hierarchy and focus on quality, is now gone, and has been replaced by a more bureaucratic and chaotic environment, where they no longer feel valued or comfortable.
This shouldn’t really come as a surprise to any of us. Growing a company beyond 50 developers is incredibly challenging and requires expert management, so these companies do tend to have a harder time retaining talent, and it’s not uncommon for some of them to have attrition rates of up to 50%. In fact, some of our team members at Vairix have worked for such companies in the past and left because they weren’t receiving the right experience and support in terms of training, management, and leadership. As a result, they looked around for smaller boutique companies like ours which tend to focus on quality, having the right number of partners, and growing at the right pace.
So when it comes to retaining talent, there are several aspects that we take into account, but our biggest focus is on creating the right work environment for our staff. This mainly involves providing direct access to our leadership, as well as providing the right training and opportunities for career advancement within the company.
The fact that we work exclusively for a select number of partners in the United States is one of our key differentials. Working for the US not only enables us to pay higher wages and therefore tap into some of the best local talent, but in addition, our teams get to work side by side with very innovative companies on challenging projects, and most of those projects involve working with the latest trending technologies. The kind of projects they get to work on contribute to their skills and their growth as developers, and the experience they receive from the projects, combined with their continuous training in new technologies, prepares them to take on bigger responsibilities in the future. This is really what they aspire to in this profession: doing work that matters and that helps advance their careers.
Setting up your dedicated team
Finally, going back to our original question: How fast can you expect to get your team set up by a software development company in Uruguay?
The truth of the matter is that this will always ultimately depend on your specific needs in terms of team size, skills, and time frames, meaning, how many resources you are looking to hire, what skills or technologies you’re looking to use, and how soon you would need the team to start working.
Sharing this information in as much detail as possible will help your vendor provide you with a much more accurate answer to this question, as they will be able to know if they will have the capacity for taking on your project within your given time frame, while providing some of their best talent to avoid a big learning curve. Our average team size for a given project at VAIRIX is between two and four developers, and the average project length is between two and six months, so your time frame might coincide with the end of one or several of our projects, where those developers become available. It’s not that usual for software companies in Latin America to have resources on bench who are inactive, however, a much more common scenario is for developers to work on maintenance projects, so there are usually a number of them at disposal if new opportunities arise.
We hope this article has helped you get a clearer picture of the Uruguayan IT industry. And if you’re looking for a partner to help with your development efforts, feel free to get in touch to meet our team and talk some shop.