There are four very important reasons that every US based technology company needs to have a LATAM tech talent strategy.
Let’s dive in.
WFH TRENDS
We can assume that all technology companies have the capacity to offer WFH to their workers because of the interconnected nature of the internet and technology. The Survey of Working Arrangements and Attitudes (SWAA) October update showed that for companies in the USA that can offer WFH (i.e it is possible to do the job remotely), 20% of employees are fully remote, with 47% working to a hybrid model and 33% using an in person working model.
Furthermore the SWAA also point out that “employer plans for WFH post-COVID are between 2.3 and 2.4 days per week (for persons able to work from home) and stabilizing”, showing that employers are actively planning for the WFH aspect, whether it be hybrid, or fully remote. (Source: Survey of Working Arrangements and Attitudes (SWAA) October update)
How is this data translating into the technology world?
The September 2022 data from the CompTIA Tech Jobs Report highlighted that demand for software developers is very strong, and represents 40% of all tech job postings. Of the 83,000 software engineering jobs posted in September 2022, 38%, or 31,949, were specifically offering remote or work from home opportunities.
The WFH trend is very strong and is a core reason why we see so many US businesses leveraging LATAM tech talent strategies.
COST
Every quarter Soli Vargas Recruiting publishes the latest LATAM tech talent market salary data for Latin American remote workers working for US based companies as a contractor. The up to date salary data comes from the Soli Vargas Recruiting team of recruiters who interview and place these contractors on a daily basis.
We then compare our proprietary data sets to the salaries of those for the same position for full time employees in the USA via Glassdoor data.
The Q4 2022 report found that US employers that are leveraging a LATAM tech talent strategy are saving between 25% and 58% in salary costs, depending on the position.
Position | Difference % |
Application Engineer | -25.00% |
Backend Engineer | -56.49% |
Senior Backend Developer | -50.59% |
Front End Engineer 5 years + | -37.10% |
Front End Engineer 3 years + | -32.94% |
Senior Dev Ops Engineer 5 years + | -50.31% |
Senior Dev Ops Engineer 3 years + | -51.54% |
Product Manager 5 years + | -58.51% |
Product Manager 3 years + | -57.48% |
Product Designer 5 years + | -53.19% |
Product Designer 3 years + | -43.75% |
Lead Software Development Engineer | -45.63% |
Python Software Engineer - Machine Learning | -31.91% |
Manager, Engineering | -54.72% |
Lead, Software Engineering | -45.81% |
Lead Full Stack Software Engineer - Ruby/JavaScript | -31.08% |
Software Engineer | -20.00% |
Software Development Engineer C++ | -39.06% |
As the data shows, these companies are getting a great deal. They are benefiting from an incremental supply of high quality workers and they are paying below the US employee market rate. They are getting ahead of wage inflation.
Whilst those companies who are seeing the benefits of a LATAM technology talent strategy they are not stopping employing full time employees in the US. Instead they are leveraging this talent to work alongside full time employees so that companies can realize the benefits of both types of labor.
The value of team members that are near the office to be actively involved in management, decision making and operations has massive value to companies. Just like leveraging LATAM tech talent as a proportion of headcount already helps many US businesses build a more efficient operation that drives more value for the same or less dollar cost.
It is something that anybody who is hiring technology talent in the USA should be thinking about strategically.
PROXIMITY & TIMEZONE
As well as having very good economic reasons, LATAM countries share four time zones with the US, with five other countries in South America that are one hour ahead of US Eastern time.
Depending on where you are there will be certain places that are more attractive because their timezone aligns with where you are, but the reality is that there will be options for your business wherever you are in the USA.
Time Zone | US places on the timezone | Countries that share the Timezone in LATAM |
US Pacific Time | California, Oregon, Washington, Idaho, Nevada, and Utah | Mexico - Baja California |
US Mountain Time | Colorado, Idaho, Montana, New Mexico, Utah, and Wyoming | Mexico - Baja California Sur, Chihuahua, Nayarit, Sonora, Sinaloa and Revillagigedo Islands |
US Central Time | Alabama, Arkansas, Louisiana, Minnesota, Missouri, Mississippi, Illinois, Iowa, Oklahoma, and Wisconsin.
Some parts of Indiana, Kansas, Kentucky, Michigan, Florida, Nebraska, North Dakota, South Dakota, Tennessee, and Texas also have the US Central Time zone | Mexico (most of the country), Belize, Costa Rica, El Salvador, Guatemala and Honduras |
US Eastern time | Connecticut, Delaware, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New York, North Carolina, New Jersey, Ohio, Pennsylvania, Rhode Island, South Carolina,Vermont, and Virginia.
Parts of Indiana, Florida, Kentucky, Michigan and Tennessee | Panama, Colombia, Cuba, Mexico (within Quintana Roo), Peru and Ecuador |
Other countries are 1 hour ahead of US Eastern time are in the South, namely:
- Argentina
- Bolivia
- Brazil
- Chile
- Uruguay
LANGUAGE SKILLS
According to Forbes the USA has 13% of the population speaks Spanish at home, so if your business has native Spanish speakers then they could be the perfect conduit to setting up operations in LATAM.
If you do not have this resource, do not worry, amongst the technical community in LATAM it is recognised that English skills are very important and people understand the value of investing in learning English.
In 2021 the English Proficiency Index did the world’s largest ranking of countries and regions by English skills analyzing the results of tests carried out on 2m adults in 112 countries & regions. The outstanding performer was Argentina being rated in the “high proficiency group”, with Bolivia, Paraguay, Cuba, Costa Rica, Dominican Republic, Chile, El Salvador, Honduras, Peru and Uruguay in the “moderately proficient” group. Interestingly countries also in this group were the likes of India, Spain and France.
The image from Statista below provides a summary of the rankings by each country in LATAM.
At Soli Vargas Recruiting we hire a full time English teacher to grade people we work on their English level. The reason we do this is because sometimes it’s not necessary to have a fluent speaker if the role doesn’t need it. We have placed candidates who are fluent or have very good English most of the time.
However there have been cases with B1 English language level skills being offered a role in the past because the client needed a very specific technical skill, and English wasn’t as important. The client was happy to work with the contractor because they were working on a technical project that did not require lots of communication across teams.
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