Is Expansion to Latin America on Your Radar? Staffing Considerations From Experts in the Field

By: Thaina Guimaraes

Tapping into the Latin-American (LATAM) market – either to expand a business or to expand your employee base – can unlock a number of opportunities. The LATAM region has a large population base and is a force in the global economy.  

If your company hasn’t done business in Latin America before, you likely have questions about hiring logistics, legal details, and other matters. As is the case for doing business in any part of the world, setting up shop in a Latin American country can be complex. Finding experienced partners who are already working in those regions can be key to getting established. 

What is the workforce ecosystem in LATAM? 

Central and South America have 21 countries with economies in various states of growth. Rio de Janeiro and Sao Paulo in Brazil, Buenos Aires, Argentina, and Mexico City are the largest urban centers in the region and draw significant investment from countries around the globe.  

Oil and gas are the predominant industries in many Latin American countries, but IT, telecommunications, and many other industries have chosen to set up operations in the LATAM region, all for the same reason: it’s a great place to live and do business. Many companies also find it an ideal place to build a diverse, educated workforce. Regardless of the country, the people of Latin America are welcoming to other cultures and the business environment is receptive to growth.  

One way to enter the market is to engage a partner already working in the region, like People2.0, to take on the administrative tasks involved in hiring and paying workers. People2.0 acts as the employer of record (EOR) and takes on the work of managing benefits, contributions, accounting, and legal tasks. Your company can get up to speed quicker without having to register in a new country and navigate the tax and legal details of a new location. This is especially attractive to large businesses hoping to expand quickly into LATAM or that have a pressing need for a dedicated workforce in the region. But it is also attractive to small to medium size businesses that need support to quickly go to market without setting up an office and incurring the costs of hiring lawyers, accountants, and tax advisors.  

Success stories abound 

A major telecommunications company successfully partnered with People2.0 recently as they sought to build out their infrastructure in the region and needed help managing the employment of subcontractors for engineering work. This company typically hires directly and deploys their own employees when they are expanding into new markets, but when they hit their budget for hiring, they turned to partners to help finish the job with contingent labor. Acting as the company’s EOR, People2.0 was able to hire a local workforce as well as secure work visas for engineers coming from abroad to work on site.  

Another example of a global company that engaged the help of an in-country partner involved an oil company that needed help with a project in Brazil. The company planned to bring in expertise from other countries to help with deep-water drilling. People2.0, already established in Brazil, was able to assist with visas and on-the-ground expertise to help bring all of the specialists together. 

A large technology company, looking to set up operations in Argentina, sent a director from the U.S. with the goal of assembling a team. Because the technology company was not registered as an entity in Argentina, complexities arose. Foreign companies can’t pay workers and have to fend with other legal constraints while they wait for registration, but this technology company was able to get started faster by engaging People2.0 as the EOR partner. People2.0 hired the first Argentinian team for this major technology company and took care of the administrative matters that lawyers and accountants for the technology company would have had to learn and do. The team was successfully established using a local workforce, which was a win-win for the company looking to expand in a new region and for local workers who were able to provide for their families with salaries from new jobs. 

Factors to consider when entering LATAM markets 

Employers take on costs in addition to salary when hiring in Latin America, something that isn’t always a consideration in other regions. The employer burden in Latin American countries can (and probably does) include worker’s compensation coverage, healthcare, retirement contributions, vacation, and other time off. Workers in Latin American countries enjoy worker protections that may not be familiar to companies that aren’t used to operating there. However, the value of a U.S. dollar is high, so budgets go further and costs are generally lower even with additional costs to employers to cover mandated worker benefits. 

In addition, workers in Latin America have a lot of protections when it comes to terminations, retirements, time off, and other facets of their work experience, so careful consideration of the rules and regulations is needed when setting budgets. 

Laws and regulations vary from country to country in LATAM’s 21 countries, which makes operating in the LATAM region feel more like Europe, the Middle East, and Africa than North American when it comes to navigating differences across borders. U.S.-based companies that have only operated in North America have found these logistics overwhelming at times, but local experts are key to helping with these complexities.  

Finding experienced support is key 

Many of People2.0’s most successful partnerships have started with clients describing what they hope to accomplish with a workforce or company expansion in Latin America. From there, People2.0 can find a solution. Our mission is to make it easy for companies to expand and grow by providing expertise and services globally. Sometimes, a seemingly risk-averse company is simply unaware of the services and possibilities available and the expertise that exists. This is especially true of the opportunities waiting to be found in Latin America.  

Thaina Guimaraes

As Vice President of Client Services - LATAM, Thaina is responsible for participating in the sales and implementation process of the new clients, building and maintaining successful relationships, growing accounts, and working with internal and external stakeholders to deliver best-in-class customer service to People2.0 clients and partners across the LATAM region.

With over 14 years of experience in the industry, and proficiency in English, Portuguese, and Spanish, Thaina understands clients' and workers' needs, the cultural differences, and challenges of navigating the region.

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