Colombia is becoming an increasingly popular outsourcing destination, and for good reason. Just a few years ago, Citibank and the Wall Street Journal named Medellin the world’s most innovative city, over the likes of London, Tel Aviv and New York. It’s even been dubbed the Silicon Valley of South America. If you’re considering doing business in Colombia, it’s important to understand human capital trends in the country. Here’s everything you need to know.
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Tech Graduates & Workforce
The Colombian government has put a heavy focus on the tech sector, and it has proven successful already.
- Tech Graduates. More than 14% of university students in Colombia graduate with technology-based degrees, according to the Ministry of Education. Every year, more than 13,000 Colombian students obtain a degree in either IT or engineering.
- Tech Professionals Entering Workforce. Between 2001 and 2013, more than 340,000 professionals in Colombia joined the IT sector, providing a huge talent pool from which companies can choose.
- Increase in Programming Training. The country’s ICT Mission 2022 aims to provide programming training to as many as 100,000 people by the end of 2022.
- Internet Access. The country’s current president, Ivan Duque, also said he hopes that at least 70% of the country will have high-speed Internet access by that time as well.
- Global Tech Company Influx. All this investment from the government has resulted in major tech companies such as Microsoft, Facebook and Google opening offices in Colombia. That, in turn, has led to more Colombians seeking skills in tech.
The great part about tech education in Colombia is that shorter- and longer-term degrees and programs are available at both private and public universities. These schools are also equipped with the latest technologies, giving students the chance to work with equipment and programs they’ll use in the professional world.
Key Sectors for Local Activity
Even with the increased focus on technology, Colombia’s industrial sector is thriving. Here’s an overview of the country’s main business sectors:
- Mining & Textiles. Colombia’s main industries revolve around mining for emeralds, gold and coal especially. It also has a strong business that revolves around petrochemicals, oil, clothing and textiles.
- Tourism. Tourism is a large driver for the economy, especially in the coastal regions of the country. But tourism has also increased in recent years in landlocked areas such as Bogota and Medellin. In fact, more than 15 million tourists are expected to visit the country every year by 2023.
- Construction. The construction industry has grown almost 20% annually in recent years. It’s getting a strong boost from the government’s investment in transportation infrastructure.
- Technology & Electronics. Colombia is also the second-largest high-tech market and the second-largest producer and exporter of all electronics produced by companies in Latin America.
Key Sectors for Outsourcing
Colombia has become a great destination for companies to outsource software development. When tech giants such as Microsoft, Facebook and Google invest in a country, it’s safe to say there’s a good reason why.
Cities very forward-thinking and innovative, which helps drive start-up projects and new ideas. This has attracted new upstart companies who are looking for fresh ideas. At the same time, the favorable business climate and safety and security of the country bring large, established companies here as well.
Was once known as a leader for industrial outsourcing. But, in recent years, that has switched to a hub for the outsourcing of services and processes. This all ties into the focus on the education of its people and the expansion of investments in technology infrastructure.
Colombian english speakers
Is considered the most “business friendly” country in Latin America is the fact that many Colombians speak both Spanish and English. While they have a lower English-speaking proficiency rating than some other countries in the world, the government and even many private companies have been encouraging people to learn the English language.
As more investment is made into Colombia from English-speaking countries—and as more tourists travel to the country—residents are becoming more proficient in English.
The average wages for Colombians are significantly lower, on average, than that of other countries. The average Colombian software developer, for example, earns $11,753 USD per year. By contrast, the average software developer in the United States earns $72,162 per year.
Of course, salaries can range depending on the experience level of the person you need to hire. A new software developer, for instance, may start by earning $8,196 annually. But even positions at the upper end of the spectrum, such as a team lead or architect, only earn roughly $32,786 per year.
The Colombian economy, particularly the IT sector, has experienced substantial growth over the last few years. However, the cost of hiring still remains very low compared to other parts of the world. Since the skillset and education of their workers is still high, this provides a nice cost offset for many U.S.-based companies who are considering outsourcing positions to the country.
Prominent Cities for Business
Colombia has a number of forward-thinking and tech-centered cities. At the top of that list is, of course, Medellin. In 2013, Medellin was named “The World’s Most Innovative City” by the Urban Land Institute. Since then, it has kept true to that moniker.
Some top cities for business in Colombia include:
- Medellin, “The World’s Most Innovative City”, with a focus on technology and tourism
- Cali, with a focus on tourism as well as industrial and agricultural products
- Bogota, the capital city with a strong focus on financial services
- Cartagena, a tourist destination that serves a huge need for the transportation industry
- Barranquilla, which has a large focus on infrastructure and project management IT services
- Bucaramanga, which focuses on the very successful oil industry
Turnover rates are often higher in Latin American countries than other parts of the world. However, turnover rates have been improving in recent years in Colombia.
Sectors with the highest turnover rates include:
- Retail & consumer products: 13%
- Media & entertainment: 11.4%
- Professional services: 11.4%
- Financial services & insurance: 10.8%
- Telecommunications: 10.8%
- Technology: 8%
Again, these turnover rates are improving. In the last few years, the turnover rate for the technology sector has dropped from 13% to roughly 8% per year.
Is Colombia Right for Your Business?
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in Colombia.