By Francisco Méndez, SPHRi, Manager, Client Solutions, GoGlobal
In today’s global marketplace, accessing international talent is crucial for companies aiming to innovate and expand. LATAM, for example, is increasingly recognized for its burgeoning potential in hiring and nearshoring. As a result, the region has become a focal point for international companies seeking to capitalize on its diverse talent pool and strategic advantages.
However, accessing talent pools abroad is not always easy as the traditional route of employer-sponsored visas often presents challenges and limitations, which is prompting international companies to look at alternative options for engaging LATAM talent.
For instance, U.S. employers seeking to hire high-skilled foreign nationals face significant hurdles due to the stringent constraints of the H-1B visa program. Notably, the cap for the year 2024 was reached well before the conclusion of 2023, signaling a highly competitive and constrained environment for securing these visas. Projections suggest that the cap for 2025 may be reached even earlier in 2024, exacerbating the challenges faced by employers in accessing up-and-coming talent in LATAM.
To shed light on this issue and explore possible solutions, we’re joined by Francisco Méndez, SPHRi, Senior Manager of Internal HR and Client Solutions at GoGlobal, who is based in Mexico and serves the organization’s growing footprint across LATAM.
Why are companies increasingly turning to LATAM talent for hard-to-fill high-demand jobs?
Francisco Méndez (FM): LATAM boasts a rich pool of talent in hard-to-fill roles, such as software developers, across various industries, including technology, finance and engineering. Year after year, more international companies are drawn to the region for its skilled workforce, competitive labor costs and cultural compatibility with North American and European markets.
Additionally, LATAM’s time zone proximity to major business hubs enables real-time collaboration, making it an attractive destination for remote work and globally distributed teams.
Are there any cities in LATAM that stand out as hubs for international remote talent?
FM: Several LATAM cities have emerged as prominent hubs for international remote talent. These areas offer a conducive environment for remote work, with a blend of modern amenities, cultural richness and business opportunities.
For example, Mexico City in Mexico, São Paulo in Brazil and Buenos Aires in Argentina stand out for their vibrant urban landscapes, diverse talent pools and affordable cost of living – making them attractive destinations for remote professionals seeking a dynamic work-life balance.
Similarly, Bogotá in Colombia and Santiago in Chile offer a combination of stability, infrastructure and scenic beauty, appealing to remote workers looking for quality living standards.
These cities, among others, showcase LATAM’s growing prominence as a hotbed for international remote talent, providing ample opportunities for professionals to thrive in a remote work environment. As talent congregates in these hubs, international companies follow for hiring and expansion opportunities.
Can you tell us more about the process for hiring through an employer-sponsored visa in LATAM?
FM: Employer-sponsored visas can present challenges due to bureaucratic procedures and potential delays in processing times. Immigration authorities across the region often handle heavy workloads, leading to extended timelines for visa approvals. While some countries in LATAM operate with specific quotas for foreign workers, typically favoring a ratio of nine nationals to one foreign worker, it’s essential to note that not all countries adhere to this quota system.
Notably, companies operating in certain LATAM nations can benefit from trade agreements like Mercosur (a regional trade bloc in South America) or T-MEC (a treaty between Mexico, the United States and Canada). These agreements serve to streamline immigration procedures and promote talent mobility among member nations, expanding the available talent pools and enriching the diversity of skilled professionals
At the same time, varying immigration policies and evolving regulations add further layers of complexity to the visa acquisition process, requiring careful navigation and expertise to ensure successful outcomes.
For companies that wish to engage local talent in LATAM, what are some other options apart from employer-sponsored visas?
FM: Companies seeking to engage local talent in LATAM have several options available to them other than employer-sponsored visas. Firstly, they can opt to set up a business entity in the region, although this approach comes with its own set of challenges, including regulatory hurdles, bureaucratic delays and substantial upfront costs. Moreover, companies aiming to hire foreign workers must navigate additional hurdles beyond setting up their entity. This includes registering with the immigration authority in each country to obtain authorization for sponsoring work visas.
Alternatively, companies may choose to engage independent contractors (ICs), allowing for flexibility in hiring while mitigating the need for a formal business presence. However, this option poses risks such as misclassification of workers, risks to intellectual property (IP) and potential legal liabilities.
Another viable solution is hiring through an Employer of Record (EOR), which provides a compliant and efficient way to onboard local talent without the complexities of establishing a legal entity or managing contractor relationships. EOR services extend beyond basic administrative tasks, encompassing the management of bonuses, statutory benefits and supplemental benefits nuances – ensuring comprehensive compliance with local regulations and cultural expectations.
The EOR approach offers companies the flexibility to scale their workforce quickly and access the skills they need while ensuring compliance with local labor laws and regulations.
How does an EOR help international companies overcome talent acquisition challenges in LATAM?
FM: An EOR serves as a strategic partner for companies navigating international talent acquisition, hiring and termination regulations in LATAM. By leveraging the EOR’s expertise and local presence, businesses can streamline the hiring process, mitigate compliance risks and expedite market entry. The EOR assumes legal responsibility for employing workers on behalf of the hiring company, providing a compliant and cost-effective solution for accessing foreign talent without the complexities of employer-sponsored visas.
The arrangement can be of a temporary nature, serving as an interim “bridge” solution while the company explores the establishment of a local entity and subsequent direct hiring through it. Alternatively, it may serve as a permanent setup.
How can an EOR or cross-border HR services provider help if a company wishes to engage independent contractors?
FM: Given the increasingly complex landscape of regulatory compliance for ICs, companies must be agile and conduct thorough due diligence to avoid risks and liabilities.
Some EOR and cross-border HR service providers offer Agency of Record (AOR) services, which can assist companies in engaging independent contractors abroad. By leveraging these services, companies can ensure compliance with local regulations while accessing specialized skills quickly and seamlessly worldwide, regardless of location. GoGlobal’s IC Solutions, for instance, provide comprehensive compliance evaluations and AOR services, empowering companies to engage ICs compliantly and efficiently.
Through services like compliance evaluation, contract finalization and payment facilitation, cross-border HR service providers can offer a valuable solution for navigating the complexities of engaging independent contractors in LATAM and beyond.
How can an EOR or cross-border HR services provider support a company opting to hire through an employer-sponsored visa?
FM: Employer-sponsored visas often come with stringent quotas and availability limitations in many countries. However, partnering with a reputable EOR service provider may ease the burden and help the process move along.
With the right expertise in visa sponsorship, the EOR can meticulously screen prospective candidates to ensure alignment with registered business scopes in host countries. This involves evaluating factors such as education, experience and nationality.
Despite thorough preparation, visa approval is not always guaranteed due to factors like background checks and discretionary decisions by immigration authorities. In these cases, the EOR should be able to work closely with the company to explore alternative avenues for talent acquisition.
Key factors to consider when selecting an EOR partner include expertise, network and reliability. In particular, an EOR should stand out to you if it has extensive experience and strong relationships with immigration authorities across multiple countries.
What role do talent mobility and remote work play in LATAM’s workforce landscape?
FM: Talent mobility and remote work, particularly the rise of digital nomadism, are increasingly shaping LATAM’s workforce landscape, offering new opportunities for both employers and employees. Digital nomad visas, which allow individuals to work remotely while residing abroad, have gained traction. We’re finding this trend to be especially prominent in LATAM, where many countries are known for attractive lifestyles and lower cost of living.
EOR services can play a crucial role in supporting the trend toward talent mobility by facilitating the end-to-end employee experience, from recruitment to termination. Your EOR partner ensures adherence to HR laws by overseeing compliance with local labor regulations, administering payroll and benefits, managing tax obligations and adhering to remote work-specific laws.
By leveraging EOR services, companies can tap into new talent pools of remote workers in LATAM without the need to establish a physical presence in each country. This flexibility enables businesses to access specialized skills and diverse perspectives, while minimizing the administrative burden and legal risks associated with international employment.
Ultimately, the rise of remote work and the trend toward talent mobility are reshaping the way international companies think about LATAM for hiring and operations. EOR services are poised to support this HR evolution by providing seamless solutions for managing remote workers across borders.
How does an EOR help to build bridges between companies and top talent in LATAM?
FM: An EOR acts as a bridge between companies and international talent in LATAM by facilitating seamless employment arrangements, ensuring regulatory compliance and providing comprehensive support throughout the hiring process.
By partnering with an EOR and cross-border HR services provider, companies can overcome barriers to entry, expand their global footprint and harness the full potential of LATAM’s diverse talent pool – all while focusing on their core business objectives.
Watch GoGlobal’s recent webinar on demand From Singapore to Spain and Beyond: How to Hire and Fire Around the World or contact us to learn more about hiring and firing practices around the world. You can also download our new guide: Building a Resilient Workforce in Latin America Guide.