6 reasons for outsourcing software development to Chile in 2024

Celebrated fondly as the land of poets and known widely for its beautiful art galleries, fantastic wine, graffiti, and street art, as well as the sumptuous local cuisine, Chile today is also a fine example of a rapidly growing modernized nation with several thriving industries, one of which is software development. As unexpected as this might sound, the country has been investing significantly in skilling and encouraging young developers, and several factors such as improvement in infrastructure, similar time zones with the US, affordable cost of hiring, etc., prove that it is smart to hire software developers from Chile.

What should you know about Chile

• Capital: Santiago
• Currency: Chilean Peso (CLP)
• Language: Spanish
• Timezone: GMT-3
• Population: 19,493,184
• A number of developers: 61,000+
• Average developer’s salary: $ ⁽*¹⁾
• Business Climate: A3 ⁽*²⁾
• Risk Assessment: A4 ⁽*³⁾
• Political Stability: 0.1 ⁽*⁴⁾
• Ease of doing business: 72.6 ⁽*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.

Advantages of Chile as a software outsourcing destination in 2024

Flourishing education sector and growing tech talent of Chile

Until the early 2000s, Chile was experiencing trouble on the education front because of high dropout levels at the primary and adolescent schooling levels. However, over the decades, the Chilean government made major investments and efforts toward education, spending 21.3% of its total expenditure on the education sector in 2017, which has led to an improvement in Chilean education standards.

As for now, around 73% of children at the age of 3-5 are enrolled in early childhood education. In addition, 4% of children already get primary education. The Chilean government also helps in education provision by covering up to 90% of expenses.

Chile has several well-ranked universities that offer great courses in software engineering, development, and other technical studies, such as the University of Chile, which is ranked 8th in all of Latin America. The University of Chile’s Department of Computer Sciences is highly renowned for producing top-quality talented IT experts and software engineers and leading many of the nation’s technological innovations with its research and widespread laboratories.

According to Coursera’s Global Skills Index Report 2022, Chile is in the top 10 among countries in the LatAm region in Data Science with the best performance in Data Visualization. The Data Science rating was built based on competence in such technologies as Python, SQL, R, Cloud APIs, NLP, and so on.

Source: Global Skills Report by Coursera, 2022

Chile is also among the cutting-edge countries in Software Engineering and got to the top-10 Latin American countries in the category “Technology” that includes such competencies as JavaScript, Web Dev, UX, Cybersecurity, IoT, AI, Cloud Computing, and others.

Thus, a US company seeking offshore software development from Chile will certainly be delighted at the quality of talent churned out by Chile’s universities and software sector.

Innovation and supportive IT infrastructure in Chile

As the wave of technological growth spreads throughout Latin America, many countries are gaining a footing in the ICT and software sectors and are growing rapidly. Chile is expected to lead this growth and development as the IT industry of Chile has been leading on fronts such as the Internet of Things, big data, and sensor applications and has been encouraging the rise of tech companies that fuel innovation.

One of the segments in the IT market is outsourcing, which is projected to grow by $0.66 billion in 2024. If talking about revenue growth of the whole IT field, it is expected to expand by 7.18% each year and reach $1.99 billion by 2027.

92% of the software sector is situated and flourishing in Santiago, with a large number of growing innovators, tech creators, and highly educated professionals and developers who are as skilled as they are multilingual, speaking fluently in English, a significant plus for US companies seeking developers from Chile.

In recent years, Chilean law has also been adapted to encourage foreign investment and participation of start-ups by enabling visa acquisition within two weeks for foreign investors. This has sped up the technological growth of Chile and has also created more opportunities for software developers to hone their skills and come up with innovative solutions. Considering the very happening and active tech scene in Chile currently, it is indeed a good time to hire overseas programmers from Chile.

Real-time communication with the development team from Chile

A major benefit of software development outsourcing from Chile is that there is no time zone difference between Chile and the US East Coast and only a three hours gap with the West Coast, which makes this country a perfect choice for US-based companies when considering outsourcing. The time difference between Chile and Western Europe is five hours.

Many Asian countries such as China and India are losing out on outsourcing opportunities from the US these days due to the massive 10-12 hour time difference, but Chile doesn’t have that issue.

Due to the zero time difference, it follows that developers in Chile would be most active and working in the same time frame of the day as the US company, which means faster and easier communication as well as reduced response time. As a result, US companies that choose to hire remote development teams from Chile can expect timely and expedited completion of projects, swift resolution of queries and issues, and perfect real-time communication.

The same team throughout the project when working with Chilean software development companies

Due to the ever-growing nature of the Chilean software industry and the significant presence of successful software companies in the country, this sector is a good place for Chilean developers to work in, and the rate of retention is high. Since these developers are open to coding challenges and have an environment they can thrive, they feel less tempted to leave their current company or team and move elsewhere.

For a US company seeking offshore software development from Chile, this is great news because it entails that the development team you hire at the beginning of your project will likely stick with you throughout the entire project. That means there is no loss of information, or technical knowledge, and most importantly, heavy loss of time is avoided, which would have occurred if the developers tended to shift jobs frequently and happened to move on in the middle of a project.

Having the same team working with you from start to finish is very important for the project’s health and success, and this is something you can be assured of if you choose outsourced developers from Chile.

Multilingual developers and professional service of software development in Chile

When US companies think of outsourcing software development from Chile, one key concern is the language barrier that could make communication difficult between the Chilean developers and the US company. However, that is not likely to be a problem in Chile because the Chilean education system has been working hard to improve English communication proficiency in professional industries.

As a matter of fact, in 2022, Chile’s score on the English Proficiency Index was 524, a distinct improvement over the decade, and was placed at rank number 45 out of 111 countries for the same parameter. Hence you can rest assured that if you hire software developers from Chile, they will be able to communicate fluently in English with you, making the project experience smoother and much more convenient when combined with their highly professional services. 

Chilean developers can also speak Spanish, which is an added advantage because Spanish is also commonly spoken all over the US. US companies can be assured that Chile’s software developers’ proficiency is increasing every year, so you will get the same high quality of work you would expect from a US developer. What’s more, when you reach out to hire the developer team through YouTeam, you get to choose which developers you want to work with. That way, you can see for yourself if the team is the right fit for your needs and proceed accordingly!

The cost advantage of outsourcing software development to Chile

A key reason for US companies to choose outsourcing software development to Chile as a top option is the massive cost difference in hiring a Chilean software developer. While the average salary earned by a US-based software developer is around USD 102,124 yearly, a software developer in Chile is paid around CLP 51,553,164 (USD 65,472 approximately) a year. Thus, hiring a developer from Chile will cost the US-based company a lot less than hiring a developer from the US.

Not only does this mean significant cost savings, but the quality of work received is still very high, as any company would desire, without having to pay a huge amount. It is a big advantage for US companies, making Chile all the more attractive as a country to outsource teams. Further, the outsourcing market in Chile is not so competitive yet globally, as the country hasn’t fully realized its potential in that sense, so this is the perfect time to hire Chilean developers at affordable rates.

The cost of hiring software developers from Chile

Depending on the tech skills, soft skills, experience, and location, developers’ rates differ greatly. Learn more about average software engineers’ salaries in Chile due to their technologies and seniority.

Salary range between junior, middle, senior, and lead developers in Chile

Chile software developer salary depends on their experience and seniority. In Chile, tech specialists with 2-5 years of experience earn 22% more than junior developers. After five years of tech working experience, the salary tends to grow up to +28% of the previous rate. When specialists hit the ten years experience mark, their salary increases by 16%.

The average salary of junior software developers in Chile is USD 48,880 a year. A middle software engineer earns, on average USD 62,591, and a senior developer earns USD 85,750 a year.

If you want to hire a tech team lead or an experienced full-stack software engineer from Chile, such specialists’ average salary is USD 101,280.

Salary range depending on software development technology

If you want to hire two junior or middle developers with different tech skills, their salaries may differ a lot. We have gathered information about developers’ salary ranges due to the popular technologies.

In the table below, you can see data from Salary Explorer about developer rates in Chile and in the US. There is a huge gap, and developers from the US are significantly more expensive. In the right column, you can see the data from the YouTeam platform, and the numbers are very different.

This is due to the fact that in the first column, the salaries usually do not include taxes and any additional expenses. The numbers mean the money developers earn for their work per year. If you hire a developer on local job boards and want them to join your team, you have to pay for their workplaces and provide your tech team with equipment.

When you hire developers with YouTeam, you get access to a huge database with 50,000+ vetted engineers from top outsourcing partners globally. There are no freelancers, you can hire only quality software developers that work in tech companies. So, the salary mentioned in the spreadsheet is the full sum you have to pay for hiring a developer from Chile.

*In the first column, you can see the basic level of Chilean developers’ average salary. This salary relates more to hiring in-house engineers in Chile and it does not include any taxes and benefits.

Hire developers from Chile with YouTeam

Hourly salary rates to hire senior developers

When you hire senior developers, it’s not enough to only know the average rates for a specific technology. That is due to the wide gap between junior and senior salaries, from where the average rates are calculated. In the table below, we have provided you with the average senior rates per technology in Chile and the US.

In the first column, you can find hourly rates of US senior developers based on Glassdoor and Indeed data. In the second one, there are rates from Chilean vendors based on the YouTeam platform if you decide on staff augmentation.

Source: SalaryExpert, Glassdoor, Indeed, YouTeam

What to watch out for when deciding to work with software developers from Chile

Chile and its software development industry have proven to be quite reliable when providing outsourced developers for other countries. However, in arrangements such as remote outsourcing, there are always a few things you should watch out for and take care of before committing to hiring developers for the project. These pointers will help you get your project off to the right start.

• It is recommended to have a technical person on your team who can keep a check on the developer’s work, particularly to look after the technical aspects. With such a specialist, you will be able to avoid severe errors in the project and hence save time and effort. If you skip this and choose a non-technical person to handle this aspect instead, it is a huge risk as valuable time and resources may be wasted due to errors.
• Before you go ahead and hire overseas programmers from Chile, do ensure that you have been through the developer’s profile carefully and have assessed their skills and performance standards very well. You can ask for reviews of the developer’s work on different projects to gauge whether they will work well with you and your team or not before you make the final decision to hire.
• Timescales and project completion dates are crucial to every development project, particularly remote ones. Hence make sure that you discuss all such logistics and necessary details regarding expected delivery dates, schedule of the project, expected response time, etc., before proceeding with the hiring.

However, even after you have gone over these steps and have succeeded in hiring the developers, there are still a few points you should remember during the project:

• Since it is a remote project, try to convey as clearly as possible that timelines and dates decided upon prior to the project should be maintained and should not be negotiable unless an emergency comes up on either side. In case the fixed dates cannot be met, the side encountering the problem should inform the other team immediately and keep them updated. If you set a clear precedent right in the beginning regarding deadlines, the developer team will have a clear idea of when to complete the work by, and your project will be wrapped up in time.
• Just like you would need a technical person to assess the developer’s work prior to the project, you will also need a person like that throughout the entire project. This person will need to oversee the development work and act as a go-between for you and the developer team by identifying errors or giving advice that is valuable for successfully completing the project.
• Always stay in touch with the developer team during the project and communicate with them regularly. When you choose to hire software developers from Chile and start the project with them, open communication will help them assess your needs optimally and will also let you monitor their progress carefully.

Chile is a very safe and trustworthy destination to outsource software development work to, but the above-mentioned pointers are things you should keep in mind whenever you seek outsourced services from any country. Also, although remote outsourcing has many benefits, it also carries its own sets of disadvantages. It is essential to know both the pros and cons of outsourcing to a particular country before investing your time and money in the venture. Read on to get a sense of the possible difficulties you can encounter when outsourcing from Chile.

Disadvantages of offshore development outsourcing to Chile

In the past two decades, since outsourcing became a popular trend and business activity worldwide, there has been quite a distinct shift in choosing which country is best to seek outsourced work from. Due to the massive difference in time zones between the US and UK, many countries in Asia have gone down in preference, while Latin American countries like Chile have surfaced at the top. Some countries like India have been subject to nationwide IT scandals, such as the fall of Satyam, once a top Indian IT company, and others like China have lost trust and respect due to copyright violations and often the substandard quality of work. While Chile is also a top destination for obtaining outsourced professional services, there are certain drawbacks to outsourcing from Chile as well.

Chileans often think that the government did not consider the Chilean IT sector’s growth a priority in the past decade. While foreign investment in Chilean startups was encouraged significantly, it is often thought that preparing the software sector for outsourcing has not been dealt with well. Another concern identified by many foreign companies was that they could not find enough developers in Chile who could speak English fluently, and this language barrier could create a massive problem in the long run for bigger projects.

However, it is notable that Chile’s English proficiency has risen considerably over the past decade, and the language issue is slowly leveling out. At any rate, US companies looking to hire software developers from Chile can always check the developers’ language skills by interacting with them before hiring, so it is not a major issue. Moreover, Chile’s fairly stable economy, peaceful political atmosphere, and increasingly modernized approach to the world are the only visible disadvantages of outsourcing.

Hiring remote developers from Chile

If you decide to engage a software developer from Chile, there are three main options: use local job boards to find candidates, contact outsourcing companies from Chile, and use marketplaces for hiring vetted developers worldwide.

Here is a list of top job boards in Chile, where you can look for needed tech specialists or create your vacancy with a list of requirements:

• Laborum.cl—22,403+ open vacancies
• Chile Trabajos—36,801+ open job offers
• Opcionempleo—198,512+ open vacancies

Keep in mind that in the case of in-house hiring, you need to take care of all legal employment aspects. Below are some of the working conditions in Chile.

Working hours: maximum 45 hours/week, 9 hours per day.

National holidays: 15 per year plus regional holidays.

Taxes: employer—10% of employee salary, employee (individual income tax)—up to 40%.

Bonuses: 2 yearly bonuses.

Vacations: 15 days after the first year or 1.25 days per month.

Leaves: maternity leave (6 weeks prior to birth and 12 weeks after childbirth) is paid by the state; paternity leave (5 business days) is paid by the company.

Probationary period: NA.

Termination fee: a fee equal to 30 days’ salary.

You can also do research and contact the top software development outsourcing companies in Chile. However, the top dev shops do not always have the required tech talent, and it can be a long process of searching for the needed software engineers with the required skills.

Another option is to try YouTeam—the #1 solution for rapid engineering staff augmentation. The platform provides you with access to 50,000 pre-vetted engineers from top outsourcing companies worldwide. The hiring process is much faster with this solution.

Key takeaways

Today, there are many different choices of countries for US companies seeking outsourced development, but Chile is one of the most attractive ones out there currently. This is due to the presence of several benefits of offshore software development in Chile: from the lower cost of hiring skilled and professional developers to a guarantee of highly qualified developers produced by Chile’s growing education system. All in all, here are the key takeaways as to why Chile is a top destination for software outsourcing:

Education and skill development: Chile produces thousands of highly skilled software professionals every year who are encouraged and supported by the country’s swiftly growing education sector and are provided many opportunities to pursue software development in the country’s top technical institutes.

Innovation and growing infrastructure: Chile’s software industry has demonstrated a keen willingness to innovate in the field of development. These efforts are continually supported by the country’s IT companies and tech parks.

Real-time communication: The zero time difference between Chile and the US ensures that all the communication between the developers and the US company is in the current time, and hence, you are assured that response time is quick and the project is completed timely.

Same developer team throughout the project: Due to the high amount of retention in Chilean tech companies, you are likely to be able to work with the same developer team from the start to the end of the project, as Chilean developers are not very likely to switch jobs and teams frequently.

Professional quality of work: Not only are Chilean software developers highly dedicated to providing top-notch services, but they can speak fluent English as well as Spanish, which makes the entire project experience free of miscommunication.

Low hiring cost: A great advantage is that you will get superior quality of development work from the Chilean development team at less cost than you would incur if you had to hire US-based developers of the same skill level. The Chilean market is not very competitive yet, so you get good savings when hiring developers from the country.

Want to learn more about hiring developers from Chile? We’ll be happy to tell you about the possible benefits and pitfalls of software outsourcing to Latin America. Book a call!