Summary
- Latin America is an excellent source for your team to find skilled technical talent due to the high level of qualified and well-educated professionals in the region and timezone and cultural similarities.
- As in the rest of the world, there is a gap between supply and demand for technical talent in the region; however, companies can attract top-tier talent with the proper compensation and benefits.
- As a result of the high demand for technical talent in Latin America, the compensation for these professionals is at an all-time high, with an average salary of USD 72,000 per year.
- It is necessary to localize the hiring process when recruiting in Latin America. Paying attention to the difference in the educational and technological ecosystem, engineering backgrounds, resumes, interview styles, and preparation.
- It is recommended to have a strategy that fosters an excellent remote or hybrid workplace culture where everyone in the team feels an integral part of the company regardless if they are in the headquarters or a completely different country.
The surge in demand for tech talent has affected the way companies approach their hiring strategies. It is no longer necessary to have an office near the mythical tech hubs and cities to attract top-tier talent. As we come to a post-pandemic society, the shift towards distributed teams is levelling the playing field between developed and emerging countries and giving way to a surge in demand for Latin American technical talent.
However, when hiring talent in LATAM, companies must understand the cultural differences and embrace diversity to attract and retain top-tier talent in a quick, cost-effective manner.
1. The Need
2. The Feasibility
3. Why LATAM?
4. Advantages and Challenges of Hiring in Latin America
4.1. Qualified Workforce
4.2. Time Difference
4.3. Communication
4.4. Language and Cultural Barriers
Tech talent must have good communication skills; anything less than upper-middle proficiency in the language would make it difficult for them to perform effectively and establish a good relationship with co-workers.
Latin American talent is quite proficient in English. A survey carried out on selected LATAM countries ranked the average English Proficiency Index in the region as 492 on a scale of 1 – 800, with countries like Argentina (566) and Chile (523) ranking higher than other popular offshoring markets like India (496).
4.5. Local Regulations and Labour Law
With most LATAM countries considered developing countries, the increase in remote jobs has positively impacted the region. Countries can now settle on a future where more citizens working remotely can access top-tier challenging work opportunities, obtain better income and standard of living. Hiring remote team members in LATAM is a win-win situation for everyone.
4.6. Gender Diversity
5. Finding Technical Talent in Latin America
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Full Stack Developers: Full-stack developers are heavily in demand across the tech industry, with about 13,000 open positions for this role in the US alone. LATAM region has plenty of competent web developers or engineers specialized in working with the front-end and back-end of a website or application.
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Front-end developers: LATAM countries host an increasing talent pool of well-versed front-end developers that create effective, user-friendly websites and web applications. They can combine design, technology, and programming to create a website's appearance and fix bugs.
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Back-end developers: A study by Stack Overflow showed that over 60% of LATAM software developers specialize as back-end developers. There's a ton of qualified talent capable of building and maintaining the technology that powers all the components serving as the foundation of your company.
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Data Scientists: Talent from Latin America also specialize in data science. They find trends in datasets and develop algorithms to obtain useful information in a company's raw data. Talent in this field possesses a deep knowledge of database design and multiple programming languages.
6. Filling the Gap Between Supply and Demand
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Be Part of A Great Company: From an engineer's perspective, a company is considered good if it offers a good salary, bonuses, benefits, or incentives. Benefits like PTO, national or US holidays, co-working stipend, and most importantly, stock options are becoming the norm when hiring talent in the region. The company should also create an excellent work environment and culture, regardless of their work style (hybrid or fully remote).
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Challenging and Innovative work: As more companies are starting to hire technical talent in LATAM, candidates look for more exciting and challenging opportunities that will allow them to learn new skills and grow professionally. Long gone are the days when boring or irrelevant work was sent to the remote team. Engineers and developers are looking to be part of the core team.
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Job Assurance: It takes a lot for engineers to join and establish themselves in a company. Also, the job description of engineers involves tasks that are complex and technical. This is the major reason why engineers put into consideration the level of job security in a company. Long-term employment provides a steady income to improve quality of life while also giving peace of mind, allowing for a more relaxed environment.
7. Current Salaries
8. Differences Between Hiring in LATAM And Hiring Locally
Localizing and accommodating your hiring strategy to the region's cultural differences is essential to attract and hire technical talent in Latin America. Here are some of the differences when hiring local versus remote talent in LATAM:
8.1. Local Knowledge About Companies and Universities
With limited familiarity with the region, it isn't easy to understand the tech landscape. As a foreign company, understanding which schools have the best engineering programs and which companies and start-ups use the latest technologies or the highest number of talented candidates can be difficult.
Higher Education in LATAM countries has grown in the past 40 years. Over 17 million students take different courses in over 3,000 higher education institutions. Based on the academic reputation score awarded by the QS World University Rankings in 2021, the Universidade de São Paulo (USP) ranked as the first in LATAM for engineering and technology studies. Pontificia Universidad Católica de Chile (UC), and Tecnológico de Monterrey (ITESM) in Mexico make up the top 3 spots.
Similarly, the influx of venture capital funding in the region has grown in the past years. According to research by CB Insights, some of the most well-funded tech start-ups in Latin America includes Colombia's Rappi (with $1.75B total equity funding), Brazil's Nubank (with $1.52B total equity fund), and Uruguay's dLocal (with $200M total equity funding) among others.
Understanding the LATAM educational and start-up ecosystem will allow you to pick suitable candidates for your company.
8.2. The Difference in Engineering Backgrounds
8.3. Interview Preparation
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Establish What Exactly You Are Looking For: As an executive at a start-up, you should have a deep understanding of the strengths and weaknesses of the organization. It helps to understand the areas that might be short-staffed or inefficient in your company and hire talent adequately to fill in those areas. It also helps to have a list of traits, skills, and qualities that future employees must possess to succeed at the company.
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Go Through Resumes Carefully: Before any interview happens, companies must be sure that the talent they are inviting to their recruiting process has a chance of being hired. That's why it is crucial to understand the difference between US and Latin American CVs or resumes. Apart from the obvious formatting and photo, LATAM resumes tend to be more modest. It won't necessarily feature highly recognized companies or directly tell you the personal achievements of the candidates. As a culture, LATAM tends to lean towards collectivism, as seen in the candidates' resumes or CVs. Taking all of the before into consideration is vital to ensure you don't waste time interviewing the wrong candidate.
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Prepare Questions: The best format for hiring candidates is by following a structured interview. Remember, interviewing styles vary between regions, so it is essential to create a process that will accommodate cultural differences. Typically US interview questions like "tell me about yourself" or "tell me about a project you are proud of" are not common for LATAM talent, and they might make them feel self-conscious or nervous.
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Build A Comfortable Atmosphere: Most people don't thrive under stress, and this shouldn't invalidate what a candidate can offer. Think of some ways to create a relaxed and open environment during the interview process. Also, remember that interviews are a two-way street. You need to sell the company to the candidate as much as they need you to select them for the job.
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Prepare an Offer: Finally, after the interview, run through each applicant's information and decide how to present your job offer strategically. Take into consideration the candidate's salary expectations, benefits, and other relevant information they might have talked about during the interviews.
9. Resume Differences
10. Nexton Can Make the Journey Easier for You
11. The Local Office Vs. Distributed Team
When exploring the possibility of extending activities abroad, a local office is one of the most streamlined business structures a company has at its disposal. There are many benefits of opening a local office in a different region.
11.1. Benefits Of Opening a Local Office
When exploring the possibility of extending activities abroad, a local office is one of the most streamlined business structures a company has at its disposal. There are many benefits of opening a local office in a different region.
Face to face Interaction
One of the apparent benefits of opening an office abroad is the possibility of face-to-face interaction between the team. It fosters company culture, camaraderie, and great dynamics between team members. However, technology allows us to be equally efficient when working remotely.
Brand Exposure to New Markets
When opening a local office, there is also the possibility of increasing brand exposure (both as a product/service and employer brand) through new markets. While this might seem great, it is essential to check the company objectives and see if international presence is down in the roadmap.
As exciting as the benefits of setting up a local office might be, it's also crucial to consider the possible challenges you could face.
11.2. Challenges Of Opening a Local Office
Fiscal Obligation
No matter where you are in the world, opening a business means bureaucracy, taxes, and a lot of paperwork. You have to consider the legal implications of just creating the company in a new country and the financial obligations associated with running operations and having full-time employees. Furthermore, in many Latin American countries, technical talent isn’t interested in working as an employee for a local company.
New Costs
In opening a local office, a company needs to adjust its budget to accommodate new costs. These expenses, from paying rent for the office space to the cups of coffee your workers will consume during office hours, quickly add up.
Talent Pool Limitations
When opening an office, companies usually pick the main cities to locate themselves. However, great talent is everywhere, and your company might be passing on the right engineers just because they don’t live close to the office.
Distributed teams are the solution to these challenges. Here, teams consist of a group of remote workers in different locations. Sometimes, distributed teams include collaboration with full-time employees in a local office and remote team members.
11.3. Benefits Of a Distributed Team
Compared with a local office's productivity, having a distributed team enables you to achieve the same level of productivity for less cost, sometimes a lot less. Also, having a distributed team keeps the cost down in regions where office space is premium. However, it's worth noting that cost reduction shouldn't be the sole reason for having a distributed team.
Often, a distributed team includes team members that spread across different time zones, allowing for better, faster, and more efficient coverage in an increasingly global environment. Rather than having shifts to provide efficient coverage, a distributed team spread across different time zones solves the problem naturally.
Having a distributed team makes it very easy to change the size or scale of the team. If the need arises, new employees could be seamlessly included.
11.4. Challenges of a Distributed Team
While distributed teams have their benefits, they're not without their challenges as well. Some of these challenges include the following:
More often than none, distributed teams include members from different nations, belonging to different cultures, and having different opinions. Other differences might also come in the form of language, communication practice, and skills.
Globally, employees in a distributed team are staged in different locations that span multiple time zones. The time zone mismatch makes scheduling a team meeting difficult as it might not be possible to get a quick response from team members. Inadequate communication between teammates makes simple tasks look much more challenging, hampering speedy and efficient workflow.
12. Contractor Vs. Employee: The Difference
How to pay your remote engineers might seem like a difficult task when deciding to look for talent outside of your company’s home country. However, the technical talent in Latin America has a deep understanding of the different payment options available to them, and many even have US bank accounts to help simplify the payment process. Here are some of the most common payment methods across the region:
- International Wire Transfer: This is the most traditional payment method; however, it is not as popular among remote workers as they usually incur high transaction fees and unfavourable exchange rates.
- Multi-Currency Wallets and Platforms: Some of the most frequently used are PayPal, Wise, and Payoneer. They provide the users with a US account to receive money wherever they are in the world.
- Cryptocurrency: A rising number of companies across different industries have begun to embrace cryptocurrency. These companies now allow customers to use them as an official payment method for goods and services while also paying employees via this method. Employing this method of payment has its benefits. Cryptocurrency transactions do not incur banking fees, and they have low transaction fees for international payments. Crypto transactions are also mobile and very secure.
13. Cultural & Workplace Best Practices for Remote Teams with LATAM Talent
In leading a remote team, certain workplace practices are needed to ensure team members are happy and comfortable working for you. As a head leading a project, here are some tips on managing a team with LATAM talent from anywhere in the world.
13.1. Foster And Embrace Diversity
In managing remote teams, cultural diversity should be a priority. It is necessary to learn and understand how each team member receives feedback to avoid miscommunication and conflict. Managers in charge of teams with LATAM talent should ensure they encourage an inclusive outlook, respect LATAM holidays when possible, and respect LATAM's cultural diversity.
13.2. Set Clear Expectations
Transparency is key here. Every project has an expectation; thus, being open about project expectations to your team helps keep them focused and work towards the same objectives. Some topics you should set clear expectations regarding working hours meetings, project deadlines, and communication systems.
13.3. Give Out Expected Benefits and Perks
When a project is completed, or a milestone is reached, it's good to reward talent with benefits and perks. These benefits could come in the form of paid time off, equity, performance bonuses, co-working stipend, etc. These rewards create a competitive package for the potential employee and motivate talent to do more when the need arises.
14. Remote or Hybrid Workplace Culture
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Emphasize on team-building activities: Regardless of how frequently it might occur, fly in as many remote team members as possible for an all-hands meeting in your physical office or plan a company-wide retreat or offsite. This is great for organization, communication, and productivity. A low-budget alternative to this could be setting up remote team activities. Activities like virtual meetups, multiplayer gaming, team quizzes, among others, could be remotely set up to integrate team members.
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Use Video Group Calls: Creating video group calls where everyone can chat, message, and carry out video conferencing helps communication. This essentially converts the challenges of a remote team into advantages.
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Engage In Fun Non-Work Activities: Work shouldn't always be too tense; fun activities should be introduced as ice-breakers. Some ideas for this could be playing video games together or scheduling time for weekly storytelling.
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Schedule Meeting Times: Unscheduled phone calls should be kept at their barest minimum for just emergencies. Video meetings and teleconferences should be set with each staff in attendance. New points can be addressed, and problems can be analyzed and solved. Scheduling helps prioritize tasks, which gives team members a clear purpose and keeps everyone on the same page.
