Often, when companies intend to outsource software development or other tech services, they think of Asian countries. However, US companies don't have to look that far. A brimming talent pool is just in the neighborhood: Costa Rica.
Costa Rican software developers are talented, knowledgeable, and adaptable to fast-changing technologies. They are also cost-effective, presenting companies an opportunity to save on their expenses.
Outsourcing software development to Costa Rica can help US companies cut costs and improve performance. It's not surprising that IT outsourcing to Central America is becoming popular, especially among small businesses.
In this guide, we'll take a look at nearshore outsourcing software development to Costa Rica. We'll also discuss the advantages of hiring Costa Rican developers.
Advantages of Outsourcing Software Development to Costa Rica
Costa Rica is experiencing a surge in tech talent, and outsourcing software development there has many advantages.
US Time Zone
Time zone differences can be a major hassle in outsourcing. If there's a significant difference in time zone, it can be hard to communicate with the outsourced workforce since there are only a few hours of overlap.
Fortunately, Costa Rica uses the US Central Time Zone, which means your remote workforce will be available around the same times as your in-office workforce (or the same if you're in a state that is CST).
The benefits of working in the same time zone include:
- Seamless Collaboration: You can easily communicate with your offshore team because everyone has similar work hours. Employees can also collaborate in real time.
- Fewer Meetings: When everyone is working at the same time, it's rarely necessary to schedule extra meetings to touch base.
- Getting Things Done Faster: Since there isn't much lag time, employees can get more work done without compromising quality. Queries can get answered promptly as well.
Thriving Tech Talent Pool
Costa Rica is acclaimed globally for its substantial progress in education and healthcare. The government spends a huge chunk of the total budget on education.
Today, Costa Rica has a literacy rate of 97.92% of citizens over the age of 15. Here are some reasons for this educational growth:
- Scholarships: The University of Costa Rica offers a lot of scholarships to students from low-income families, including free education for some scholarship candidates.
- Reasonable Fees: Even in universities with limited scholarship programs, the fees are low enough for most people to afford.
- Focus on Education: The Costa Rican Ministry of Education focuses on research and development, innovation, and technology to ensure top-notch education.
With many Costa Rican students opting for careers in technology, it's not surprising that the country has a highly skilled talent pool to fill positions in information technology.
During their higher studies, Costa Rican students have ample opportunities for innovative projects and research, particularly in the information technology space. This exposure enables them to gain experience in software development.
Therefore, US companies hiring Costa Rican developers will have many excellent candidates to choose from, since the country has a thriving talent pool of potential employees in software engineering.
Developed Tech Infrastructure
Costa Rica is quickly becoming a focal point in the global tech space, since many top companies, such as IBM and Intel, have set up development centers there.
With innovations in technology and continuous growth in potential talent, San Jose is becoming synonymous with Silicon Valley. Additionally, Costa Rica now has tech parks, like Global Park and American Free Zone, that host multiple corporations and software development companies in different fields.
Some of these tech parks are free trade zones, which means that companies can set up offices in these zones and benefit from tax exemptions.
The country is also on the brink of a technological revolution, with plans to encourage keen interest and growth in tech. One of these plans is the creation of Tech City, slated to be a tech business hub where small businesses will have the opportunity to interface with larger companies.
This initiative is expected to encourage entrepreneurship, the growth of start-ups, and the development of new technologies. With more tech freelancers being hired by international companies, Costa Rica has developed an immense tech infrastructure that meets the needs of the global tech market.
Most people in Costa Rica are fluent in English, which means they can easily communicate with international clients. On top of that, many have degrees or have undergone professional training for business development.
According to the English Proficiency Index, Costa Rica has a moderate fluency score and ranks #4 in Latin America for English proficiency.
Due to this high level of proficiency in English, several US companies outsource their work to Costa Rica. Here are some benefits of hiring remote workers who are proficient in English:
- Erases the Language Barrier: If there's a language barrier between you and your employees, it will be difficult to communicate with them and can ultimately hold up work. On the other hand, if you hire people from a largely English-speaking country like Costa Rica, then there won't be a language barrier, which means that you can get more done in less time.
- Lowers Costs: Since you'll have fewer communication barriers, there will be less room for error, and you can avoid additional costs.
- Improves Quality of Work: Communication is an integral part of the quality of work. If you can't properly convey your thoughts to employees, then it will be difficult for them to deliver satisfactory results. By hiring Costa Rican developers who are fluent in English, you'll get better-quality work, since there won't be any confusion about project requirements.
- Saves Time: You won't have to spend a lot of time clarifying your instructions, so you can work more efficiently. You can focus on other parts of the project while employees from Costa Rica take care of their assigned tasks with ease.
Another benefit of outsourcing software development to Costa Rica is that the country's culture is quite similar to that of the US. Due to this, developers from Costa Rica can easily understand the processes and requirements of a US business.
Costa Rica has been an outsourcing hub for leading companies around the world for quite some time. It has recently attracted several small businesses as well, which are looking to outsource their work in order to focus on other parts of their business.
Cultural similarity is one of the major factors that enable software development outsourcing from Costa Rica.
In fact, localization has been a key consideration for many US companies as they look to develop their products or services in order to better connect with customers from different cultures.
In addition, some clients even prefer working with people who have gone through similar school systems and education programs. If you're looking for a team with similar education and cultural backgrounds, then you should consider hiring Costa Rican developers.
When the whole workforce shares a similar work culture, it can:
- Perform Better: People who have gone through similar education programs are likely to have received the same knowledge. It means that they will be able to comprehend specific tasks well and execute them successfully.
- Avoid Misunderstandings: As mentioned earlier, you won't have any trouble understanding your Costa Rican developers because of their cultural similarity with your work process. The team can work much better as a cohesive unit and can avoid misunderstandings.
- Increase Productivity: Since the entire team will be working with a similar background, they'll understand each other's work easily and cooperate well to achieve common goals. The overall productivity of the company will improve because of this.
Higher Cost Savings
Nearshore outsourcing software development to Costa Rica also helps US companies save their money. For starters, the location of the country enables you to save on time because it's closer to your headquarters.
You can easily communicate with your developers and give them tasks anytime throughout the day.
Without language barriers, you can ensure that requirements and instructions are clearly communicated between employees and clients without delay. It speeds up the whole process and cuts down on the expenses that tend to arise due to communication errors when working with remote employees.
You can also save on office space costs because you won't need to maintain a separate office for employees from Costa Rica.
All of the software development outsourcing done in Costa Rica takes place over the internet and phone or video conferencing, so there won't be any need for office space either.
Since the team will work in similar time zones, you can easily coordinate with them and discuss projects while ensuring that there are no delays due to different time zones.
The location further helps companies enjoy higher cost savings since they don't lose work time due to time zone differences.
The Cost of Hiring Costa Rican Software Developers
As already mentioned, Costa Rican software developers are less expensive to hire than US professionals. Here are the average salaries for software developers in Costa Rica.
Junior Salary Rate
According to Glassdoor, the average salary for a junior software developer in Costa Rica is CRC526k per month, which is equal to $819. Meanwhile, a junior-level software developer in the US earns $68k a year or $5,666 a month.
What companies have to pay a Costa Rican software developer is just a fraction of what they'd have to pay a US professional.
Mid-level Salary Rate
Senior Salary Rate
A Costa Rican software developer at a senior position can earn up to CRC2 million a month, or $3,114. On the flip side, a US senior-level software developer makes up to $140k a year, which comes down to $11,666 per month.
Keeping these salaries in mind, you can see that hiring a Costa Rican software developer is simply much cheaper. However, this doesn't mean that US professionals are better than their counterparts in Costa Rica.
Professionals in both countries offer the same quality of work, and you can expect the same from them in terms of productivity, performance, and speed. The only difference is that Costa Rican software developers charge a lot less for their services.
Average Monthly Salary Rates by Tech Stack
The monthly salary of Costa Rican software developers also depends on the type of software development they're doing. Keep in mind that the salaries don't include additional benefits given to employees.
For instance, a software developer who's working on front-end development can earn up to $2,000 or more per month, while those working on the back end may earn less.
Although outsourcing software development to Costa Rica is relatively cheaper due to higher cost-savings, the process of finding the right talent can increase your expenses significantly.
Revelo's top-notch talent-finding service matches companies with remote talent who become full-time hires for the organization. Since all these professionals are pre-vetted, you can save money that you'd otherwise have to spend on training or testing potential employees.
Average Hourly Rates to Outsource to Costa Rican Senior Developers
According to Salary Explorer, a senior software developer in Costa Rica earns up to 12,700 CRC, or $19.77, per hour. Sure enough, the salary depends on different factors, such as time zone, experience, and location.
Meanwhile, an experienced US senior-level software developer earns up to $63.35 per hour based on ZipRecruiter's data. The website reports the lowest hourly rate for US software developers to be $16.11, which is comparable to what companies have to pay senior software developers in Costa Rica.
Thus, it costs more to outsource software development projects to Costa Rican professionals compared to hiring locally. The average hourly rate also differs based on the experience level of the software developer.
For instance, a software developer with two to five years' experience can earn up to CRC1,540,000 a month, which is 34% higher than what someone with only two years' experience will get.
While it may seem like a lot of money due to the currency difference, the monthly salary amounts to only $2,397 when converted to the USD.
Meanwhile, software developers with up to 10 years of experience can expect to get up to CRC2,270,000 per month. That's 48% higher than what people with five years of experience earn and amounts to $3,534.
Disadvantages of Nearshore Software Development in Costa Rica
Costa Rica is a great country to hire outsourcing services, since it has the highest percentage of English speakers in Latin America. This makes communication easier and helps form a better relationship with international clients.
When companies hire Costa Rican developers, they can save costs while getting the same quality of work that US software developers produce.
Though Costa Rica has some great advantages, it is still considered a developing country with an unstable economy compared to the US or developed countries in Europe.
Here are some disadvantages that can complicate business processes for US companies that hire Costa Rican developers.
Difficulty Finding Talent for Niche Tech Skills
Niche tech skills refer to programming languages and software that are not very popular yet in the global market. An example of this is Golang, which is gaining popularity but is still far from being international-ready.
Other examples include NoSQL databases like MongoDB that are widely used in the US but not much in Costa Rica and other smaller countries.
Since Costa Rica is still on the road to tech development and needs years to catch up with the US, it can be hard for companies to find Costa Rican talent for niche skills.
For instance, if an organization is looking for a developer with knowledge of NoSQL databases, it can be hard to find talent in Costa Rica. The company may have to offer training to its developers before they're ready for skill-specific work.
Complicated Tax System and Labor Laws
Companies operating in the US are familiar with the federal labor laws and tax system. Compliance with these regulations is important for any business because legal problems can easily arise if work processes are not in accordance with the local legislation.
In Costa Rica, the labor law is under the jurisdiction of each industry and requires a company to pay different fees depending on size. In order to do business in Costa Rica, a company must have an accreditation from the Ministry of Commerce.
Companies need to understand how these laws work in order to hire local talent and stay compliant. Additionally, US companies must know how to differentiate between contractors and full-time Costa Rican employees to lower the risk of misclassification.
Employee misclassification refers to hiring an employee as a contractor to avoid paying insurance and other benefits. As it's illegal and can lead to heavy penalties, companies must be sure of the status of their employees at all times.
The complicated labor laws and tax system in Costa Rica can make it difficult for US companies to do business with local employees.
Another challenge that companies face when hiring in Costa Rica is the long process of establishing a business. Although it depends on each industry, there can be difficulties with getting permits and tax registrations to start doing business locally.
Revelo: We Handle Everything for Sourcing and Hiring Costa Rican Developers
As a company with a vision to expand its reach, your focus should be on the actual expansion rather than the overhead tasks, such as finding talent, vetting them, and making sense of Costa Rican labor laws.
Revelo is a talent marketplace serving as a bridge between pre-vetted remote software developers in Latin America and companies in the US.
The platform partners with hundreds of companies and helps them scale their software development teams seamlessly and quickly, so you can rest easy, knowing that your hiring needs are being met by the best.
While Revelo takes care of hiring, you can focus on other business processes, such as expanding your business in Latin America and developing new services and products under your brand.
Where to Find and Hire Costa Rican Software Engineers
Now that you know about the benefits of outsourcing software development to Costa Rica, here's how to find the right talent in the country.
Costa Rican Job Boards
One of the quickest ways to hire Costa Rican developers is to use local job boards. Here are some good options:
- Buscojobs.cr: Buscojobs.cr is a job board that has a large number of software development listings. The site is well designed and easy to navigate. You can search for listings by region if you have a preferred area to hire talent from.
- cr.talent.com: cr.talent is another site with a large number of software development positions. You can post jobs for niche skills on the job board too.
- Indeed Costa Rica: Indeed's Costa Rican site has several hundred development listings, but it's only useful if you are willing to make an account on the website. You can filter the jobs by job type, location, salary estimate, remote, date posted, and experience level.
When posting a job ad on these job boards, make sure you include the following:
- Relevant Keywords: So that candidates can find your job, the listing should include keywords that are relevant and descriptive of the developer position you are looking for. If you require a niche skill or specific educational background, make sure you mention it.
- Clear Job Title: If your title isn't clear, it creates a challenge for candidates browsing for job listings. Make sure the job title clearly states what type of professional you're looking for. Doing so will reduce the number of irrelevant requests you get.
- Clear Criteria: The job description should be detailed and include all necessary information. Make sure you mention the type of skills required, the number of years of experience required, where in Costa Rica you're hiring from, and what your requirements are (education level, etc.).
Remote Freelancing Sites
Hiring freelance workers is another method of nearshore outsourcing software development to Costa Rica. Companies can use freelancing sites, such as Upwork and Solid Gigs, to find and hire remote workers.
Most of these sites let you filter your search by experience level, language, and region. You can post a request on the job board or ask for a quote from freelancers.
A talent marketplace is an online community that connects companies with potential software development talent.
Since the tech talent on a marketplace is pre-vetted, you don't need to send your potential hires through a vetting process as you would with traditional hiring. Talent marketplaces vet these professionals carefully before listing them on their platforms.
Revelo has a list of vetted developers offering different software development services to clients. Clients looking for software development professionals should visit Revelo to find pre-vetted professionals from Costa Rica and the rest of Latin America.
Although many Latin American countries are hubs of tech talent, Costa Rica remains a top choice to hire talent from. In recent years, the Costa Rican government has been working to introduce programs to increase its tech potential.
Here are some takeaways as to why the country is a great source of software development talent:
- There is significant potential for further growth of Costa Rica's talent pool, such as the increase in the number of students graduating from computer science and engineering programs.
- Costa Rica tends to be a favored destination for IT companies looking for new employees due to the locals' strong grasp of English.
- Since the US and Costa Rica have similar time zones, nearshore outsourcing software development to Costa Rica is easy for US companies.
- The cost of hiring Costa Rican software developers is much lower than those from the US, where average salaries are much higher.
- Companies can use talent marketplaces, remote freelancing sites, and online job boards to hire software development professionals from Costa Rica. If you don't want to deal with the hassle of vetting potential employees, it's best to find talent on a tech talent marketplace, like Revelo.