El Salvador is not without its problems. It has persistently high levels of poverty, unemployment, gang violence (including a controversial government crackdown on gangs), and higher levels of people working in the informal economy. President Nayib Bukele’s grand vision of boosting the economy with Bitcoin collapsed after the “great cryptocurrency crash” in May 2022. So when we consider hiring trends in El Salvador, it must be grounded in this reality.
Fortunately, it’s not all doom and gloom in the tiny Central American country. In 2021, El Salvador’s economic growth rebounded 10.2 percent after a pandemic-induced decline, boosted by overseas remittances and exports. What’s more, El Salvador’s GDP grew 2.4 percent in 2022, and is expected to grow 1.8 percent in 2023 and 1.6% in 2024.
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So what are the prospects for hiring trends in El Salvador heading into the new year? There are encouraging signs in the realm of employment. El Salvador’s private sector added 64,492 jobs from January to August 2022, up by 11 percent during the same period in 2021, according to at least one news report. In 2022, the sectors that saw the highest job growth were in manufacturing, services, commerce, restaurants, hotels, and construction, the report added. In 2023, however, the sectors that showed significant growth were construction, technology, financial services, and tourism, which are expected to continue to be the most prominent sectors in 2024.
For companies, entrepreneurs, and investors looking for opportunities in an often-overlooked market, the conditions might be right for them to consider El Salvador. But just like any new and unfamiliar jurisdiction, a good rule of thumb is to find a reputable legal representative in El Salvador before making any major financial decisions.
Hiring trends in El Salvador: Largest sectors
What follows are the largest official industries in El Salvador and how much they contribute to the nation’s annual GDP (2022):
- Services: 59.6%
- Manufacturing: 25.2%
- Agriculture: 4.7%
You may have noticed that the above percentages only add up to 89.5 percent, and as strange as it sounds, those figures are probably too high. That’s because for all the El Salvador economic data out there, the more respectable, independent sources say that money sent from abroad (aka, foreign remittances) makes up 25 percent of El Salvador’s annual GDP.
Some 2 million Salvadoran immigrants live and work in the United States (accounting for 20 percent of El Salvador’s population) and wire their earnings to their families back home, making foreign money sent from abroad the second-largest “industry” in the country.
In El Salvador, the only real hiring trends to speak of are reserved for the tiny class of educated elite who haven’t fled the country. If there’s one glimmer of hope, it’s in a sub-section of the services sector known as business process outsourcing (BPO).
More than 70 foreign companies have outsourced the bulk of their operations to El Salvador, and is a growing industry that employs more than 30,000 people, according to the organization Invest El Salvador, whose website seeks to attract foreign business to the country.
The BPO industry and hiring trends in El Salvador
What types of BPO companies have relocated their operations to the small Central American nation?
- Call centers
- Customer service centers
- Back-office customer support
- PEO services companies
- Marketing/advertising providers
- HR/payroll service providers
- Translation companies
- Virtual assistants for SMEs
- Desktop app/website builders
- Employment recruiters
The Invest El Salvador website claims the country boasts a labor force of 3 million workers (does that include the 2 million-strong diaspora?) 55 percent of whom are under the age of 40. With the young, energetic labor force that’s renowned for its work ethic – coupled with a growing economy and relatively low rate of inflation – we can expect hiring trends in El Salvador to improve in 2024.
Hiring trends in El Salvador: Labor force a growing asset
What follows are some of the benefits of incorporating a business and hiring workers in El Salvador:
- A hard-working, industrious workforce
- A growing talent pool of young, enthusiastic workers
- World-class technical/skilled trade schools
- Government assistance for on-the-job training
- Good employer-employee relationships
If you’re one of those types of business owners and/or investors who can look at El Salvador and see a diamond in the rough, then setting up shop in the jurisdiction might be right for you – in 2024 and beyond.
Biz Latin Hub can help you with hiring trends in El Salvador
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in San Salvador, 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 El Salvador, our portfolio of services includes hiring & PEO accounting & taxation, company formation, and corporate legal services.
Contact us today to find out more about how we can assist you in finding talent, or otherwise do business in Latin America and the Caribbean.