Trends in offshore outsourcing – a new Brazilian horizon

If 2020 taught us anything, it’s resilience.

There’s no shortage of articles from 2020 on how we all learned to work remotely in the face of a pandemic, which will hopefully help transform the UK’s workforce into a more versatile and more productive nation. Freed from the constraints of the traditional office environment and emphasis on hours spent visibly at a desk so that the focus of value is on the output of those hours.

Huge transformations in infrastructure and technology have been rapidly rolled out, at significant cost, to allow businesses to in a pandemic. But the cost benefits of home-working personnel can already be seen and companies are unlikely to return to business as pre-COVID usual.

The productivity and success of the UK will come under the influence of another major change sneaking in at the end of 2020, under cover of the pandemic: our departure from the EU. Whatever your political persuasion or stance on the matter, what’s clear is that there will be changes in our relationship with European nations and their workforces. Freedom of employment will be reduced and working for UK business will be different for many European professionals.

Add to this the upcoming changes by HMRC to the way UK businesses must consider their flexible workforce under IR35: no longer will it be possible to benefit from long term, regular contracting relationships without the use of a formal umbrella relationship. Cost-efficiency of non-permanent resource will need to be reconsidered for many.

All of these elements combine to point in a clear direction: a remote, self-employed, reliable skilled workforce outside of Europe. Offshore Outsourcing has been growing in popularity over the last decade, particularly for skilled technology services the UK is lacking, which is still the case according to Mintel’s 2019 report:

Temporary recruitment represented 91.7% of the employment sector. The most notable sectors include computing & IT… which suffer from chronic shortages in suitably skilled candidates, struggle to retain staff or rely on skilled immigration to meet their needs.

With the new immigration landscape heralded by Brexit, the immediate appeal is growing for outsourcing to businesses with expertise in sourcing and managing offshore teams. Clearly, security, cultural compatibility, and effective relationships can be better assured when whose services are supplied and guaranteed by a UK business. This is particularly important for highly regulated sectors, such as Fintech, where cybersecurity is a major challenge and offshore outsourcing can be fraught with risk.

Offshore outsourcing in the software development world is predicted to grow. The sector is currently dominated by India and Eastern Europe, which have amassed swathes of competing enterprises with varying degrees of quality and transparency. Each has their own idiosyncrasies and pros and cons, the primary benefit being cost of labour. But the Financial Times heralded 2020 with a warning about the dislocation of IT outsourcing from its traditional centres.

A less-exhausted and more refined source of technology talent is emerging on the other side of the world, in Latin America. According to Forbes: “Brazil’s outsourcing industry was launched 30 years ago with the arrival of firms like IBM and EDS and has evolved from an industry focused on low costs in the 1990s to a focus on performance improvement and IT-BPO innovation today.”

Unlike other common offshore outsourcing regions, Brazil’s timezone significantly enhances productivity because of the large overlap in working day with the UK. Brazil developers come online at 12pm UK time, ready to deliver plans made in the morning; there’s plenty of time for interaction between UK and Brazil teams in the afternoon; and development work continues through the night, ready for review first thing in the morning UK time.

Availability of flexible, self-employed, remote-working IT contractors will be increasing worldwide in the wake of the pandemic. However, accessing a pool of economically-attractive talent in a completely different culture, thousands of miles away is not easily done. A robust culturally-aware selection process must be implemented to make sure the skills requirement is matched with reliability and commitment for end-to-end projects. And it’s not just about technical skills. Putting together a remote team, one that can seamlessly integrate with the high-performance Agile project procedures demanded by blue-chip business in the English-speaking world, is not for the inexperienced.

Fortunately, Techifide has been doing exactly this for almost a decade. Our established relationships with Universities and Learning Institutes across the region allow UK businesses to safely access the Latin American sweet spot in technology outsourcing and avoid the pitfalls of attempting a new outsourcing arrangement.

We predict that the trend for the twenties will be offshore outsourcing to Latin America for skilled IT professionals. If you’d like to be ahead of the crowd, our team would be happy to talk about a test project as part of your resourcing portfolio. Just tell us how and when you’d like us to get in touch: