U.S. companies look to Latin America for new hires as remote work revolution rages

As American workers continue to leave hubs like New York and San Francisco in the wake of the pandemic, U.S. companies are shifting their search for new hires to Latin America, where similar time zones and lower salary requirements have made the region’s work force an attractive prospect.

According to a new report from Bloomberg, Brazil has become increasingly more appealing to U.S. companies looking for new hires.

Because the nation’s currency has lost more than a quarter of its value since the start of the pandemic, dollar-based American contracts are becoming more and more attractive to Brazilian talent.

Similar talent pools are blossoming in countries like Colombia and Argentina, where currencies have suffered over the last two years.

Alexandre Rocco started working for San Francisco-based startup Walrus Health after receiving a message from Brazilian headhunter Revelo in May of last year.

Although he understands that he’s likely paid less than a U.S. hire would be, Rocco believes he made the right move as his pay increased by approximately 40% after switching jobs.

But the 41-year-old engineer from Sao Paulo isn’t the only one who stands to benefit from the increase in cross-border hiring.

Walrus Health is also benefitting from hiring Rocco at a time when U.S. businesses are being forced to raise wages in light of an unprecedented rise in inflation and consumer prices.

Walrus CEO Kimball Thomas, who previously lived in Brazil, understands that working in Brazil comes hand in hand with a bureaucratic nightmare or two, but believes it’s worth it as “salaries are dramatically lower there.”

Since the start of the pandemic, Thomas has hired several Brazil-based programmers, who now make up half of his development team.

“This is not an ad hoc solution,” he said. “We really want it to work long term, and we want to invest in it.”

Walrus isn’t alone in exploring alternative hiring practices, however, and finding talent outside of U.S. borders could help the tech industry mitigate a looming worker shortage of at least 1.2 million tech workers by 2031, according to a report by consulting firm Korn Ferry. 

For this reason, the number of foreign companies hiring from Latin America has increased by 156% in recent months, according to a report by global hiring company Deel.

But it’s not just lower salaries that make Latin American workers so attractive. Cultural similarities coupled with a highly-educated talent pool gives employers confidence that their new hires will “connect right away” and “hit the ground running,” according to Pepe Villatoro, regional head of expansion at Deel.

The average tech salary fell by 1.1% across major U.S. hubs in 2021, marking the first decline in five years. The rest of the world, however, saw tech salaries increase by 6.2% -- opening the door for American competitors to grab the best talent at a lower cost.

“If I’m hiring a person in Cleveland, why not just hire a person in Bogota?” Josh Brenner, CEO of Hired, said in an interview. “They’re both remote, they’re both in the same time zone. And I can do that in a much more cost-efficient way right now.”