Remote Jobs are Drying Up in LATAM, Kneecapping Salaries

The availability of remote jobs is waning in Latin America, leading to shrinking salaries for workers in the region.

A Bloomberg report shows a significant shift in hiring practices across Latin America as companies call employees back to the office.

This shift coincides with a dramatic decline in remote work opportunities. Currently, only 10% of companies in Latin America offer remote work, a stark contrast to widespread adoption during the pandemic.

This trend places Latin America significantly behind other regions when it comes to remote work adoption. The Europe-Middle East-Africa region leads at 29%, followed by Asia-Pacific at 25% and North America at 24%.

Interestingly, the technology sector seems to be bucking the trend. While other roles experience salary reductions, tech professionals like software engineers and data analysts see stable or even increased salaries. Bloomberg Línea reports that most software engineers and data scientists maintained or slightly increased their pay.

The biggest impact falls on non-tech positions. Marketing professionals have seen a substantial drop in average annual salaries, plummeting from US$40,059 in 2022 to US$24,292 in 2023.

Product specialists and researchers also experienced significant reductions, with average annual salaries declining from US$41,863 to US$35,266 and US$64,666 to US$53,163, respectively, in the same period.

A comeback for traditional offices?

While the reasons for this shift in businesses’ workforce strategy remain unclear, some have pointed to employers’ belief that working on-site fosters creativity among employees, innovation and, overall, desired “corporate behaviour.”

Such was the case in a recent study in Colombia, where respondents assured that a return to the office would enhance creativity in the workplace, a much-desired outcome in times of high disruption and fast-paced innovation in the market.

Some analysts have also pointed to rising cyberattacks as a possible factor. While there are services and solutions out there which enhance security in a home-office environment, service providers remain bound to the wishes of their clients.

It’s not uncommon for customers to pressure for an on-site operation to keep data breaches and hacks at a minimum. This is particularly true for highly regulated verticals, such as finance, healthcare and telecom.

There’s also the possibility that WFH regualtions have grown too heavy for companies to justify remote operations to the extent they did during COVID. Mexico, for example, implemented new WFH rules for businesses.

Employers now have to pay, among other things, part of their employees’ Internet service, provide computing equipment and even ergonomic chairs. Home-office inspections are also required. It’s been reported that some Mexican businesses have implemented RTO mandates to avoid the burden of the rules.

RTO mandates in Latin America won’t necessarily translate to a revival of the traditional office market, however. We’ve reported before on the rise of co-working spaces in office real estate. Many businesses came out of the pandemic working under a hybrid model, which allows for more flexibility in their workforce accomodations.

While traditional offices have yet to die, it’s difficult seeing them getting back to the pre-COVID status quo.