Nearshore Americas

How US IT Giants Found Success in Latin America

There are many U.S. tech companies operating in Latin America. Some of them have made a name for themselves in the local private sector as among the most popular employers in the country. Dell in Panama, Amazon in Costa Rica, Google in Mexico, IBM in Brazil and Oracle in Argentina are just a few that, in total, employ over 15,000 professionals in total throughout their regional facilities. The large majority of those employees are local people thanks to the availability of talent in terms of skills and knowledge, even for technical roles. English-speaking skills are no barrier either, while the region’s price-point against the United States is clear.

But let’s dig a little bit deeper. IT operations in U.S. companies here are commonly intended to serve international customers and providers mainly located in North America and Europe. Due to this, the time difference between these locations is a common question from clients when showing interest in entering a Latin American market. While the time difference changes by city, none are ever more than three hours from times in the mainland U.S.

Some Latin American countries are in the top 25% for broadband speeds in the world.

Internet connectivity is another common question. According to the Speed Test Global Index, some Latin American countries are in the top 25% for broadband speeds in the world. At a time when digitalization and work from home schemes are vital, this should not be looked at as a minor fact. Furthermore, internet users are near 350 million now throughout the 32 Latin American countries,  meaning internet penetration is more than 50% of the population. This translates to a perfectly suitable place to outsource business functions.

The Vital Role of Talent Acquisition

When thinking about success in Latin America, how can we learn from other companies? As private consultants at ManpowerGroup, we have seen business ventures fail dramatically not due to financial factors so much as a lack of a deep evaluation on key areas like human resources. Five years ago, a former client of mine was willing to engage more than 150 senior software developers with backgrounds in coding and system languages but he couldn’t find that level of specialization locally and had to bring talent from abroad. This increased the project’s costs and skill requirements were still not completely filled.

Corporate responsibility is another fundamental aspect of brand reputation in Latin America and it is not uncommon to see tech giants developing campaigns connected to sustainable development projects.

The difference between success and failure depends on HR when evaluating one location or another, reviewing the talent pool for the roles to be filled and considering the benefits and salaries that may be required to bring talent onboard. Added to this is the need to give personnel a higher purpose outside of salary; the ability to contribute. A company must be highly competitive because the tech industry evolves at a pace.

Why the Workplace Matters

In that sense, to American IT giants that have found success in Latin America, building a good reputation is critical; a strong employer brand attracts high-quality talent. Employees who experience their workplace as an enjoyable environment to work in will tell others, and that enhances a company’s reputation further. Many U.S. employers in Latin America have proven to be great companies to work for. Corporate responsibility is another fundamental aspect of brand reputation in Latin America and it is not uncommon to see tech giants developing campaigns connected with sustainable development projects.

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The pandemic has increased inequality, leading to the closure of companies and a great deal of job uncertainty. But according to a survey named “What Workers Want”, IT employees are the only group of professionals that is not worried about keeping their jobs because they have the skills in the highest demand in the labor market right now. But this is more complex for Latin America when you consider that before the pandemic there was already a shortage of talent. Finding a solution to these competing realities will generate an opportunity for large back-office support operations here.

Ariel Ayala

Ariel Ayala is the business development manager for Mexico, Central America and the Caribbean at the ManpowerGroup, a position he has held for the past eight years. He has been an active member of Panama’s Chamber of Commerce since 2018, and a strategic partner for its Center of Economic Research. You can contact Ariel here.

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