The technology sector is an ever-growing market that attracts investment, and is projected to grow by approximately 11% in Latin America by 2024, according to research and consulting firm IDC. This opens up possibilities for both new talent and companies looking to attract new talent into their ranks.
Among the advantages that make the region attractive for companies seeking talent is its proximity to the United States and similar time zones. This is reflected in a market that is transitioning from offshoring to nearshoring.
From 2000 to 2023, the number of technology-based companies in Latin America increased from 558 to 33,489, representing a 60-fold growth.
Thanks to this demand from technology companies, applications for some key positions in the industry, such as software developers, data engineers and AI/ML specialists, are expected to increase.
Local players incentivizing hiring
“The outlook is challenging but promising,” John Mendivelso, Slalom ‘s Director for Colombia, told Contxto. “Latin America is benefiting from the growing global demand for tech talent, especially with the rise of Allshore operating models, which allow companies to hire talent regardless of their geographic location.”
Among the advantages that attract the eyes of large companies to the region is the young and talented population, with many professionals trained in computer science, software engineering and other IT-related areas.
This is highlighted in the latest ‘State of Global Hiring Report 2024’ by Deel, which states that Generation Z is increasingly important for the labor market, registering an increase of 116 percent in hiring processes.
Additionally, competitive costs, multilingual professionals, as well as attractive tax incentives for North American companies, are key to attracting recruiters.
However, Mendivelso noted that there remain significant challenges. “One of the biggest challenges is the skills gap, as the pace of technological upgrades does not always match the training of local talent. In addition, the high demand for professionals with advanced English reduces the pool of available candidates.”
English skills gap
EF Education First recently published its EF English Proficiency Index, which revealed that Latin America continues to have the lowest proficiency levels in the language worldwide. For example, Colombia ranks 74th, among the lowest levels in the region.
“We know that Spanish de facto opens economic opportunities with other countries that share the language, but English opens more geographic doors, plus we know that Mexico is not only interested in exchanging with Latin American countries,” said Mendivelso.
Slalom has recently established a Global Technology Center in Colombia, with plans to employ 600 professionals by 2025. “Our goal is to combine local, national and global talent through our Allshore model,” Mendivelso explained. “This not only creates growth opportunities for Colombian professionals, but also contributes to raising industry standards in the country.”
According to projections by the Inter-American Development Bank (IDB) it is estimated that by 2025, 1.2 million software developers will be employed, generating sales of more than $18.5 billion in Latin America.
The study states that 31% of IT candidates consider that the most reliable option for job search are digital recruitment platforms. Followed by those who prefer job portals (22%). In addition, 21% of IT professionals changed companies in the last year, and the average length of employment was about 1.3 years.
Slalom takes an inclusive approach to addressing inequality in access to education. “We offer technical and soft skills training programs, mentoring and coaching,” Mendivelso explained. “We also collaborate with educational institutions and nonprofit organizations to identify talent in disadvantaged communities.”
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