Why Hundreds of Leading US Companies Are Hiring LatAm Talent

A mid-sized tech company in Silicon Valley received additional investment and is preparing for rapid growth. It urgently needs to scale up its software development team.

Despite offering competitive salaries and a dynamic workplace, its HR department struggles to find the right talent. Candidates are either underqualified or snatched up by larger competitors.

Frustrated and desperate to maintain momentum, the company’s leadership team begins exploring a once unconventional solution: recruiting talent from Latin America (LatAm). Within weeks, they onboard a talented team of developers, solving their hiring crisis.

This scenario is far from unique. Hundreds of leading US companies are turning to LatAm to address their workforce needs, driving a paradigm shift in how businesses approach recruitment.

Why Are US Companies Looking Abroad for Talent?

The shifting hiring landscape doesn’t have a single cause. It’s due to a confluence of factors that feed into and amplify each other.

Hiring in the US is expensive

Salaries in the US continue to rise, adding significant financial pressures on companies trying to attract top talent. According to the US Bureau of Labor Statistics, salaries increased by 4.4% for the 12-month period ending in March 2024, following a 5.0% increase for the previous 12-month period.

Salaries remain well ahead of inflation, though there is quite a bit of variance across industries. 

For many businesses, particularly small and medium-sized enterprises (SMEs), these escalating salary demands are unsustainable. The financial burden of high wages can sap resources that might otherwise be directed toward growth and innovation. 

As a result, companies are increasingly motivated to look for cost-effective alternatives.

Skill shortages

A staggering 75% of US employers now report struggling to find skilled talent. By 2030, this shortage could result in nearly $2 trillion in unrealized revenue. This skills gap is exacerbated by a demographic shift. Too many skilled workers are retiring, and too few younger workers are entering the workforce to replace them. 

The consequences are dire. Without the necessary skilled workforce, project deadlines slip, productivity drops, and companies find themselves unable to capitalize on emerging opportunities.

High competition

The aftermath of “The Great Reshuffle,” where workers sought better-paying jobs with larger companies, has led to intense competition for top talent. SMEs, in particular, are feeling the squeeze, with high turnover costing these businesses as much as $3 billion each year. 

The constant churn of employees is costly, disrupts team cohesion, and erodes company culture. For SMEs, which may not have the same level of resources as larger corporations, this high turnover rate can be especially destabilizing. 

Job-hopping

The trend of job-hopping is prevalent among Gen Z and younger millennials, with 74% of workers aged 18 to 26 either actively searching for or planning to search for a new job within the next six months. This has become the top concern for 77% of hiring managers.

While job-hopping can benefit the worker in the early parts of their career, it means increased recruitment and training costs, disrupted projects, and unpredictable morale. The lack of long-term employees can also mean the loss of institutional knowledge and a decrease in overall productivity. 

Why LatAm?

Now that we’ve established the pressing challenges in the US job market, let’s explore why LatAm has emerged as the go-to destination. 

Lower salary costs

Salary expectations for skilled professionals in countries like Brazil, Mexico, and Argentina are significantly lower than for those in the US. For instance, a full-stack developer in the US can command an average salary of $161,500 per year. A comparable candidate in LatAm can be hired for $78,000.

Here’s a look at some other common roles and their salary discrepancies compared with US hires.

The savings from lower salaries can be reinvested into critical areas like:

• Research and development (R&D): Boost innovation by funding new projects and technologies.
• Marketing and sales: Enhance market reach and drive revenue growth.
• Employee benefits: Improve employee satisfaction and retention with better perks and development programs.

For instance, the oil and gas startup Digital Wildcatters simply couldn’t afford to hire an Outbound Sales Specialist locally, as the salary demands were way too high for their current structure.

By looking at the LatAm market, they found and hired a perfect candidate in just 26 days, saving $42,000 annually. He was so effective at booking sales meetings that the company actually had to tell him to slow down. Now, they routinely fly him in for key meetings and conferences.

Bigger talent pool of skilled candidates

The LatAm region has made significant investments in education, particularly in STEM. Mexico has actually passed the US in terms of the percentage of total graduates in STEM fields, with 26% of its graduates obtaining a STEM degree. Brazil isn’t far behind with 17%.

Many LatAm professionals possess degrees from reputable institutions and have robust experience in their respective industries. English proficiency is also on the rise, especially among younger professionals looking for remote opportunities and in tech hubs like São Paulo, Buenos Aires, and Mexico City. 

With access to a larger talent pool, US companies can fill positions faster and with individuals who bring diverse perspectives and innovative solutions. 

Tribu, a San Antonio-based creative agency, couldn’t find someone with the right mix of graphic design and web development skills in their local candidate pool. They expanded their search to LatAm and hired the ideal candidate 24 days later. 

It was a perfect fit. They not only got the mix of skills they were looking for but saved $37,000 annually in overhead. 

Highly motivated workers

Cultural attributes such as a strong work ethic, adaptability, and collaboration are prevalent among LatAm professionals. Incorporating LatAm talent enhances diversity and fosters a more inclusive work environment. 

Diverse teams have routinely shown to be better innovators, delivering resilient solutions to unexpected problems. 

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Aligned time zones

Compared with hiring from Asia, hiring from LatAm offers the advantage of overlapping (or identical) time zones. This alignment facilitates real-time communication and collaboration, which are essential for agile workflows and timely project execution.

Kordis, a fractional CFO services provider, initially tried to outsource accountants and executive assistants from the Philippines when they realized they needed to save on salaries.

But a 12-hour time difference was too difficult to overcome. They faced unresponsive employees and invested valuable resources into trying to build communication solutions. 

When they brought their search closer to home, they found a LatAm staff accountant with a Commerce degree from the University of Toronto, an Executive MBA in Financial Management, and five years of experience working remotely for US companies. 

Additionally, they found an executive assistant who had two degrees (in Business Administration and Psychology) and over 10 years of experience in similar roles. They saved over $100,000 annually in salaries and no longer have to deal with the time zone difference.

Smart US companies are already doing it

Massive US companies have set up major operations in LatAm, recognizing the region’s potential. For example, Uber has established a significant presence in Brazil, not only servicing local markets but also leveraging Brazilian talent to support global operations.

They even use the region to grow their employer brand, highlighting former employees who started in LatAm markets and have since moved to bigger and better things around the world. 

IBM and Cisco have expanded their presence in places like Argentina, tapping into the country’s skilled workforce for technological and business processes. 

By following the lead of these industry giants, other US companies can benefit from integrating LatAm talent. This creates a proven pathway for success, reducing the risk and uncertainty often associated with expanding into new regions.

Final Thoughts

The challenges of the US job market are undeniable—rising salaries, skill shortages, high competition, and rampant job-hopping are creating significant hurdles. These issues hinder growth, strain resources, and disrupt business continuity.

However, these obstacles also present an opportunity for innovative solutions. Hiring talent from LatAm offers a compelling answer to these pressing problems. 

If you’re convinced that hiring from LatAm could be the right move for your business, the next step is simple. We invite you to download our guide to hiring top remote talent in under 21 days. It walks you through sourcing, evaluating, and onboarding top talent from LatAm quickly and efficiently.

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