Nearshore Americas

Santiago and Córdoba Show Biggest Underperformance in “Talent Gap” Analysis

In 2010, Nearshore Americas presented its own ranking “of the top Latin American cities for technical training and most available IT workforce”. Four years later, these cities remain leaders within Latin America, though they must contend with the pressure of providing enough highly skilled talent to satisfy a growing demand in the industry. They are also being increasingly challenged by other locations – such as Montevideo, Uruguay – that have invested to develop their infrastructures and human resources.

Here’s the current of state of play in Latin America’s big six:

Monterrey, Mexico

The city hosts more than 400 IT firms, a lot of them focused on software development and integration. It expects a bigger demand for IT professionals, but there are strategies in place to prevent the talent deficit from turning into a problem.

Each year more than 1,800 new graduates from IT disciplines enter the labor market with great chances to find a job that pays an average of 14,000 pesos (US$1,076) a month. “But we are not only looking at them, we consider other 6,000 graduating from other fields, as we enable a program that can retrain them as software engineers in 22 weeks, the same strategy applied in India,” says Guillermo Safa, director of the Software Industry Council of Nuevo Leon (Csoftmty).

Universities and corporations work together to keep track of new developments in the industry. Recently the Csoftmty circulated a report describing the “ideal IT graduate,” helping some institutions to adjust elements of their curricula.

Monterrey is known for its prestigious universities, including the Monterrey Institute of Technology and Higher Education (ITESM), the Regiomontana University and the University of Nuevo Leon. The quality of higher education programs and the proximity to the U.S. border contribute to a higher concentration of English speaking professionals.

Santiago, Chile

In terms of a talent gap, Santiago might be the city with the highest stakes. The situation is challenging as there is already a job deficit in the IT industry where there is space for 12,000 new employees and another 14,000 openings are due by 2016. “It is worrisome, universities are only graduating 5,500 professionals and technicians per year, even though our workforce grows an annual 9%, above the OCDE’s average,” says María Angélica Zulic, general manager at job-finding site Laborum.

The fact that employers cannot always find the right talent puts strains on the situation. Corporations today are demanding more competitive professionals who are specialized and bilingual, have acquired software certifications and show soft skills. “But if Santiago does not manage to produce them, then companies will turn to Colombia or Peru to find a technically similar but cheaper talent; if we charge more, our people need to be better, otherwise we will be left out”, claims Marcelo Solari, IT staff manager at Kibernum.

On the other hand, Santiago attracts a lot of foreign talent. Higher salaries, security, strong infrastructure, better quality of life and welcoming immigration laws are incentives, along government programs such as Start-Up Chile.

Bogota, Colombia

The city’s biggest asset is that it keeps harvesting high-quality IT talent which can be hired at more affordable prices. An entry-level salary in the BPO sector is around US$550 a month, or US$1,224 for ITO jobs. Meanwhile, the local government is investing in enhancing digital capabilities and services – through initiatives like the Plan Vive Digital 2014-2018 as well as supporting the training and education of the necessary IT talent. If the city manages to meet its goals of adding 75,000 new students to IT disciplines and reorienting 9,000 engineers from other fields, Bogota’s future as an BPO/ITO hotspot in Latin America will look very promising.

Nowadays new IT graduates, even students from the best universities, have no difficulty landing jobs within the industry. “Companies always ask us for more interns than we can offer,” points out Jairo Hurtado, director of the Electronic Engineering Department at the Pontifical Xavierian University (Javeriana). Top-tier universities such as the Javeriana keep close ties to broad business communities to make sure they train students to meet the needs of various employers. To provide specific expertise and certifications, the university also partners with companies to offer non-credit courses.

Guadalajara, Mexico

While Monterrey aims to retrain its engineers, Guadalajara’s strategy is to attract them. That is how Veracruz and other locations with no IT Industry have become complementary labor sources. “As the city offers a higher quality of life, it’s more attractive than other competitors despite lower salaries,” argues Jacobo González, director of the Jalisco Institute of Information Technologies (IJALTI).

But not all imported labor is homegrown. Gonzalez refers to a 20% that currently comes from other countries: “we welcome foreign talent because it adds volume and internationalizes us; today, at the workplace, Mexican professionals are working alongside colleagues from Argentina, Colombia, India, Taiwan, Costa Rica, North America, etc.”

In Guadalajara, the IT industry has grown at an annual rate of 15% for the past six years; recent trends point to fostering developments of high value KPO services. Oracle, IBM, Intel and Tata Consultancy Services are some of the giants operating there, easily accommodating the 2,000 new IT professionals who graduate each year, besides other groups which complete reorientation and certification programs supported by the government and private companies such as IBM or the Indian NITs.

Córdoba, Argentina

Although it is home to great technical universities, Córdoba does not produce the necessary number of IT graduates to satisfy big players and small enterprises. However, the key to its regional advantage is a very competitive and highly specialized pool of professionals. “.Net, Java and Python developers are the most demanded positions,” according Matías Sarmiento, IT manager at Experis.

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Students are commonly hired even during their first year of studies and have great opportunities to gain experience very early on. On the flip side, universities can see their estimates and plans altered after many students delay their graduations.

São Paulo, Brazil

As big as the population is, with a large pool of IT professionals, São Paulo still finds it difficult to meet the labor needs of the many companies operating there, whether outsourcing cloud computing services, big data analytics or software development. Although new graduates access a market full of possibilities, companies do not always find what they seek. “Partly because technologies have diversified at such a fast pace, there’s pressure on professionals and schools to keep up with new types of products”, explains Suzie Pires Guimarães, recruitment leader at IBM Latin America. That is why some companies invest in training and certifying their own employees. Companies still need to pay higher salaries to retain their most qualified professionals.

English remains an issue, a factor that can make a difference when negotiating wages. However, “the mindset has changed since four years ago. Professionals see the importance of speaking the language; this could positively influence the future landscape,” points out Fabiano Kawano, IT division manager at DNA Human Capital.

Even with its limitations and challenges, São Paulo has become a technological hub in recent years, attracting a great number of companies, investors and talent from all around the world.

Jennifer Roig

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