In today's economic climate, there is significant pressure on companies to "onshore" or "re-shore" jobs back to the United States. While this may be viable for some industries, for technology and software development, a 100% onshore strategy is not just impractical — it's a significant competitive disadvantage. This article makes the clear, data-driven business case against onshoring all development and for a more strategic, globally distributed model. The central tension is between political sentiment and the market realities of building a world-class engineering team.
The talent pool is too small
The demand for elite software engineers in the US vastly outstrips the supply.
- Extreme competition. You are competing for the same limited pool of talent as Google, Amazon, and every well-funded startup, driving salaries to unsustainable levels.
- Skill gaps. For specialized skills in areas like AI, machine learning, or specific cloud technologies, the domestic talent pool is even smaller, making it nearly impossible to hire quickly.
- Lack of geographic diversity. Concentrating your entire team in one country makes you vulnerable to localized market shocks and limits your access to diverse perspectives.
The costs are prohibitive
A 100% onshore model is the most expensive way to build a software team, significantly impacting your burn rate and ability to scale.
- Inflated salaries. The median salary for a senior software engineer in a major US tech hub can be 2-3 times higher than for an equivalent engineer in Latin America.
- High overhead. The fully loaded cost of a US employee, including benefits, payroll taxes, and office space, adds another 30-50% on top of their salary, further straining your budget.
- Opportunity cost. Every dollar you overspend on an onshore engineer is a dollar you can't invest in marketing, sales, or product innovation.
The nearshore model is the strategic alternative
A nearshore strategy in Latin America directly addresses the shortcomings of an onshore-only approach.
- Access to a deep talent pool. Latin America has a large and rapidly growing population of highly skilled, university-educated engineers, effectively expanding your available talent pool by millions.
- Sustainable economics. A nearshore model allows you to build your team with elite talent at a more globally competitive cost, enabling you to hire two to three engineers for the price of one US-based developer. A partner like Howdy.com provides this talent at a transparent, all-inclusive rate.
- Operational alignment. With time-zone alignment, nearshore teams integrate seamlessly into your existing agile workflows, offering the collaborative benefits of an onshore team without the prohibitive costs.
Conclusion
While onshoring may be an appealing narrative, it is a flawed business strategy for technology companies operating in a fierce global market. The constraints on talent, cost, and scalability create a permanent competitive disadvantage. Howdy.com offers a more pragmatic and powerful approach. We connect you with the top 1% of vetted engineers in Latin America, providing a solution that is not only more cost-effective but also more scalable and resilient.