The hiring landscape in tech is in flux. In light of recent tech layoffs, what has changed in hiring software developers and engineers in nearshore locations like Guadalajara, Mexico?
The wave of tech layoffs has spared no one. Although the highly publicized and controversial Twitter layoffs and reshuffling made headlines in the U.S., the social media company was only one of many in the tech industry that reduced its workforce in 2022.
The Twitter workforce stationed in Mexico was almost entirely wiped out, but tech layoffs have been happening in the U.S. and across Latin America since the beginning of 2022.
According to the running layoff tracker, almost 100,000 startup employees lost their job from March to June of 2022. Yet, the situation has opened up opportunities for smaller and traditional organizations that need talent. Instead of looking at Silicon Valley in California, many companies have turned to tech hubs like Guadalajara, Mexico.
Deemed the Silicon Valley of Mexico, Guadalajara has risen as a top nearshoring destination for companies that seek low-risk outsourcing of top level talent with cost-effective options and quality candidates.
Here’s why Guadalajara has made a name for itself in recent years.
A Vibrant City that Positioned Itself as a Leader in Tech
In 2017, the government of the State of Jalisco put out an ad in POLITICO. The advertisement invited technology companies, innovators, and entrepreneurs to consider relocating to Mexico’s Silicon Valley. The open letter described the positive attributes of the state and the city of Guadalajara, boasting its tech industry worth $21 billion dollars and diverse regions, culture, religions, and ethnicities.
Initiatives like this separated cities like Guadalajara from other cities in Latin America. The state worked to position itself—through investment in infrastructure, education, and economic expansion— as the center of innovation in the country.
Several top companies have already set up shop in the city’s welcoming tech ecosystem. Since the 1960s, the likes of IBM and Dell have established centers in Guadalajara. The rise of tech in the city began decades earlier and took years to incubate. The cluster of tech companies that set up shop in the city slowly cultivated interest in technology and began hiring local talent and engineers.
Other companies that have established in Guadalajara include:
- IBM
- Amazon
- HP
- Oracle
- Intel
- Wizeline
- Toshiba
- And more
Guadalajara also has several highly-regarded public and private universities and technical institutes. Schools such as University of Guadalajara, Institute of Technology (ITESO), Autonomous University of Guadalajara, and more.
Guadalajara’s Resilience Amidst Market Changes
The recent changes in the tech industry is not the first time that the Mexican tech ecosystem has seen ebbs and flows. In 2001, a lot of the tech-related jobs moved to Asia and India. Many saw these regions as a convenient outsourcing destination because of its low cost.
Instead of buckling, however, the city of Guadalajara doubled down on its efforts to maintain investment in infrastructure and STEM education. Those efforts paid off, as it continued to foster a young generation of engineers that pursued careers in tech.
Hiring in Guadalajara: Understanding the City’s Talent
Every market is different. After working in Mexico’s tech ecosystem for more than seven years, we have helped companies build nearshore teams and hire remote developers throughout Mexico. The U.S.’ southern neighbor has several tech hubs, but as remote work sweeps the world, Guadalajara continues to be a favorite of many software developers and engineers.
When hiring remote developers in Guadalajara, here are some key insights to the local market.
Download our Tech Salaries Report 2022 to learn more about the IT industry in Guadalajara and other Mexican cities.
#1 Guadalajara is in Mexico’s Central Region With an Average Cost of Living
Guadalajara is located in the country’s central western region, and is the capital of the state of Jalisco, historically known for its mariachi music and tequila. The state thus has a vibrant cultural history, but it has long invested in technology and other STEM -related fields. As compared to the rest of Mexico, Jalisco has a slightly higher cost of living, but it is still far below Mexico City.
The average IT salary in Guadalajara is $3,419 compared to Mexico City’s $3,893. The cost of living varies wildly between Mexico and the U.S. but there are differences in the cost of living in different regions of Mexico itself. While Guadalajara is not the most expensive city in the country, it ranks as one of the highest, as it is the country’s 2nd most populated city with plenty of development and amenities.
#2 Mexico Has an Experience Gap That Should be Factored in When Hiring
When hiring remote software developers and engineers in Mexico, it’s useful to understand the experience gap. Many companies are looking for senior software developers. The seniority scale in Mexico works a little bit differently, as it often takes the technologies some time to work their way down to the LATAM countries. In Mexico, a senior developer is someone with 9-10 years of experience while in the U.S someone with 6+ years of experience might be considered a senior developer or worker.
Despite the many cultural similarities between U.S. and Mexican developers, the Mexico tech ecosystem is very much a different market and the talent has varying expectations when it comes to salaries.
#3 Guadalajara Has a High Level of Junior, Intermediate, and Senior Tech Talent
The pay scale in Guadalajara varies depending on experience. Salary expectations are directly proportional to the years of experience that an IT worker has in Mexico. According to our Tech Salaries Report in 2022, a Junior developer in Guadalajara averaged about $2,000 per month, an intermediate developer averaged $3,000, and a senior developer earned about $4,906.
What About Labor Laws and Regulations?
When hiring a software engineer outside of the U.S., many companies become concerned for how that plays out in terms of the local labor laws, regulations, and taxes.
Many companies choose to work with an Employer of Record. This is a legal entity that hires, manages payroll and HR, and pays the local taxes for a company’s remote employees. The advantage of using an EOR is that they take the legal liability and risk. They act as the legal employer on paper.
Hire Remote Developers from Mexico’s Top Tech Hub: Guadalajara, Jalisco
While Guadalajara, Jalisco is known as a top tech hub, it is not the only Mexican city that has made a name for itself in the country’s tech ecosystem. Other notable cities like Mexico City and Monterrey have also garnered a reputation for busy cities with high concentration of tech workers and activity.
As companies tighten their budgets, hiring remote talent in Mexico is a cost-effective option that presents high possibilities.
Whether you are looking to hire remote software developers or expand your offices to Guadalajara, leverage the power of leading tech talent to drive your company into the future.
Want to learn more about Guadalajara and its growing population of remote tech talent? Connect with us today.
