Both Mexico and Argentina have plenty of nearshore IT services to offer, but the two nations vary considerably in the focus of their delivery. Stemming from their unique societal history and fluctuating economic stability, each country’s characteristics have had discernible effects on their respective industries, leading to a complementarity in the regional talent pool.
Leonardo N’Haux is the Co-founder and CEO of Qualtop, an IT consulting firm with presence in Mexico, Argentina, and the United States. N’Haux also co-founded a number of IT and development firms in the region, namely SYE Software, High Tech Business Point, Cinovatec, and 3MB. Pulling from this well of experience, we probed N’Haux for some insight into the trend variations of IT talent in both nations.
Nearshore Americas: Having working closely with both Mexican and Argentinian development talent, what would you say are the biggest differences between the regional skills in the IT market?
Leonardo N’Haux: In our specific experience, the first big difference that we find is not related to the talent, but to the different markets that Mexico and Argentina address. Mexico is more of a service-oriented country, while Argentina is more centered on intellectual property. This means that Mexico has a stronger sector for outsourcing and selling services in BPO or software development, while Argentina is more focused on delivering end products. Much of Qualtop’s open-source projects, built with platforms like Java or Oracle, are also sent to Argentina. Any projects with property technology, like Microsoft, we handle in Mexico.
In terms of talent, some specific talent in Argentina is very well-developed, making it easier to find certain skills there. That is why Qualtop often splits some projects and sends them down to Argentina. For instance, one important aspect of any software development project is the architecture. We have very skilled architects in Mexico, but when it comes to really complex projects, in terms of scalability and the management of huge amounts of data, we found it difficult to find the right capabilities here in Mexico, but succeeded finding the right support from Argentinian architects.
The other high-skilled talent in Argentina is in multimedia, a niche that has had a good track record for many years. This encompasses imaging, video compression, and anything that needs streaming, among other focuses.
What is it that is pushing each country towards these capabilities as strengths? Are there particularities in the education systems that direct this trend?
The difference is not generated in university. What happened in Argentina is that big companies and government strategically decided to go for open-source platforms to avoid costs in licensing from Microsoft, for instance. Because of that, there was a huge need to develop software with open-source platforms like Java.
Around 20 years ago, Oracle did a terrific job in Argentina positioning its technology, so big companies in the public sector decided to switch to Oracle for their databases, and once again the market was a driver to develop the talent. Here in Mexico, when Tata Consultancy Services (TCS) arrived into Guadalajara, they hired me to recruit the first 300 engineers and they had some need for Oracle talent, but we couldn’t find any at that stage because the company wasn’t established in Mexico. This meant that TCS had a big problem trying to find Oracle talent and decided to develop it themselves in order to solve the problem. Later, Oracle moved into Guadalajara and it’s become a totally different story. The big difference for Argentina having that talent is because the market was forced to generate it.
In terms of talent shortage and talent availability, which of the two countries does Qualtop struggle in the most, and why do you think that is?
In Argentina, it was a very different situation 5-7 years ago when the country had this explosion of companies moving in, attracted by the low currency value and economic competitiveness. If you add to that the kind of talent that was established in Argentina, many companies moved in and established facilities and hired lots of software engineers. In just three years, the country lost its competitiveness in terms of cost. This was so severe that many companies went back on their decisions and decided to leave Argentina.
Right now, it is more difficult to find talent in Mexico than it is in Argentina. Don’t get me wrong, it’s still difficult to find in both countries, but there’s more availability in Argentina and Argentinian developers are eager to work for foreign companies. It may be that they perceive more stability working for a foreign company than a local company.
Interestingly, the only three unicorns in Latin America are from Argentina: Mercado Libre, Globant, and Despegar.com. These unicorns are related to how closed the market in Argentina was over the last 10 or 15 years. It was almost impossible to do business there looking out to the global market because of regulations that the government implemented at that time.
How does the cultural difference play a part in the talent variations of both countries?
The cultural difference that stands out the most, is that Argentinians descended from immigrants, so they have no problem at all to relocate somewhere else for a better job opportunity. For Mexicans, it is more difficult to have this availability because of the culture of family importance. The other one, which can also be attached to education, is that it’s easier to find bilingual people in Argentina, in terms of percentage.
There have been some attempts to build bridges between Mexico and other countries on a governmental level, with the idea that we can collaborate to better fulfill the needs and the demands of the United States, specifically. With this plan, it has been suggested that Mexico could be the face of the region when connecting with the U.S., but then it should look back at other countries to compliment the development teams. This may be complex, but it’s something that we have to explore deeper because the demand is growing so fast.
Incidentally, a new study from IJALTI has shown that we will need an extra 6,000 engineers next year in Guadalajara, as companies will grow by around 50%. This is a huge problem and I don’t know how we’ll tackle it. In Argentina, it’s not that bad. If you commit to a project and cannot fulfill the demand, then credibility is lost, so combining the talent from the whole region will benefit everyone.
What about the regulatory differences? Are there bigger hurdles to jump in one country than in the other?
In terms of hiring, there is more flexibility in Mexico, but the regulations in Argentina have become more restrictive. The software industry is very dynamic; you may need ten engineers today on one platform, but six months later you don’t need them. If you don’t have other projects to migrate them to then you have to let them go. This is a huge cost when it comes to labor regulations. Argentina has become much more regulated in terms of labor, making it more difficult to expand, playing against the growth of the industry. In Mexico, it’s more flexible, despite new restrictions in firing people.