The search for IT talent has transcended geographical boundaries, giving rise to a phenomenon that has led North American employers to embark on a quest for talent that goes beyond the regions’ borders. The drives behind the cause? Digitalization, globalization, and workforce dynamics. But, more than exploring the reasons, let’s scrutinize on what makes the IT talent pool in LatAm so alluring to North American employers and dissect the implications for both Latin American talents and employers.
The most frequently enlisted reasons why ‘nearshore’ hiring is being enabled towards Latin American countries are: geographic proximity, time zone compatibility, larger talent pool (and not necessarily less skilled), English language proficiency, and a minus 50% in the hiring costs in comparison to the U.S. (CloudDevs). In comparison to the not-as-compatible Asian market, this is a jackpot. But the North American region encompasses a vast number of employers… and Latin Americans are not staying behind.
As venture and technology investors put in 19,5 billion USD in Latin American start-ups back in 2021, the IT market grew exponentially together with the job opportunities…adding more pressure on the North American recruitment competition. With a decline as sharp as the rise, the glory of these start-ups seems to be short-lived, as the level of investment deflated to a 52% decrease in the first quarter of 2023 in comparison to last year (Contxto). Nevertheless, these companies are still fighting to stay afloat, and they need the best talent to achieve that.
North American employers are enhancing their benefit packages by including in their offers remote work, flexibility, paid time off, respecting local holidays, clear growth trajectory, equity/shares, relocation opportunities and equipment stipends (CloudDevs). That’s unarguably attractive, but to win this battle, employers must connect with the talent. Local companies have an advantage if they leverage their shared bonds with the talent to foster a strong sense of alignment with the organization.
A Gallup report revealed in 2022 that 42% of the workforce in Latin America and the Caribbean, and every 1 in 2 US employees, were watching for or actively seeking new jobs. This is probably one of the main reasons why employee retention became a top priority amongst HR leaders in 2023 (Gallagher). Another potential reason could be the cost per hire, which is estimated to be up to 40% of an employee’s base salary – benefits included – for replacement (Zippia). In a fiercely competitive landscape where North American companies seek IT talent in Latin America and regional start-ups surge, the ultimate differentiator lies (again) in how well employers craft, manage, and communicate an EVP that connects emotionally and rationally with the right talent.
Stepping into the talent’s perspective, the point of view is rather optimistic: abundant job opportunities, enticing offers, and employers dedicated to meeting their evolving personal and professional needs. Amidst this abundance, the greatest challenge is in the aforementioned differentiation. This is evidenced in the prevalence of EVPs highlighting hybrid, remote, and flexible work arrangements, as well as DEI initiatives, which have now become standard expectations for employees rather than unique selling points (Universum).
As businesses venture across borders in search of talent, the ability to define, communicate, and optimize their unique value proposition becomes top priority for employers on both ends. The dynamic landscape of IT hiring knows no bounds; and its future, in an interconnected world, raises questions about the ever-expanding talent pool, driven by digitalization and remote work preferences. Will this be something that employers from other industries will embark on too?
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