When it comes to post-pandemic growth, the small yet economically savvy nation of Panama has fared far better than its neighbors in the region. The country’s GDP grew by 9.8 percent between Q1 2021 and Q1 2022, amid a lifting of COVID restrictions and a reopening of the tourism sector. What’s more, Panama’s economy is forecasted to grow 5 percent by the end of 2022. These are encouraging figures, and so too is the most recent forecasts for hiring trends in Panama in 2023.
Business owners expect to see a robust labor market in 2023, with 38 percent of Panama-based respondents saying they plan to hire next year, according to a study released by the recruitment firm Manpower Group.
Panama’s economy has not only developed but evolved, and has moved steadily toward the banking and financial service sectors – which accounts for roughly 80 percent of the nation’s GDP. When it comes to hiring trends in Panama, it’s no surprise that the most in-demand jobs have been and will continue to be IT/tech related jobs.
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Hiring trends in Panama: High demand for tech sector jobs
A recent study indicated that in 2023, employers will be seeking highly skilled workers and experts to fill tech positions such as:
- Data scientists/engineers
- Scrum masters
- Business analyst (IT)
- Cloud computing systems architects
- Full stack developers
- AI and machine learning experts
- Cybersecurity software developers
- Designers and digital content creators
- Digital marketing / ‘growth hacking’ specialists
With demand outpacing supply in terms of Panama’s IT/tech worker labor pool, competition for the best human talent is heating up, and this trend will continue into 2023. Many firms are likely to turn to services offered by headhunters in Panama to seek out and hire such talent.
Hiring trends in Panama: Labor rules and regulations
Before making a move into the jurisdiction, it’s important for companies to understand the labor rights and responsibilities of both Panamanian employers and employees. What follows are a few things that foreign business owners should know about when it comes to Panama’s work culture:
- Work hours – The standard workday is eight hours, with the standard workweek up to 48 hours.
- Public holidays – There are 22 public holidays in Panama each year, but it’s not as bad as it sounds. In 2022, seven of those fell on a Saturday or Sunday.
- Minimum wage – Panama is a dollarized economy, and the minimum wage varies by industry, work location, and other factors. The minimum wage ranges from $275 USD to $971.28 USD per month.
- Vacation time – Workers in Panama are eligible for 30 days of vacation following 11 months of uninterrupted work, or one day for every 11 days of work. Women are entitled to 14 weeks’ maternity leave.
- Social security contributions – Employers in Panama must make social security contributions in an amount equal to 12.25 percent of an employee’s wage, and withhold 9.75 percent on the employee’s behalf and remit it to the authorities.
- Payroll tax – The employer must pay educational insurance tax at a rate of 1.5 percent of an employee’s remuneration. The employer also pays workers’ compensation insurance premiums at rates ranging from 0.56-to-5.67 percent of remuneration.
Steps to incorporating there
For years, the small Central American nation of 4.3 million people has been a popular destination for foreign companies and investors alike. But there’s a caveat: firms wishing to take advantage of hiring trends in Panama must first set up a physical presence in the country.
Here is a quick overview of the steps foreign companies must take to incorporate in Panama. For a more detailed explanation, read our previous article on the subject:
- Assign power of attorney
- Create company bylaws
- Register the company name
- Obtain a company Tax ID Number
- Acquire a commercial license
- Open a corporate bank account
When it comes to hiring trends in Panama, as well as company incorporation, the jurisdiction boasts one of the most straight-forward processes in the whole region. But like any move into a foreign market, the process can be confusing if you’re unfamiliar with the peculiarities of a foreign country. For this reason, it’s best to seek the legal, financial, and administrative expertise of a PEO like Biz Latin Hub.
Biz Latin Hub can help you with hiring trends in Panama
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.
Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross border operations.
As well as knowledge about hiring trends in Panama, our portfolio of services includes hiring & PEO, accounting & taxation, company formation, bank account opening, and corporate legal services.
Contact us today to find out more about how we can assist you in finding top talent, or otherwise do business in Latin America and the Caribbean.