If you run a business, you’re constantly seeking ways to optimize your workforce while keeping costs in check. Turns out, one intriguing solution that's gaining traction is hiring talent from Latin America (LatAm). From 2022 to 2023, U.S. companies have boosted hiring in Latin America by 50%, and the figure will likely keep climbing.

But what exactly makes hiring in LatAm so financially attractive for thousands of U.S. companies to jump on the bandwagon? 

In this blog post, we’ll explore the costs and benefits of hiring from LatAm compared to the U.S., diving into how this strategic move can help your business access top-tier talent while significantly reducing labor expenses. 

Wider market trends in LatAm and US

Businesses in the U.S. face a dilemma: demand for higher salaries continues to increase while economic uncertainty looms. 

The call for more pay is partly driven by post-pandemic inflation and higher costs of living, but with the lingering threat of a recession, businesses are trying to be proactive and cut down on operating costs.

Unfortunately, especially in the tech industry, this means making the tough decision to conduct layoffs. 

Still, there’s another avenue more and more businesses are using: exploring more cost-effective labor markets to sustain their operations without compromising on quality talent.

One of these labor markets is Latin America. 

LatAm has a growing pool of skilled remote workers, especially in fields like design, digital marketing, software engineering, data analysis,, accounting, and human resources. In just the last three years, the amount of remote workers in Latin America has increased from 3% to 30%, with an estimated 20 million remote employees and counting. 

This growth is fueled by Latin America’s increasing digitization and a concentrated effort from workers to gain advanced training, certifications, and skills. 

How Hiring Costs Compare: LatAm vs US

Now, let's dive into why setting your sights on Latin America might be a strategic win from a cost perspective.

Wage Differences

The gap in wages between LatAm and the US is significant and impossible to ignore. For example, the annual salary range for a customer support analyst in the United States is $58,000 - $93,000, according to Glassdoor. Meanwhile, in Latin America, it’s $9,600 - 30,000, a savings of up to 84%. 

For a content manager role in Marketing, the average salary range is $70,000-$126,000, but in LatAm, you’ll pay between $24,600 - $30,000.

Even when hiring for a tech role, such as a mobile developer, you can expect to save almost 50% on payroll costs—$84,000 vs $161,300.

Benefits and Taxes

Beyond the paycheck, the average cost of benefits for U.S. private sector employers is $12.77 per hour, which comes out to about 29.6% of employer costs. In LatAm, the figures vary from country to country—in Mexico, the cost of benefits usually sits in the 25-35% range, but in Chile it’s around 5%.

Recruitment Expenses

Recruiting in the US can be a pricey affair with high competition driving up salaries and recruitment fees. In LatAm, you might find that hiring costs, including agency fees, advertising, or even job boards are much more manageable. 

The average cost-per-click for job ads on Indeed are notably lower in countries like Mexico ($0.10) compared to the U.S ($0.25-$1.50).​

Training and Development

Investing in employee development is crucial, and here LatAm also offers advantages. Many LatAm countries have burgeoning educational systems with a strong focus on tech and bilingual education.

Countries like Costa Rica have become strong tech hubs, attracting high-tech companies and fostering a tech-savvy workforce. The local talent pools are often ready to tackle complex projects without needing a ton of preliminary training, thanks to strong local educational programs in tech and engineering from top universities​.

Plus, continuous development can be handled through cost-effective online platforms, which are readily used and highly effective in these regions.

The additional benefits of Hiring in LatAm Compared to the US

While the most straightforward benefit is cost, there are a few other perks you get when you choose to hire down south.

Close cultural ties

There's a strong cultural affinity between many LatAm countries and the US, mostly because of proximity and historical ties. This usually means smoother collaboration and communication between cross-country teams. 

Plus, with many people in LatAm being bilingual, language barriers are often lower. This makes integrating into predominantly English-speaking businesses much smoother.

Time zone compatibility

One of the most underrated benefits of hiring in LatAm is the time zones. Unlike teams in Asia, Europe, or Africa, LatAm workers operate in time zones that are either the same or within two to three hours of US time zones. This makes daily operations, real-time collaboration, and communication more efficient and less prone to delays.

Economic partnerships

Several LatAm countries have trade agreements and partnerships with the US, which can simplify business operations and reduce annoying bureaucratic overhead for US companies looking to hire in the region. 

These agreements often include provisions that make cross-border collaboration more straightforward, such as simplified tax regulations and easier visa processes for business-related travel.

Flexibility and scalability

The growing trend of remote work has made it easier than ever to integrate LatAm professionals into US-based teams. Having more flexibility allows US companies to scale up (or down) quickly as business needs change, without the commitment of large, permanent offices or the high costs associated with some US locations.

What is the best way to hire in Latin America?

While you can jumpstart your Latin American hiring journey using job portals, remote work platforms, or even social media, Embarca gives you a much simpler way to get the best talent in the least amount of time.

We navigate the complexities of international hiring in Latin America for you so you can focus on growing your business. Our focus is on finding candidates who not only have the skills your business requires, but also professionals that mesh well with your company culture. 

Whether you’re looking for developers, marketers, accounting personnel, or customer support, Embarca connects you with Latin American professionals that speak your language, work within your time zone, and understand your business needs.

If you’re ready to learn more, schedule a quick call with us or share your contact information here.