Remote-working is likely to worsen the tech talent shortage in Latin America, as there has been a sudden surge in the number of remote employees working for companies outside of their home country – and even beyond the region.
The work-from-home arrangement has not eased the talent shortage at all, confirms a study by venture capital firm Atlantico.
According to the report, 35% of people who lost their jobs following the outbreak of the pandemic have now taken a job outside of their country. In the survey, 29% of HR managers said that they lost their remote workers to foreign employers.
Around 16% of them said their former employees were currently working for companies outside Latin America.
The study also showed that hiring foreign remote workers is not new nor uncommon to Latin American companies. Almost 40% of respondents said they had hired employees from other countries within the region.
The talent shortage, combined with the remote-working trend, is however forcing employers to increase wages. Salaries in the tech sector have gone up an average of 20% in the region, according to the report. Across the region, the battle for IT talent in particular has been tough.
In Colombia, recruitment professionals described hiring as a “dog fight”, while in Costa Rica over 50% of companies surveyed by Manpower said they could not find suitable professionals. In Chile, recruitment professionals pointed the finger at an inadequate education system that does not produce quality tech professionals in decent numbers, while Mexico’s 130,000+ graduates that leave universities annually could not plug the gap in the US market. In Argentina, ongoing economic instabilities and the peso’s severe weakness means that IT professionals often look outside of the country for well-paid work.
However, Atlantico’s study found that there are fewer options for Latin American businesses to cut wages for their tech workers. This is because talent remains clustered in the largest population centers, such as Sao Paulo in Brazil and Mexico City, Mexico, where the living cost is comparatively high.
Though telecoms infrastructure has seen an advance in many non-urban areas of the region, wholly reliable, fast speed internet that is a vital aspect of the Nearshore workspace, is lacking.
That said, more workers in the region are working remotely than ever before. Prior to the pandemic, barely 7% of Latin American employees worked remotely. Now that figure has increased to 33%.
Business owners across the region are of a firm belief that remote work is “here to stay” because they say remote-working is not harming their business operations.