The IT outsourcing industry is humungous, and one of the places that have seen significant growth in this niche is Peru. An example that proves how fast the industry is growing is that the Peru Service Summit deals were worth around $160 million—over half of these deals were in the software development sector. It is only one metric showing how huge the software development industry is in Peru. According to AP News, the niche will see a 3.7% growth rate in Argentina, Chile, Brazil, Colombia, Mexico, Costa Rica, Uruguay, and Peru by 2030. That is also one of the main reasons companies outsource their software development needs to Peru. There are a dozen more reasons why outsourcing your software development to this South American country makes sense, and we will be discussing all of them in this article.
What to know about Peru?
- Capital: Lima
- Currency: Sol
- Language: Spanish
- Time zone: GMT-5
- Population: 33,000,000
- Number of programmers: 38,000+
- Average developer’s salary: $38,112 per year
- Business climate: A4
- Risk assessment: C
- Political Stability: 33.8/100
- Ease of doing business: 64.00/100
- Human Capital/Skills: 0.586/1
Advantages of outsourcing software development to Peru
Software development outsourcing is one of the most profitable fields in the industry. The peak in profits is due to the multiple advantages that come with the practice, and taking your software development outsourcing to countries like Peru tends to elevate the entire experience. To highlight this, here are the main competitive advantages that you should expect if you decide to outsource to Peru.
Developers’ Technical Expertise
One thing that has brought Peru one of the leading positions in remote software development is the tertiary education infrastructure. Pontificia Universidad Católica del Perú is ranked 19th in South America based on QS ratings. Several other universities have become key structural hubs for software development growth in Peru. In 2011, the University of Engineering and Information Technology was founded, and so far, it has become one of the most powerful technology centers in all of Latin America.
With a talent pool of more than 30k developers available for hire in Peru, you will be impressed by the variety of programming languages they can assist your company with. Based on a report published by Datanyze, about ten languages share the chunk of the programming-language pie. Namely, PHP, ASP.NET, Lua, CSS, PHP 5.6, Go, PHP 5.3, Java, SQL, and Python. The first three share around 70% of the “pie.” Per the report, PHP cumulatively owns 43.87% of the programming language market share. If there is anything that the past has taught us about software development is that variety is a great thing. Thus, if you need to hire developers with different tech stacks for mobile app development, custom software development, or web development, you can find the needed talent in Peru.
The compatible price is one of the most significant advantages of outsourcing from the US to Latin America or Eastern Europe. The average hourly rate for a software developer in the US ranges from $75-$150. This adds up to an average of $180,000 per year. On the other hand, a programmer in Peru earns an average of $21,336 per year (Salary Explorer)—a huge difference. It is important to note that earnings vary based on experience and the language used for the software being developed. Besides, the wage disparity is also due to the employment type; pay rates for freelancers and outsourcing companies differ.
Although there is a big difference between salaries for software developers in the US and Peru, the same cannot be said about work quality. However, just because the work costs less does not mean quality suffers. Peru has highly-skilled software engineers, and the lower salaries are only due to the lower cost of living.
Software developers in Peru tend to work for the same employer or on projects for years. Once you have chosen a Peruvian company to partner with on a project, you are virtually guaranteed that the same software development team will work on your project from start to release. Talent retention is also another advantage of having your software developments done by Peru-based outsourcing companies. It makes post-project support easier.
Cultural Differences and Geographical Compatibility
The startup culture in Peru strongly resembles that of the US, which most experts use as the benchmark for the software development outsourcing market. Thus, it’s simple to get a Peruvian developer to adapt to a US setup.
The fact is that most Peruvian developers, thanks to their ever-growing industry, have been lucky enough to work with top global software development companies. Experience with different cultures is also part of the cocktail you will get if you decide to take your software development or outsource to the Peruvian market.
Developers from Peru exhibit an alarmingly high level of professionalism and amazing communication skills.
Language is one of the essential points you need to consider when considering Peru. Peru has over 16 recognized languages, with three official languages—Spanish, Quechua, and Aymara. Eighty percent of the population speaks Spanish. Although English is not regarded as an official language in Peru, it is widely spoken. It is mainly due to Peru’s global position as a tourism powerhouse.
Unlike other remote jobs, software development often requires real-time collaboration within a team. It can be difficult with huge time zone differences. It is one of the main disadvantages of outsourcing software development to Asia (India, Philippines). Compared to the 12-hour gap clients have to deal with when working with Asian-based outsourcing contractors. Fortunately, when cooperating with Peru-based programmers, the greatest time difference would be a maximum of 4 hours. This increases overall work efficiency and improves the quality of work because of reliable real-time communication and collaboration. Peru is just 3 hours ahead of California. Additionally, Peru is in the same time zone as New York—and thus, the entire East Coast of the US. Therefore, it makes project management much easier.
Availability of Technical Infrastructure
In Peru, the government and the private sector have created a lot of initiatives to develop infrastructure extensively. Testimony to this is that, according to Oxford, information and communications technology (ICT) investment has surpassed 2.5% of the GDP.
Several hubs have managed to develop a very viable infrastructure for developers in Peru. They have created an astounding startup hub that is well equipped with the latest technologies for software development. It means that there is some variability in terms of the availability of contractors. The government has also been a major player in ensuring that the outsourcing industry is well equipped. In 2019, Peru launched a $110 billion infrastructure development plan. A sizable chunk of the investment was dedicated to IT development. It has already started bearing fruit as the return on that investment has grown exponentially.
Cost of Hiring Software Developers from Peru
One of the considerations that US companies mull over when choosing a destination for their outsourcing needs is the financial implications. To help clear things up, let’s dive deeper into the developers’ salaries and rates and explore what influences these numbers.
Average Salary Depending on the Developers’ Experience
According to Glassdoor, the average annual salary of a software developer in Peru is $25,102. It does differ, though, based on three parameters: experience, employment type, and the language being used. The table below shows the difference in salaries based on the developers’ experience.
|Junior (0-2 years of experience)||$17,320|
|Middle (2-4 years of experience)||$21,000|
|Senior (4+ years of experience)||$38,115|
Average Salary by Hiring Model
However, take note that these are gross salary figures, so exclude any taxes, bonuses, hiring costs, or additional expenses.
Depending on the hiring model you choose—in-house hiring, outsourcing to software development agencies, hiring full-time contractors, or freelance developers, the rates can differ. The table below shows the average compensation according to each option.
|Employment Type||Monthly Cost||Additional Expenses||Time to Hire|
|In-house hiring||$7,500||Recruiting agency fees, job boards commission, bonuses for in-house employees||4-10 weeks|
($55-$75) per hour on average)
|Fixed fee per developer, agency margin||2-8 weeks|
($45-$75 per hour on average)
|No extra expenses because all additional costs are already included in the developers’ hourly rates||4-10 weeks|
($40-$70 per hour on average)
|Platform fee||1 week|
Average Hourly Rates According to Technology
YouTeam can provide you with the needed software developers in two weeks. Just let us know about your requirements, and we’ll find the matching candidates from Peru in 2 days for you to go for the interviews.
Down below, you can see the average hourly rates of full-time contractors from Peru on YouTeam platform.
What to watch out for when outsourcing software development to Peru
Hopefully, you’re convinced that outsourcing software development to Peru is a good idea. The next step is creating a checklist of your ideal outsourcing partner’s software development services. It involves knowing the exact traits and characteristics that you expect from a developer or software development company with whom you’d like to work.
Ask for a Sample of Previous Work
The developer’s technical expertise should always be backed by reviews from previous clients and Github code so that it is easy for you and your teammates to check their backgrounds. If you are not accustomed to technical bits of the whole software development process, it’s always a good idea to ask your technical expert, e.g., CTO or tech lead, to review the contractors’ portfolio or previous projects, and conduct coding tests. It will help you to determine the developer’s technical suitability and help you to understand how they will integrate into an existing setup.
Financials and Timelines
Another essential element that you need to look at after technical suitability is a financial match. It is an integral part of any contract, especially when outsourcing software development. Be sure to discuss points like the total project cost and payment schedule. Most IT service providers prefer being paid by milestones or with monthly invoices. To avoid confusion or misunderstandings, all financial issues should be addressed in the work contract.
These are smaller elements that also need to be considered when choosing a software development partner. These include working hours, the number of people on the team, and the non-disclosure agreement (NDA). Most companies prefer to keep the details of their projects private, and the best way to do this is to require a developer to sign an NDA. It is vital as it helps to protect your intellectual property.
Disadvantages of Outsourcing Software Development to Peru
For all its pros, outsourcing software development is not without its faults. There are some rocky disadvantages of outsourcing that you have to anticipate if you decide to follow the outsourcing route.
Language and Communication
About 80% of the Peruvian population speak Spanish, not English. Peru is ranked in the middle of the pack according to EF EPI ratings, so there are a limited number of fluent English developers. Therefore, precise communication may require extra patience. However, with translator apps and a project manager who is always in touch with the Peruvian team, projects should run as smoothly as ever. Luckily, lately, IT experts are more fluent in English since it’s important in the current competitive software development market.
Peru has been plagued with political instability for years, but lately, things have improved. It is not yet perfect, thus, the business environment may still be a bit harsh due to past political tensions. Protests spiked slightly recently due to COVID-19. This moderately impacted the outsourcing business by affecting the reliability of electricity and, thus, internet stability.
With the pandemic effects dying down, though, things seem to be going back to normal, and political stability seems to have improved significantly. Compared to other LatAm countries, Peru is somewhere in the middle, making this a disadvantage.
Hiring remote developers from Peru
Depending on the hiring model and your needs, there are several options for finding developers in Peru. Let’s explore each option in detail.
In-house Hiring in Peru
There are two common ways to find developers to join your in-house team. Firstly, you can post a job on local or international job boards and wait for applicants to apply. There most popular job board in Peru is Computrabajo. The second option is to search for the best developers and offer them a position. In this case, you can use LinkedIn, for example, and contact the developers who meet your requirements. And you can also look for candidates on different tech forums and platforms like GitHub and StackOverflow.
Outsourcing Software Development to Peru
If you want to outsource your project to a reliable software development agency that can provide you with a needed tech team, you can explore popular listings. For example, Clutch provides lists of top outsourcing companies sorted by technologies, field, or location. You can also check the companies’ reviews from previous clients there.
Hiring Full-Time Contractors from Peru with YouTeam
If you need to quickly hire a team of high-quality software engineers to extend your in-house department, contact YouTeam. We can match you with qualified candidates from Peru within two days. All of our contractors are pre-interviewed, so you can be sure you’ll meet the best-suited developers for your needs.
Peru is not only a perfect tourist destination. It has become a global heavyweight when it comes to providing software outsourcing services. This has mainly been attributed to the country’s startup boom. If you are considering outsourcing software development, Peru is one of the best locations to consider. The six main advantages that come from choosing Peru over other outsourcing destinations should be enough to assure you that you are making the right decision. Like any other destination, hiring in Peru has its challenges. However, if you follow our recruitment strategies and properly vet potential candidates, we can assure you that your company will treasure the benefits.
FAQs for Outsourcing software development to Peru
Is Peru a good choice for nearshore software development?
Yes, it is. Although it is not perfect, the pros certainly outweigh the cons.
How much does it cost to hire a developer from Peru?
Depending on the number of years of experience and the developer’s expertise, on average, annual salaries are around $21,336—or $55 per hour for short-term projects.
How to vet developers when hiring remotely?
The first step is to create a detailed checklist. Once a candidate satisfies the requirements on your checklist, ask for testimonials and previous work. Do a technical review of the developer, and if they check out, you can hire them confidently.