If you are looking to enter the Colombian market, or considering different Latin American countries as sources of talent to support your business, hiring staff via a professional employer organization in Colombia could be your ideal choice.
Because when you hire through a professional employer organization in Colombia, they can assist with the recruitment, hiring, onboarding, and payroll of those staff, meaning that a major administrative and compliance issue is taken care of, while your market entry is completed in only the time it takes to find the right team members.
A professional employer organization is often referred to as a PEO or as an employer of record (EOR), while providers will sometimes advertise themselves as a PEO payroll company, owing to the management of salaries being one of the most sought after services they offer.
Colombia is an ideal destination for seeking talent in many sectors, with the country boasting a large and highly-educated services industry, as well as offering a growing pool of IT and other skilled technicians in the capital and other major cities, making outsourcing in Bogota a popular option, while Medellin has been named as one of Latin America’s new “Silicon Valleys” due to its burgeoning innovation sector.
Beyond professional services and IT, Colombia has a massive agricultural sector, as well as a well-established industrial base, meaning that manpower for any type of industry of all skill levels is available.
However, even though Colombia is known to be business- and investment-friendly, meaning the likes of company formation is more straightforward than in some other parts of Latin America, entering the market and doing business in the country still comes with hurdles for newcomers. Among those are the cultural and linguistic barriers, as well as compliance concerns related to dealing with a new regulatory regime.
For that reason, hiring via a professional employer organization in Colombia can be particularly attractive, because the PEO firm will be staffed by experienced professionals, able to identify and avoid common regulatory pitfalls, as well as providing access to an established recruitment network with a strong track record of hiring the best talent.
Why hire through a PEO firm in Colombia?
When you hire through a professional employer organization in Colombia, not only do you tap into the local knowledge and contacts that the PEO firm has, while also removing a major administrative and compliance issue, but you also avoid the need to go through company formation and subsequent liquidation.
That is a particularly attractive prospect for anyone seeking to hire an indvidual or small number of senior staff to manage operations, direct regional sales, or undertake other executive duties. It is also ideal for anyone who is seeking support on a short-term or limited-scale basis — for example hiring a team of software developers to deliver a particular project.
One of the big advantages of working with a PEO firm in Colombia if you do not already have the staff lined up that you wish to hire is the fact that they will have an established recruitment network and good knowledge of the best educational institutions and local companies that ideal candidates may have experience with.
Moreover, when the time comes for you to close operations in Colombia, your market exit will be completed in only the time it takes for staff hired via a PEO firm to serve their statutory notice period.
A professional employer organization in Colombia will also take care of a range of employee-related concerns, including drawing up contracts in accordance with the law, honoring all statutory leave allowances, paying salaries and bonuses correctly, and complying with all tax-related matters.
That will not only guarantee that you avoid legal inconveniences and financial penalties for non-compliance, but will also help you establish and maintain good standing with local authorities. That will be of particular value should you subsequently decide to deepen your commitment to the market by forming a company and expanding operations.
Compliance matters a professional employer organization in Colombia takes care of
A professional employer organization in Colombia will take care of the following regulatory and compliance concerns related to having employees in the country. Your PEO firm in Colombia will also inform you in the most timely manner possible when changes to these are due to occur.
- Working hours: in Colombia a standard working week is 48 hours long, generally made up of six days lasting eight hours each.
- Overtime: According to Brazilian labor law, employees mustn’t work more than two hours of overtime per day.
- Paid vacations: After 12 months of employment, an employee is entitled to 15 consecutive days of paid leave, of which they must take at least six days during the following 12 months.
- Bonuses: Colombia, like many Latin American countries, has a ‘13th salary’ bonus that employees are entitled to — consisting of a full month’s salary, usually paid in two installments in the middle of the year and at the end of the year.
- Parenthood leave: Mothers are entitled to 18 weeks of maternity leave, which can be extended to 20 weeks and by law must start at least a week before the due date of the birth, while fathers are allowed eight days of paternity leave.
- Voting leave: In Colombia, employees are entitled to half a day of personal leave to vote in local and national elections, should they fall on a work day.
- Trade union leave: Employees are entitled to personal leave in order to serve on a trade union committee.
- Minimum wage: As of January 2022, the minimum wage in Colombia was set at 1 million Colombian pesos per month (approximately US $263).
Biz Latin Hub can be your PEO firm in Colombia
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in 17 key cities around the region, including Brazil’s economic hub Sao Paulo.
Our portfolio includes accounting & taxation, company formation, due diligence, hiring & PEO, and corporate legal services, while our unrivaled regional presence means we are ideally placed to support multi-jurisdiction market entries and cross-border operations. If you need a PEO firm in Colombia, we are ready to help.
Contact us today to find out more about how we can assist you.
If you found this article on hiring through a professional employer organization in Colombia of interest, you may want to check out the rest of our coverage of this South American country. Or read about our team and expert authors.
Want to know more about doing business in Latin America? Check out the short video below.