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The collaboration of global business with Latin American companies and employers has been boosted enormously due to digitalization and the growth of international contracts.
In recent years, the development of international sourcing in Latin America has been unprecedented, reporting a growth rate of 286% in 2022, and an additional 35% by 2023, according to La República.
This is based on multiple socioeconomic factors that have allowed the region to consolidate its position as a destination of great interest for international companies.
The 5 factors boosting international sourcing in Latin America
The boom of international sourcing in LATAM didn’t just happen overnight. The region shows steady growth over a number of years and several factors have helped cement its place as one of the world’s leading source for global talent.
1) Free trade agreements
Free trade agreements have helped reduce tariff barriers between countries and establish international standards for business collaboration. This process has not been limited to trade in goods but has expanded strategic alliances for the exchange of services and technologies. It has also involved the mobilization of Latin American labor talent abroad.
2) Competitive cost rate
Companies outsource part of their operations to countries with geographical proximity at competitive prices, a phenomenon known as nearshoring, or nearshore outsourcing. They also hire remote personnel, taking advantage of increasingly widespread processed outsourcing.
3) Diverse workforce
Having a diverse and distributed workforce has become an asset in itself, thanks to the contributions made by personnel from different locations. In Latin America, workers offer skills and practical experience in different areas, as well as a local perspective, which is interesting for expanding companies.
4) Streamlined communication
Latin American countries are located in similar timezones to major international markets, the United States and Canada, which already facilitate communication by themselves. Furthermore, this region has shown substantial growth in English proficiency rates since the pandemic.
5) Global hiring services
The consolidation of companies specializing in outsourcing and employer of record services facilitates contact between the Latin American labor force and foreign companies. They are also essential for managing payroll and human resources processes, as they know the corresponding local regulations in detail.
Success stories of international sourcing in Latin America
- Amazon: has operations in Brazil, Mexico, Colombia, Chile, and Argentina. In these countries, it has customer service centers, distribution centers, and personnel working with the cloud services infrastructure.
- Microsoft: has a widespread presence in Latin America, with offices in countries such as Argentina, Brazil, Chile, Colombia, Ecuador, Honduras, Mexico and the Dominican Republic. Cloud services, software solutions, and technical support are offered in the region.
- Cisco: It is present in countries such as Colombia, Argentina, Costa Rica, Chile, Peru, Brazil, and Mexico. In these countries, it develops solutions in cybersecurity, the Internet of Things, and connectivity solutions, among others.
Latin America’s rise as a hiring destination
Venecia Carrasco, CEO and co-founder of Baja Nearshore, points out that new possibilities in individual contracts have attracted startup founders to hire in Latin America. Today, companies can hire individuals as part of their team without committing to a full staff or Latin American department.
In such a scenario, technology and software professionals are popular in international sourcing, but any industry can benefit from hiring from Latin America. The talent pool is diverse and highly skilled, making it an attractive option.
And, while tech and software are well-known sectors, there are significant opportunities in fields like digital marketing, customer support, and finance. Many professionals in these areas possess strong bilingual skills and a deep understanding of the US market, making them valuable assets for international companies.
Venecia Carrasco has discussed this further in an interview with Serviap, regarding trends in international sourcing and Latin America’s popularity as a talent source. You can read it here.
Outlook for global hiring in Latin America
International sourcing in Latin America has been driven by new dynamics in talent recruitment, as well as the search for a diverse workforce. The reduction of economic risks and the positioning of international recruitment agencies are also boosting this sector.
This has represented access to talent at competitive costs, and it has contributed to economic development and infrastructure improvement. According to the current outlook, this trend will continue to grow, relying heavily on nearshoring and technological innovations emerging globally.
Contact us for assistance with international sourcing in Latin America.
