Most companies evaluate nearshore staffing partners based on pricing, time zone overlap, and technical skill. These factors matter. However, they don't determine whether a team will still be productive a year from now.
Retention does.
Retention rates reveal how a nearshore staffing company operates. High retention signals careful recruiting, strong team infrastructure, realistic expectation-setting, and long-term alignment between developers and client teams. Low retention, even when pricing is attractive, often points to deeper operational issues that compound over time. This framework explains how we evaluate retention quality at Howdy and what US tech companies should look for when choosing nearshore partners in Latin America.
At Howdy, retention is the primary signal we use to evaluate nearshore staffing quality. We maintain a 98% developer retention rate, compared to the 65-80% industry average. That difference represents over $500,000 in avoided costs for a 50-person team when you account for recruiting, onboarding, and project delays. Retention reflects decisions made long before a developer joins a team and continues through how that team is supported after hiring.
Table of contents
- What retention reveals about a nearshore partner
- Retention indicator #1: Recruiting methodology
- Retention indicator #2: Team infrastructure and support
- Retention indicator #3: Geographic strategy
- Retention indicator #4: Transparency and retention data
- Retention indicator #5: Communication and cultural preparation
- A retention-based evaluation checklist
- Frequently asked questions
- Why retention is a structural signal
- Ready to build a high-retention nearshore team with Howdy?
What retention reveals about a nearshore partner
When developers leave after a few months, the costs extend far beyond recruiting replacements. Teams lose context, velocity slows, onboarding resets, and architectural decisions are revisited. These disruptions rarely appear in pricing models but show up clearly in retention data.
Across the nearshore staffing industry, annual retention typically falls between 65% and 80%. A small number of providers consistently exceed 90%. That difference is not marginal. It reflects a fundamentally different operating model.
High-retention partners design for longevity. Low-retention partners optimize for placement volume.
Retention indicator #1: Recruiting methodology
Recruiting is the earliest and most important driver of retention.
Many staffing firms treat recruiting as a sales function. Success is measured by speed, pipeline size, and offer acceptance rates. These metrics work when the goal is filling roles quickly. They break down when the goal is building teams that last.
Retention improves when recruiting evaluates more than technical skill. Strong recruiting processes assess motivation, communication style, expectations around autonomy, and long-term alignment with the role.
At Howdy, recruiting is treated as a behavioral discipline rather than a throughput function. We use a team of 31 psychologists instead of traditional recruiters. They screen candidates for motivation alignment, communication preferences, and autonomy tolerance before technical assessment begins. Candidates are evaluated for motivation and working style alongside technical capability. This approach reduces early mismatches that lead to predictable attrition later.
Retention indicator #2: Team infrastructure and support
Remote work offers flexibility, but flexibility without support often leads to isolation and disengagement.
High-retention nearshore partners invest in infrastructure that supports distributed work beyond digital tools. This includes optional physical spaces, local support staff, and opportunities for in-person connection.
Research and internal surveys consistently show that developers with access to optional physical community report higher engagement and longer tenure than those working in fully isolated environments.
Retention indicator #3: Geographic strategy
Not all nearshore markets perform equally.
Retention varies by city, local labor market dynamics, and access to experienced technical talent. Effective nearshore partners recruit intentionally from specific markets rather than treating regions as interchangeable.
Latin America offers strong alignment with US teams due to time zone overlap, cultural proximity, and English proficiency in technical roles. City-level strategy matters. Bogotá, Buenos Aires, Mexico City, and São Paulo each have distinct ecosystems and retention characteristics.
Nearshore models with close operational proximity to client teams consistently outperform offshore models on retention when recruiting quality and infrastructure investment are comparable.
Retention indicator #4: Transparency and retention data
Retention data should be easy to access.
Low-retention providers often avoid specifics. They cite averages without context, claim confidentiality, or focus discussions on short-term placement success rather than long-term outcomes.
Howdy maintains a 98% developer retention rate across roles. This is not a marketing claim. It is the measurable result of recruiting quality, infrastructure investment, and long-term alignment between developers and client teams.
Retention indicator #5: Communication and cultural preparation
Technical skill alone does not guarantee success in distributed teams.
Developers need preparation for how US teams communicate, make decisions, and collaborate asynchronously. These expectations are learned, not assumed.
High-retention nearshore partners invest in onboarding and ongoing support that prepares developers for US team dynamics. When communication expectations are unclear, friction builds and attrition follows.
A retention-based evaluation checklist
When evaluating nearshore staffing companies, start with these questions:
What is your 12-month retention rate by role?
How do you evaluate motivation and working style during recruiting?
What infrastructure supports developers beyond digital tools?
Which cities do you recruit from, and why those markets?
Clear answers indicate operational confidence. Vague answers signal risk.
Frequently asked questions
What is a good retention rate for nearshore staffing companies?
Industry average retention for nearshore staffing ranges from 65% to 80%. Retention above 85% indicates above-average recruiting quality and infrastructure investment. Retention above 95% reflects exceptional operational practices. At Howdy, we maintain 98% retention across roles.
How does Howdy achieve 98% developer retention?
Our retention results from three structural decisions: we use 31 psychologists instead of traditional recruiters to screen for motivation and working style, we operate optional offices in 10+ Latin American cities to support community and connection, and we prepare developers explicitly for US team communication norms before placement.
Why does retention matter more than pricing when evaluating nearshore partners?
When a developer leaves after six months, the replacement costs include recruiting fees, onboarding time, knowledge transfer, and project delays. For a 50-person team, the difference between 68% retention and 98% retention represents over $500,000 in avoided costs annually.
What questions should I ask when evaluating nearshore staffing companies?
How long does it take for retention issues to become visible?
Early retention issues often surface within 3 to 6 months when initial enthusiasm fades and misaligned expectations become clear. However, the decisions that cause retention problems are made during recruiting, long before placement. High-retention partners design for longevity from the first screening call.
What's the difference between nearshore and offshore retention?
Nearshore retention typically exceeds offshore retention by 15% to 20% when recruiting quality and infrastructure are comparable. Time zone overlap, easier travel for in-person connection, and cultural proximity reduce friction that compounds over time in offshore arrangements.
Why retention is a structural signal
Retention is not a single practice. It is the outcome of interconnected decisions about recruiting, infrastructure, geography, and communication.
Pricing shows what a company charges. Portfolio work shows what they have built. Retention shows what they prioritize.
At Howdy, we've designed our entire operation around this principle. Our 98% retention rate across Latin American engineering teams reflects investments in psychologist-led recruiting, optional physical infrastructure in 10+ cities, and transparent data sharing.
When evaluating us or any nearshore partner, use retention as your primary signal. The numbers reveal everything else you need to know.
For US tech companies evaluating nearshore staffing partners, retention data offers the clearest view into whether a team is designed to last.
Ready to build a high-retention nearshore team with Howdy?
Howdy connects US tech companies with Latin American engineering talent through psychologist-led recruiting, optional infrastructure across 10+ cities, and transparent retention data.
Our 98% developer retention rate reflects a fundamentally different approach to nearshore staffing. We design for longevity, not placement volume.
Talk to our team about your hiring needs in a free demo.