Breakdown: Europe Eyes Latin America for Remote Hiring

Europe has its own nearshore, which it has cultivated for a while as a source for remote workers. Nevertheless, it seems like some of the strongest European economies recently picked an interest in Latin American talent.

What’s new?: Argentina, Colombia and Brazil were highlighted in the 2023 edition of Deel’s State of Global Hiring Report. Deel is a provider of employer of record (EOR) services with one of the most popular platforms for remote hiring, particularly in the tech space.

• The three countries ranked third, fourth and fifth respectively for the number for workers registered in Deel’s platform, a sign of both the availability of talent from those specific geos and their success in locking international contracts.

The details: While a lot of the contracts for these three countries came from clients within Latin America, much of the hiring was done also by Europeans. Spain, Germany and the UK were the most prominent hirers.  

• The most solicited roles for Argentina, Colombia and Brazil were –in no particular order– teaching, data, finance, consulting and customer support/success personnel.
• Software developer/engineer roles remained as the most solicited globally.
• Deel registered a 55% increase in global hiring of Latin American talent in 2023.
• 51% of remote hires done through Deel come from North America, followed by the EMEA (Europe, Middle East and Africa) region, with 31%, according to the platform’s own data.

Flashback: In Deel’s previous report, only Argentina ranked among the top five countries with the most workers in the platform. Spain was the only European nation that showed major interest in hiring remotely from Argentina. 

• Deel reported a 161% jump in the volume of Latin American workers being hired internationally in 2022.

Worth noting:  North American salaries from Deel contracts dropped 5.5% during 2023, while they increased 7% in the EMEA region. In Latin America, salaries moved up 2%.

• Argentina and Peru stood out as the only Latin American countries where global contract offers were prominently made in either euros or US dollars.

Zoom out: We’ve reported on Europe’s interest in the American nearshore. “Location agnosticism” has been the dominant trend in sourcing for years now. 

• Business leaders –in tech, most of all– aren’t as concerned about the difficulties of managing a remote workforce, as long as the skills are there and teams are small enough to keep track of.
• Nevertheless, location and familiarity still hold weight.

Where are they?: Mexico did not crack Deel’s top five countries for volume of workers in the platform, and the US wasn’t among the top hirers for the Latin American countries that did make it to the top of the list. 

• The Mexico-US pipeline is the most prominent example of talent flows and the nearshoring of services in the Americas. 
• The absence of that relationship in Deel’s report might be attributed to the exploding variety of nearshoring and staffing agencies in Mexico and the US. 
• Also, the Mexico-US pipeline has existed for decades, with well-established mechanisms that allow for the importation or remote hiring of workers. In that sense, Deel might be proving a more valuable platform for partnerships where sourcing pathways aren’t as developed. 

NSAM’s take: We’re not surprised by this apparent surge in interest for Latin American talent among European business leaders. The region has proven its chops as a more than competent source not only for basic tech and business services, but for innovation and transformative partnerships.

Whether this positioning remains or even improves will depend on the efforts of Latin American businesses and governments. As stated at the top, Europe has a plethora of options for nearshoring and offshoring. From proven partnerships in India and Eastern Europe to emerging alternatives in Africa, Asia and the Middle East, Europeans are spoiled for choice. 

Service providers in Latin America will need to ramp up their promotional efforts if they intend to compete directly for relevant positioning in the minds of potential European clients. It won’t be easy, though, taking into account the weight of historical misconceptions of backwardness and underdevelopment, plus the unwillingness of many customers to be open about third party partnerships which involve foreign workforces.

There’s also the issue of data security. The European Union has some of the strictest rules for data management and security, and services providers are expected to comply. As of today, Argentina and Uruguay are the only two Latin American countries who have been officially applauded by EU authorities for their commitment to data compliance. 

This does not leave the rest of the region out of the picture. It underscores, however, the relevance data security holds in the minds of European regulators and businesses. As the topic becomes increasingly relevant globally, the rest of Latin America should take its approach to data security laws and regulations more seriously.

On a more positive note, Deel’s latest report paints a picture that’s closer to the dreams of a truly global labor marketplace. The advent of remote work pushed the gates open for sourcing professionals who had been constrained by location worship. Even then, it feels as if a genuine sense of global sourcing has only come to be over the past couple years.

The game is on.