Recruitment Guide for the Latin America
PurposeThis guide aims to ensure that the company goes through the correct recruitment process, ensuring that the company will understand all the things to consider when hiring in Latin America. This guide will serve as a how-to guide for the recruitment procedure in Latin America.
Latin America is commonly considered to include the entire continent of South America, Mexico, Central America, and the Caribbean islands, whose inhabitants speak a Romance language.
Things to Know before Hiring in the Latin America’s Countries
Employment Contracts and SalarysMost Latin American staff are paid monthly, not biweekly, and it might be difficult to pay employees retroactively. Furthermore, most countries require employers to pay a 13th-month bonus, with Ecuador, Guatemala, Honduras, and Peru demanding a 14th-month incentive. Each country’s law specifies when the compensation must be paid, and it must be prorated if the employee leaves the company in the middle of the year. In most nations, the bonus is equal to one month’s pay, but in Argentina, it must be similar to the highest monthly wage earned in the previous six months. In Bolivia, the bonus must be twice if the GDP exceeds a particular threshold. Different systems are permitted in some countries as part of collective bargaining agreements. You must be very careful when establishing employment contracts to specify the annual compensation, a monthly wage, and 13th and 14th-month bonus amounts; otherwise, you may find yourself on the hook for extra money.
Vacation LeaveIn Latin America, the maximum number of paid holidays allowed by law for employees is 30 days per year. Brazil, Cuba, Panama, Peru, and Nicaragua are the only countries that guarantee this length of annual paid leave. On the other end of the spectrum are the Caribbean nations of Saint Vincent and the Grenadines and Trinidad and Tobago. Their legal systems do not require employees to take a minimum number of paid holidays. Employees in Mexico were only entitled to a minimum of six paid holidays each year.
Considerations for Hiring Employees in Latin AmericaExcept for Brazil, where Portuguese is the primary language, almost all Latin American countries speak Spanish. Furthermore, the bulk of Latin American countries ranks poorly in terms of English competence, according to an EF survey. Since 2017, the average English proficiency of adults has been dropping. Because you will need to hire a local workforce to expand your business, working with HR specialists who can successfully communicate and connect with your employees is vital. An International PEO can help you in this aspect because we prepare job offers in the target language, conduct interviews, and even manage the onboarding process.
1. Workplace Culture
3. Language and Culture Barriers
4. Local Regulations and Labor Laws
How to Hire Employees in Latin America Without Using a Local Company
1. Identify a Local Business Partner
2. Get Help With Recruitment
3. Latin America Cities That Offer Better Talents
If you want to expand your business in Latin America and hire top foreign talent, don’t assume that all countries are created equal. Because of culture, greater education levels, and business and growth attitudes, some LATAM locations are better for startups than others.
For example, in Santiago, Chile, foreign investors establish more than one-fifth of all new enterprises, implying that locals are not only multilingual but also accustomed to operating under diverse briefs and organizational structures. Brazil, on the other hand, is home to the Startup Brazil accelerator, which has generated a fabulous pool of entrepreneurial potential in locations like the following:
They are another excellent example since they are not only the wealthiest city in the country but also one of the best places to do business in Latin America, with its technology industry developing three times faster than the global average.
4. Do Not Overlook Human Resources
5. Local Laws and Regulations
6. Get Help from EOR Organization
Benefits of Hiring in Latin America Through EOROther advantages of engaging an EOR, in addition to saving your firm time and workforce, include:
Hiring employees through an EOR lowers administrative and recruitment costs and saves you money if you want to hire local employees but do not have substantial activities to warrant company incorporation or branch formation.
A reputable EOR will have a well-established recruitment staff that is well-versed in the local market and can swiftly discover the most suitable and qualified employees for your firm.
Because of their experience and knowledge of the local market, EORs will ensure that you fully comply with all of the country’s labor laws and regulations.
Benefits of Not Having a Local Company When Hiring in Latin America
The EOR is responsible for carrying out the legal and regulatory obligations of immigration, employment, and payroll but is not involved in day-to-day labor activities.
In essence, the EOR is the worker’s registered employer but has no supervisory or managerial responsibilities regarding the employee’s position. The original employer maintains the substantive work relationship and makes all decisions regarding remuneration, position tasks, projects, and termination.
The employer of record, in particular, is the legal entity that: