6 reasons for outsourcing software development to Uruguay in 2024

Home to the delicious gnocchi and among the top 5 producers of wine in all of South America, Uruguay is now also known for churning out excellent software developers as the Uruguayan IT sector continues to experience rapid growth and transformation. It is fantastic news for those companies abroad, particularly the US, who want to hire Uruguay software developers. Uruguay is an excellent choice to seek outsourcing because of several factors such as highly skilled developers, growing infrastructure, low cost of hiring, less difference in time zones, and other attractive benefits.

What to know about Uruguay

• Capital: Montevideo
• Language: Spanish
• Timezone: GMT-3
• Population: 3,426 million
• Currency: Peso
• Number of programmers: 16,000+
• Average developer’s salary: $67,742 ⁽*¹⁾
• Business Climate: A3 ⁽*²⁾
• Risk Assessment: A4 ⁽*³⁾
• Political Stability: 1.0 ⁽*⁴⁾
• Ease of doing business: 61.5 ⁽*⁵⁾

⁽*¹⁾ according to Glassdoor, Senior Software Engineer, 7-9 years of experience.

⁽*²⁾ according to Coface. It includes the ease of running a business, the political situation in the country, and whether the legal system provides fair conditions and business protection for companies. Rating scales: A1, A2, A3, A4, B, C, D, and E.

⁽*³⁾ according to Coface. It refers to the country’s ability to transfer currency for foreign payments. Rating scales: A1, A2, A3, A4, B, C, D, and E.

⁽*⁴⁾ according to The World Bank. These statistics show the political stability and absence of violence. It ranges from -2.5 (lowest) to 2.5 (highest).

⁽*⁵⁾ according to The World Bank Doing Business 2020 report.

Benefits of outsourcing software development to Uruguay

High literacy rate and focus on education of tech talent in Uruguay

A country’s focus on education often determines how skilled and able the future generation will be later in professional fields since education is the foundation of further learning, essentially. Uruguay’s adult literacy rate in 2023 was around 98.43%. It is an incredible number indeed, and the country ranked 1st in South America and 33rd globally for this same stat. Aside from making primary education compulsory, the Uruguayan education system offers free education at all levels of learning. The government has initiated the provision of free Wi-Fi and a laptop to each student countrywide.

The country’s large public university in Montevideo, the University of Montevideo, is known for producing highly talented professionals, including software developers who join the main workforce either in research or as developers for the myriad Uruguayan software IT companies. Therefore, companies looking for offshore software development in Uruguay can rest assured that the developer talent in Uruguay is incredible. You will find nothing but the best in this field of software development from Uruguay.

There’s also a Project Management Institute in Montevideo—an international association founded in 1969—that helps increase Uruguayans’ project management skills.

The growing infrastructural capacity of Uruguay

With over 500 tech companies thriving in Uruguay’s IT sector, it is no surprise that highly talented software developers work in this country. The presence of several tech parks, such as the Pando Science and Technology Park (PCTP), fuels the growth of the software sector in Uruguay. PCTP continually aims to marry business with science and technology to create innovative solutions and products.

Uruguay is among the top development centers in South America to export software development services. Moreover, the National Agency for Investigation and Innovation is a governmental body that supports and funds innovative ventures of different kinds and encourages research and development. Another factor that promotes the growth of IT companies is that these firms are exempt from paying income tax for the money they earn via export or outsourcing of IT services and development work. Thus, US companies should be aware that Uruguayan developers are highly skilled and encouraged in the IT sector. They are a valuable resource that makes outsourcing software development to Uruguay a good choice.

The low difference in a time zone with the United States

The main difference between offshore and nearshore software development is that the partner companies from the last are located in the same time zone or with a minimal difference. Countries like Uruguay have a significant advantage in time zone differences with the United States, compared to countries in Eastern Europe or even Asia, which have a 10-12 hour time gap with the US and are hence not preferable. Uruguay, however, is only one hour ahead of the US, which ensures that when the US company chooses to hire overseas programmers from Uruguay, most of the communication can happen in real-time.

Real-time communication allows more collaboration between the developer team from Uruguay and the US client, so the response time is short. Due to prompt communication, developers can complete the project on time. The likelihood of the developers working around the same time as the US company is high, so little to no time wastes in getting back on queries and fixes.

A one-team experience common for Uruguayan outsourcing companies

Since the software development sector is thriving in Uruguay, providing the country with over $ 1 million each year, most developers are pretty content with their jobs and teams and are less likely to shift from team to team frequently. This high retention of developers spells good news for US companies that want offshore software development from Uruguay. You will work with the same group of developers from the start to the end of the project.

The one-team experience is also really beneficial for the company because the same team throughout the entire project means no disruption would occur, contrary to when developers keep leaving. A smooth flow of the work process guarantees the project delivery within the deadline. Whether you need product development services, web development, creating mobile applications, or even custom software, working with the same team from start to finish is always a benefit that helps your team save time and money.

Professional services of software outsourcing in Uruguay

Many US companies worry about the quality of work they will receive if they seek outsourced development, but in Uruguay, that is simply not a problem. Uruguay’s software developers are very focused on their work because education and learning are critical to Uruguay’s culture. The developers have a keen interest in learning through their work. Uruguay as a software exporter, is known globally for its IT sector proficiency shown in quality testing and assurance. In addition, about 74% of all IT services were focused in the US. So US companies can rest easy knowing that their development work will be in good hands. They get quality software if they decide to hire remote development teams from Uruguay. Uruguay’s work culture and practices are similar to the US’s, making working with Uruguayan developers more manageable and hassle-free.

US companies’ main concern regarding outsourcing services is that the developers may not be able to speak English, and thus, there will be miscommunication and language issues. However, if you are looking to hire software developers from Uruguay, you need not worry about this. Developers from Uruguay are decently skilled in speaking English and scored 49 on the English Proficiency Index in 2022, ranking 8th in English speaking in Latin America. Since the developers from Uruguay can speak English well, you will communicate easily with them. There won’t be any confusion or misunderstanding due to language during the project. An added advantage of hiring the Uruguayan developer team via YouTeam is that during the process, you have the liberty to choose the team you wish to work with and can adequately analyze if the team will be the perfect fit for your needs before hiring.

Low cost of hiring software development company from Uruguay

There is no shortage of skilled developers in the US, but US companies often look for other options due to the high cost of hiring and the uncertainty of the work quality. Hiring software developers from Uruguay instead of in-house significantly reduces costs, and can invest in other things instead. The average salary a developer in the US earns annually is about USD 102,075, while an Uruguayan software developer earns around USD 67,742 annually, which is considerably way lower. That means that US companies that choose to hire Uruguayan developers will have to pay lower hiring costs than they would have to if they went for US developers instead.

Since the Uruguayan market is still growing, it is not very competitive, so companies can enjoy the lower cost of hiring Uruguayan developers for the time being. What’s best here is that although you pay a lower price to hire these developers from Uruguay, the high quality of work they provide is on par with any developer you could hire within the US. Thus, an excellent cost-benefit makes Uruguay a great choice for seeking developers.

The cost of hiring software engineers from Uruguay

Uruguay software engineer salary depends on a few factors such as location, programming languages, years of experience, education, and English level. We have analyzed different local and global sources and gathered software developer salary rates based on seniority level and programming language.

You should consider that most sources provide information about base salary, which doesn’t include taxes, benefits, bonuses, other perks, or service commissions. The actual pay would be higher. Also, the average wage takes from junior and senior developers’ salaries. The gap between them is pretty high, so if you want to hire a senior developer, be ready to pay a considerably bigger compensation than average.

Annual salary rates for junior, middle, and senior software engineers in Uruguay

We suggest the average base salary breakdown from SalaryExpert and Glassdoor.

According to Glassdoor, Indeed

Monthly salary rates in Uruguay based on technologies

As we mentioned before, Uruguay software engineer salaries vary a lot due to the technology they have experience with. In the table below, we provide an average salary rate comparison based on popular technologies. In the first column, you can find information from SlaryExplorer. In the second column, we provide data from Talent.com and Indeed about the same developers in the US.

You should keep in mind that the salaries from the first column are without taxes and additional expenses that occur when you have a developer. It only shows the money developers earn for their job.

Also, we have added the third column to show the rates of software developers from Uruguayan software development companies on the YouTeam platform. These numbers mean the rates that you have to pay for a vetted software engineer from one of the top tech companies in Uruguay.

Hourly salary rates to hire senior developers in Uruguay

The engineer salary rates may give you some understanding of how much you should be ready to spend or how they can vary due to hiring options. Some companies are looking to outsource software development and hire senior developers. So, if you decide to hire a senior developer, an average rate may mislead you. As average rates of senior developers per technology are way higher, the same goes for maximum salary. Take them as a guide.

In the table below, you will find the average hourly rates of senior developers in Uruguay. In the first column, we have provided rates from SalaryExplorer. That is a base Uruguay software engineer salary without benefits, taxes, and bonuses. In the second column, you will find rates of US developers hiring in-house based on Glassdoor and Indeed data. In the third column, you will find rates of Uruguayan developers based on the YouTeam platform. The last ones are rates of vetted software engineers if you opt for staff augmentation service, which also provides high-quality developers but is faster and more cost-effective than in-house hiring.

Source: SalaryExplorer, Glassdoor, Indeed, YouTeam

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What to watch out for when outsourcing development process to Uruguay

When you are looking to hire overseas programmers from Uruguay, you can be assured that it is a trustworthy destination to seek outsourcing. You will receive high-quality work. However, there are still a few points you should keep in mind whenever you go for remote outsourcing. It is essential to consider these pointers before and during the project to complete it successfully without hindrance.

• Since it is a remote project and all communication will occur remotely, be sure to brief the development team right from the beginning regarding timelines, expected delivery dates for the project phases, and when you hope to achieve certain milestones. Discussing these things before starting the project will give the development team an accurate idea of the dates they need to adhere to and prevent unforeseen delays and miscommunications.
• The value of having a technical expert on your side to review the developer’s tasks is enormous. Ensure that you have a technical person on your team who will oversee the technical parts of the project and inform you if there are any errors or queries. That will save you loads of time, effort, and money and ensure that the timelines you fixed earlier are adhered to, and there is no loss in any way to the project.
• Do take the time to review and assess the developer’s work profile thoroughly. Don’t be shy to ask for client reviews of their work, and evaluate carefully whether this developer has the skills you are looking for and will gel well with your team for the project or not. Based on that understanding, you can go ahead and hire the developer if you like the profile.

Now that you have proceeded through the above steps, it is still necessary that you keep some tips in mind during the project that will help you going forward and will avoid any misunderstanding between you and the developer team.

• You will need your technical expert to be present throughout the project, just like before the project. You cannot ask a non-technical person to oversee and guide the development team because that might result in uncorrectable errors due to a lack of technical know-how. Only the technical expert will be able to help here by working closely with the developers.
• Whether you hire software developers from Uruguay or anywhere else, one thing you should be clear on from the start is that if there is any unexpected delay in the project timeline, the respective side should inform the other side immediately. If you give this as explicit instruction from the beginning, there will be very little loss of time and effort as the developers will keep you updated, and as a result, the project will proceed smoothly.
• Be sure to maintain constant communication with the developer team so that both sides have a clear idea of where the project is going and what is expected next and will be able to ask for information/data as needed. Regular communication will ensure that crucial queries are resolved quickly, problems are solved in collaboration, and the project timelines are met.

Although Uruguay is a reliable destination to choose when seeking outsourced development, it is good to follow the tips mentioned above whenever you hire outsourced IT professionals from another country. That is because remote outsourcing has many advantages, but it has a few disadvantages, which you should be aware of before hiring the outsourced teams. Similarly, there are a few drawbacks to outsourcing from Uruguay as well, as discussed below.

Disadvantages of IT outsourcing to Uruguay

In the early years of outsourcing, Asian countries like India and China had the maximum popularity. While still on the list, countries from Asia are not as much in demand anymore due to the vast time zone difference and other issues such as IT scams in the case of India and dubious quality of development work in the case of China. As such, countries like Uruguay in South America have gained popularity as top outsourcing destinations. Many factors make it wise to hire software developers from Uruguay, but there are also possible difficulties and disadvantages.

US companies can run into legal issues regarding employment if the company is not careful enough. Uruguayan employment laws are very different from those set in the United States. Thus the US company will have to classify the job description correctly to avoid legal trouble.

This problem is significant for companies that want to hire developers in-house. But if you find an outsourcing partner in Uruguay—a software company that has already hired developers, designers, and QA engineers in its talent pool—you sign a contract with this company and don’t need to worry about all the employment aspects. Your development partner will take care of everything.

And hiring software engineers from Uruguay via the YouTeam platform makes the whole process even safer because YouTeam works only with trusted service providers with carefully vetted engineers. Because the platform facilitates all questions related to legal aspects, payment, and communication between partners, you have more time to invest in other essential matters.

Another issue that can arise is that although Uruguay’s IT sector is growing in leaps and bounds, there are still some shortcomings concerning the tech infrastructure and R&D facilities, which, while noteworthy, may still not be at par with US standards. It could cause some difficulties in the project process and may lead to a delay in completion.

A final but minor issue is related to political unrest and instability. Although Uruguay is a considerably peaceful nation, the social and civic environment is not free of turmoil. However, this is not likely to occur, as Uruguay has relatively good relations with the US, and major political instability hasn’t happened in Uruguay in several years.

Key Takeaways

Uruguay is currently one of the best options for seeking outsourced development. Among the many reasons why it is wise to seek offshore software development in Uruguay are certain factors, such as the highly advanced and forward-looking education sector of Uruguay, the great focus on innovation and R&D, English-speaking developers, and high professionalism. To conclude, these are the main takeaways of why Uruguay has made it to the list of top countries to hire outsourced developers from.

Developed education sector: Uruguay’s education sector is currently doing very well, with high literacy rates and constant encouragement to learn and study further. The opportunities provided by the universities and facilities like free Wi-Fi enable students to perform well and pave the way for potential software developers.

High infrastructural capacity: Uruguay has more than 500 tech companies now and well-known tech parks that drive innovation in the IT sector of the country while providing new chances of learning and development to young professional developers.

Reduced time difference: Being only an hour ahead of the US, Uruguayan developers can work in real-time in collaboration with US companies. Thus the company can be assured that timelines are met, and there is no miscommunication or delay in response.

One-team experience: Uruguayan software developers tend to stay with one job. Due to this high retention in the IT sector, US companies can expect the same developer team to work throughout the project.

Superior quality services: Uruguayan developers will put in the same high-quality work one would get in the US with their high focus on innovation and delivering quality work. Moreover, most Uruguayan developers speak English fluently, so there will be no barrier to communication.

Cost-benefit: The average salary of an Uruguayan developer is much lower than that of a US-based developer. So hiring a developer from Uruguay means you have to pay less for the same high-quality services you would have had to spend a lot more to get in the US. That is one of the most convincing benefits of software development outsourcing to LATAM in general and Uruguay.

Want to outsource your software development to Latin American countries? Read our other articles about such outsourcing destinations as Mexico, Brazil, Argentina, Colombia, Costa Rica, Peru, Ecuador, and Chile.