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Uruguay Thinks Creatively About Redistribution of IT Talent

The coronavirus pandemic has delivered a direct hit on a number of software services companies in Uruguay. Attempting to turn a negative experience into a positive outcome, leaders of the country’s IT ecosystem have devised a platform to transition newly unemployed workers into roles that are with companies having an immediate need.

Leonardo Loureiro, President of the Chamber of Uruguayan IT Companies (CUTI), spoke with Nearshore Americas about how the services industry is addressing the challenges brought on by the crisis by striving to be more efficient and opportunistic as the community of IT exporters has a window of opportunity to help in the redistribution of labor resources.

“There was definitely an impact on the IT industry in Uruguay, at different levels. As a chamber, we have 380 associated companies working in very different economic activities,” Loureiro said. “Even when some have seen their volumes increased, if we make a net calculation there has been a decrease in sales, which was clear in April and it is foreseen to continue in the following months,” he added.

Staying In-House

Despite the worldwide recession triggered by the coronavirus, Loureiro is confident that Uruguay will demonstrate its resilience in the months and years to come. Part of that strength stems from the country’s robust social protection system, which includes unemployment benefits, something that is not very common in Latin America.

Leonardo Loureiro, President at CUTI

Clearly, the last thing Uruguayan IT founders and leaders want to do is dismiss employees. Many of those professionals have been with their employers since the creation of the organization. In other words, firing workers is something they want to avoid at all costs.

Slowing demand for services has placed strain on IT shops, especially those with less than 100 people. CUTI’s leadership recognized the debilitating impacts of the crisis and started to devise a system to transfer soon-to-be-unemployed workers into new roles at peer IT organizations.

“As a chamber, we are very used to work as an ecosystem in Uruguay. We are promoting that those companies that are experiencing low activity and have unoccupied human resources can outsource them to companies that have an increased activity because of the crisis,” Loureiro explained.

“This way, companies don’t have to hire or fire talent. This works as a provisional subcontracting while the affected company has unoccupied workers. We already used this system in 2002, when there was an internal crisis in Uruguay, and in the 2008 global recession,” he added.

Uruguay doesn’t have a remote work law yet, an issue that the country’s Parliament and CUTI are trying to fix, as COVID-19 pushed people to work from home, whether they were ready to or not.

Loureiro says that Uruguay has become increasingly aware in recent years of a talent shortage in export knowledge services and keeping professionals within organizations has been a priority.

Beyond using CUTI’s subcontracting system, IT businesses that experience a reduction in the volume are making the most of this additional time to resume unfinished projects, develop new software, or deliver additional training.

In an update, Federico Garcia, Global Markets Executive at CUTI explained: ” This platform to relocate IT professionals has been working for a little bit more than a month. We don’t have clear measurements on its results,  as the companies are able to contact their counterparts directly.” Efforts are underway to raise awareness of member organizations.

Calling for a Remote Work Law

Uruguay doesn’t have a remote work law yet, an issue that the country’s Parliament and CUTI are trying to fix, as COVID-19 pushed people to work from home, whether they were ready to or not.

“Work-from-home was enabled formally by the government because of the health emergency, to avoid legal contingencies,” said Loureiro.

Uruguay’s government enabled remote work via a decree in mid-March. However, there is now a bill in Congress being discussed, which has taken on a new urgency. This is one of the many challenges that country’s new administration has had to face, coming just days after the new president’s inauguration. President Luis Lacalle and his cabinet took office on March 1st, and the health emergency was declared just 13 days later.

The IT industry’s experience with remote work has served as a model for other industries, many of which are completely new to the process.

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“Just three days after the declaration of emergency, nearly 95% of IT workers were successfully operating remotely,” Loureiro said, adding that now that figure is very close to 100%.

He attributes the ease for remote work in Uruguay to reliable infrastructure, particularly high-speed internet access.

“Uruguay is one of the few countries in Latin America that has access to fiber-optic to homes for several years now. Our whole telecommunications infrastructure was improved recently, especially in Montevideo and the other main cities,” Loureiro said.

Despite recognizing that Uruguay’s IT industry has been hit by COVID-19, Loureiro remains cautiously optimistic about the future.

“On the domestic side of our industry, we benefit from the fact that Uruguay didn’t go through a mandatory quarantine, so the economy is already in the process of reactivation,” Loureiro said.

The uncertainty comes mainly from the international market. As 70% of the country’s IT exports go to the US, the future of the American economy will be essential in the path to recovery of Uruguay’s IT providers.

Diego Pérez-Damasco

Diego Pérez-Damasco is a writer and managing editor at Nearshore Americas. He has more than six years of experience covering politics and business in Latin America. He has been published in media outlets throughout the Americas and holds an MA in International Journalism from the University of Sussex, United Kingdom. Diego is based in Costa Rica.

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