Latin America may not always be a first choice for foreign investors considering their expansion options. Within the region as a whole, are countless differing regulations, customs, and bureaucratic systems to navigate.
Hiring in Latin America is one area in particular where regulation can be particularly complex. Labor law tends to reflect the history, core values and culture of each individual nation and so varies a great deal. It was the early 2000s which saw most Latin American countries put in place some very employee-friendly labor laws. If not compliant, most Latin American nations impart strict penalties and harsh fines on business.
However, the region is stepping into the global economic spotlight as one of the fastest-growing in the world – now, even more so than Asia. As Latin American economies stabilize and demonstrate consistent positive growth, foreign business is drawn to exciting opportunities in this developing continent.
Making the leap into a new and largely unknown market can be risky. Thankfully, Professional Employment Organizations mitigate that risk by enabling businesses to employ key senior sales experts to explore and learn about a new market, before setting up a subsidiary or branch.
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Benefits of hiring senior staff in Latin America through a PEO
Although a complicated initial process, once complete, there are comprehensive benefits to employing senior sales personnel in Latin America. As major players in the region develop open business environments, the relatively low market saturation in various new and emerging industries creates significant potential for foreign commercial activity.
Before a full expansion, business owners should consider the cost efficiency of first hiring 1-2 sales experts in their desired market to undertake market research and scoping work, and build contacts and prospective client relationships. Senior staff working abroad can gauge the likely success of a branch before it needs to make a large investment in the market. This is where PEOs can help.
Another obvious benefit for expansion into Latin America over other locations is the cost – the cost of living in Latin America is considerably cheaper than in Europe and North America. Cost of labor is also highly competitive – companies can make great savings on their Latin American employees.
Hiring in Latin America – High levels of professional skill
In the last 30 years, all Latin American nations have invested heavily in youth education programs. Generation upon generation, literacy rates have improved quicker than any other region globally.
Today, literacy rates of those between 15-25 years old, are above 98.5%, and even higher in urban areas. In the last decade, Latin America has fully embraced technology – one of the fastest developing industries in the region. More and more people around the continent are tech-literate which is promoting a more efficient, cooperative, and interconnected business network. Latin American people have never been more investible.
Employing/Sponsoring foreign employees in Latin America
Multinational businesses are likely interested to hire employees from their home nation, particularly for cultural comfort. Most countries in Latin America allow the employment and sponsorship of foreign employees in their country but it can be difficult. Businesses would need to understand local tax laws, payroll withholdings alongside visas and customs.
As multinationals expand to new regions, a small team (or even a single individual) working locally can probe the industry to work out the suitability of a continent, country, or city for your business products or services. A trusted PEO can work through local employment requirements to bring your senior sales executive onboard.
Professional Employment Organizations (PEOs)
Entering a new market has its own set of headaches. When entering Latin America, many of those headaches can stem from hiring staff due to complex local employment requirements. By outsourcing these issues to experienced, professional recruiters in a PEO, businesses can rest assured that they are compliant on every caveat of employment law in each Latin American country they hire in.
PEOs are particularly popular amongst multinational companies, where hiring foreign senior management is necessary, widespread, and regular. Partnering with a PEO through a ‘co-employment model’ allows someone else to shoulder the burden of arranging correct visas, managing tax filings and employee benefits for locally employed staff.
However, not only do PEOs help businesses with their services, but they also act as an attraction for prospective employees in Latin America. Having a PEO onside during an expansion process assures candidates that their worker rights are protected by a safety net of fully compliant employment procedures. By extension, companies working with a PEO can compete more successfully for sought after prospective employees, especially those in senior positions. With a PEO onboard, candidates are encouraged by the reliable practice and local nous that a PEO provides. Working with a PEO can help you attract experienced, qualified senior staff in Latin America for your scope of work.
Contact us to get started with hiring in Latin America
Hiring staff in Latin America is difficult even for established businesses, for those just getting started, it can be their downfall. Without guidance, the thick-knit web of employment law is often enough to deter foreign businesses from setting up in Latin America. Employee benefit programs, profit-sharing schemes, mandatory annual pay increases, Christmas bonuses, and the 13-month salary are just a handful of complex and strict areas of labor law across the region.
At Biz Latin Hub, we act as the Employer of Record for your staff located in overseas markets. While they’re laying the groundwork for your expansion, we’re taking care of their needs and requirements under local employment law. We operate across 15 countries, and are confident in our ability to find you the best-suited senior staff to ensure success in your commercial objectives.
To avoid the headache, attract the best, and give the right support to your foreign employees, get in touch here at Biz Latin Hub for customized expert employment services in Latin America.