For companies, entrepreneurs, and investors looking for opportunities in an often-overlooked market, the conditions might be right for them to consider company formation in El Salvador. The country is on an upwards trajectory, having significantly reduced longstanding problems with crime and famously embracing bitcoin. Understanding the hiring trends in El Salvador allows you to understand why it’s a hot destination for both BPO and tech right now.
Key takeaways on hiring trends in El Salvador
| What are the key sectors in El Salvador? | In El Salvador, the traditionally powerful sectors are manufacturing, textiles and agriculture. However, new opportunities are arising, such as business process outsourcing (BPO). |
| Steps to hiring in El Salvador | A local advisor can help you with: Job adverts Networking CV assessment Interviewing Contract writing Onboarding |
| Is PEO legal in El Salvador? | Yes, it is legal to work with PEO providers to outsource HR and payroll functions in El Salvador. |
| What is the minimum wage in El Salvador? | El Salvador has a number of monthly minimum wages depending on sector, starting from USD$243.46. For most foreign companies it will be USD$365. |
| What are the employer contributions in El Salvador? | 15.25% must be paid of an employee’s gross salary. |
Hiring trends in El Salvador: A sector to watch
In El Salvador, the traditionally powerful sectors are manufacturing, textiles and agriculture. However, new opportunities are arising, and the most exciting of these are 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 BPO operations to El Salvador, and it 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, 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 the coming years.
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 2025 and beyond.
How much it costs to hire people in El Salvador
The cost of hiring in El Salvador is less than it would be in richer nations, yet workers are often well qualified and skilled. With significant investment in education over a number of years, the El Salvador now has a surfeit of graduates in the labor market that it cannot provide local jobs for. This means that the labor market in El Salvador is relatively competitive for an incoming prospective employer.
El Salvador has a number of monthly minimum wages depending on sector, starting from USD$243.46. For most foreign companies it will be USD$365. However, this is not necessarily the rate that you should be offering. In top sectors that require qualified and skilled workers, you will need to offer at least market standard rate. A local hiring expert in El Salvador will be invaluable in making sure that you are not overpaying or offering unattractive rates that make it hard to recruit quality talent.
Employers in El Salvador must make social security contributions equal to 15.25% of an employee’s wage. The employer must withhold tax at a rate of 10.25% of an employee’s remuneration. You must also pay an annual aguinaldo bonus of 15-21 days’ base pay based on length of service.
Two options for hiring: establish a company or PEO
When entering the market and hiring in El Salvador, there are essentially two options available to investors and entrepreneurs. The most common way of doing so is through full company formation to establish a presence in the jurisdiction. However, this may take time and effort, meaning that it is worth considering another option as well, using a Professional Employer Organization (PEO).
PEO: fast and agile
A Professional Employer Organization (PEO), also known as a ‘Registered Employer’ or ‘Employer of Record’, is an organization that provides and supports companies with their human resources functions, from the early stages of recruitment to the payment of taxes and benefits. PEOs undertake the fundamental and time-consuming tasks of human resources teams, allowing companies to focus on the growth and success of their business.
The services of a PEO are particularly useful when businesses seek to hire a local workforce but do not wish to establish a local legal entity. Simply put, a PEO makes it easy to hire staff in El Salvador through an outsourced provider. It means you can enter the market and start hiring quickly, without having to commit to full entry until you are sure that it is what you want to do. It is worth noting that regionally there is beginning to be more regulation and PEO in El Salvador may not be viable in the future.
The long-term option: direct hiring
This is the gold standard of hiring in El Salvador, as it will give you full control over your employees as well as being sure that you will be compliant for the long term. It also gives you a higher status with potential job applicants, who will see you as a more secure long-term employer.
Before you start hiring employees in El Salvador, you will first need to get a sense of the legal, financial and cultural lay of the land. Things such as how to sort out the red tape associated with incorporation and how to manage payroll, for example. With a permanent legal presence in El Salvador, you will be fully liable for compliance with local law.
A local expert will help when hiring in El Salvador, as they will have an extensive network of qualified professionals for top jobs as well as a good idea of the local labor market. They will be able to advise on the best rates to offer and what type of profile you should be targeting. With anti-discrimination legislation important in El Salvador, especially for top jobs, they can make sure you are making a fair offer which complies with local law.
After placing adverts and receiving applications, you will want to move towards interviewing potential candidates. This should be done by both a team manager and HR representative at minimum, to make sure that everything is watertight in legal terms. You may want to include other people into the process in order to make a better assessment of the candidate.
It is entirely possible that you may wish to have a second interview, possibly involving other team members as discussed above. It is also common in the region and when hiring in El Salvador to provide candidates with an aptitude task to be completed. This usually takes the form of a dummy task that simulates the type of job that will be done in the future and confirm that they possess the skills cited on their CV.
Contracts, too, will be important. A local advisor will be up to speed on what you can and cannot offer. Bear in mind that you will have to follow all the rules established by El Salvador. In El Salvador, this includes clear conditions for the termination of a fixed-term or project-based contract.
Finally, your local advisor will be able to help you with the stages of both the hiring and onboarding process. They will make sure that you comply with standard requirements such as compulsory medical checks and make sure that any probation period is within the boundaries of those established by the labor law in El Salvador. This is generally two months.
Labor laws and regulations in El Salvador
Before making a move into the jurisdiction, it’s important for companies to understand the labor rights and responsibilities of both employers and employees in El Salvador. What follows are a few things that foreign business owners should know about when it comes to the local work culture:
- Work hours – The standard workday in El Salvador is eight hours, with the standard workweek up to 44 hours.
- Public holidays – There are 12-14 public holidays in El Salvador each year, depending on region.
- Vacation time – Workers in El Salvador are eligible for 15 days of vacation annually. Women are entitled to 16 weeks’ maternity leave.
- Contract types – There are essentially two types of contract in El Salvador, indefinite employment and fixed-term employment.
FAQs on hiring trends in El Salvador
Based on our extensive experience these are the common questions we receive from clients when looking to hire in El Salvador.
1. Why hire talent in El Salvador?
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 2025 and beyond. 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 the coming years.
2. Can I hire top talent in El Salvador?
Yes, absolutely. El Salvador has a number of strong cards to play in terms of talent:
- 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
3. What is the level of English for professionals in El Salvador?
University graduates are expected to achieve profiency to a B2 level. This will not necessarily be replicated throughout the entire workforce, but the general level is above the regional average for Latin America.
4. How many potential employees are there in El Salvador?
The Invest El Salvador website claims the country boasts a labor force of 3 million workers, 55 percent of whom are under the age of 40.
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.
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