Nearshore Americas

Paypal and Accenture Critique High-Skill Talent Availability in South America

Despite IT market growth in Latin America, the mismatch between supply and demand of qualified labor is a constant challenge for the sector. This imbalance directly influences the salary of the professionals in the region and increases costs in the IT sector.

Latin America’s IT market – including hardware, software and services – is expected to grow by 8.4% to US$139 billion in 2014, with smartphones and tablets standing out as the fastest growing segments, according to market intelligence firm IDC. Chile and Brazil will lead the growth in 2014 at 9% each, with this figure reaching 8% in Peru and 4% in Colombia, while IT spending in Argentina is expected to decline by 1% this year.

Competition is increasing in the region in terms of labor costs. “The operating cost in Latin America is very high, which makes the operation more difficult to pay. However, the region offers a significant growth potential for the companies that offset the investments,” said Valéria Porto, head of Paypal’s human resources department for Latin America.

Regional Differences

Salaries in Brazil are a little higher compared to the other countries in Latin America. “The difference used to be greater, but now Argentina has lower labor costs because of the crisis,” said Guilherme Portugal, manager of talent at Accenture, which has operations in Brazil, Mexico, Argentina, Colombia and Peru.

The main advantage of the Argentine labor market is that the workforce is fluent in English. On the other hand, Brazil and Chile offer lower direct taxes on the payroll, although the low availability of qualified workers has led to an increase in wage costs, according to a Brasscom survey published in 2012.

In this context, some companies have struggled to fill management positions. The requirements in terms of professionals’ behavioral and technical profiles, coupled with the shortage of qualified personnel, make recruitment processes increasingly lengthy and expensive. “The gap between supply and demand of workforce is becoming narrow,” Valéria said.

Finding the Right Profiles

PayPal, which was bought by eBay, started operations in Latin America three years ago and has offices in Mexico and Brazil. The region has since become one of the company’s most important markets and it has 160 employees in Latin America with 120 workers in Brazil.

In the online payment service sector, the difficulty is that there are no workers with specific professional background in this area. “The professional should have a sound knowledge about both the financial market and e-commerce, should be creative, trilingual (fluent in English and Spanish) and know how to deal with final customers,” Valéria said. She added that universities are starting to improve the training of these professionals. “However, the problem will not be solved at the pace we need,” she noted.

Besides the academic background, specific skills like the capacity to sell are very important in the IT sector, Portugal said. Accenture has 18,000 employees in Latin America, including 15,000 in Brazil, and desired professionals should also have the capacity to work with global teams. “Accenture is a multinational company and the employee participates in the development of global projects,” Portugal said. The company invests in employee training and offers a coaching program to help them to develop specifics abilities.

Due to the competitive market, companies have invested in employee retention programs. “At Paypal, we offer autonomy for employees’ work and they have direct contact with the CEO,” Valéria said. Furthermore, the company provides an attractive benefits package for its employees, which includes a stock option program as part of the salary.

While Brazil at least has a qualified workforce, Peru and Colombia suffer from a lack of professionals with the necessary technical background and qualifications, Portugal emphasized. “The Brazilian workers’ strengths are the flexibility and capacity to learn new things, while the main weakness is the fluency in foreign languages,” he said.

Brazil is the biggest IT market in South America and the sector continues to offer one the best average salaries of all industries in Brazil, reaching an average monthly wage of R$3,000 (almost US$1,255) according to Brasscom. The increase in the average wages was 10% from 2012 to 2013, almost 5% above inflation.

Future Growth

According to a Brasscom survey, more than 138,000 professionals were hired in Brazil’s IT sector up until November in 2013, creating a net surplus of 16,000 workers, which represents an increase of 9% compared to 2012. Hiring in Brazil is concentrated in Sao Paulo (47%), Rio de Janeiro (11%) and Minas Gerais (10%). “For this year, we expect that the hiring rate will remain stable compared to 2013, because 2014 is not a typical year. We will have many events in Brazil such as the World Cup and presidential elections which will impact economic growth,” said Sergio Sgobbi, Brasscom director for education and training.

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Systems development analysts accounted for 50% of total hires. This year the IT market will demand more programming experts, especially professionals focused on the development of applications and integrated management systems for mobile devices. “The mobile devices development creates the need to hire specialists in mobile networks,” Sgobbi said. Games programming will be another segment on the rise. Another promising area is related to the segment known as Internet of Things (IoT), which will require over the coming years the development of new systems, software and applications for management, control and use of devices connected to the Internet network.

Brazil’s IT sector grew by 10% last year, up from 8% in 2012, totaling US$123 billion. This year, IDC Brazil estimates US$175 million will be invested in Brazil’s Information and Communications Technologies (ICT) sector, which is the fourth largest in the world. In Latin America, IT investment will reach US$139 billion, growing 8.4% from 2013, according to the IDC forecast.

Silvia Rosa

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