Why you should want to Hire in Latam

Remote work is as popular and available as ever, and in being able to hire remotely gives companies access to otherwise unreachable talent pools. This means more options to choose and pick the right talent strategy for your company. LatAm's main advantage is sharing timezones with the US, which is usually what makes it to hard to collaborate with Europe or other outsourcing countries like India.

Moreover, LatAm is more closely aligned culturally with the US than other regions, while keeping compensation expectations lower.

Companies that hire remotely have budgetary and quality advantages over the ones that don't which means that you need to consider this option to be and remain competitive.

Why you should NOT Hire in LatAm

If your only motivation to hire in LatAm is to replace expensive US engineers with cheap talent, you are in for a tough time. The reality is that you get what you pay for - and cheap talent is cheap for a reason.

Hiring in LatAm is first of all cheaper for companies because normally you don't need to pay healthcare, payroll taxes and usually talent does not demand high equity compensation, as it is more cash oriented. But the landscape is competitive, and companies that can get great value from great talent can pay US salaries and above for remote talent.

That said, different companies have different engineering and organizational needs, and having a wide range of salaries and respective talents means companies don't need to hire top talent for not-top engineering challenges.

Furthermore, remote work is not for every company at any stage. We follow the YC guideline that very early companies need to think about their founding engineering team, and usually it is better to be in-person and pick very judiciously. You can easily miss the forest for the trees!

Hiring in Latam: The Easy Parts

Payroll

If this is your first time hiring in LatAm, there are a few problems that have easy solutions. Hiring is mostly done through EOR/Payroll solutions like Deel.com, OnTop, OysterHR or RootsEOR. These services offer managing contracts and payroll for 30~50$/month, and talent is used to using this.

Hardware

Getting devices for talent is easy with services like quipteams.com. Vendors can take payments in the US and deliver hardware physically quickly in the countries they operate in.

Attrition & Employee Satisfaction

LatAm Engineers are cash-compensation driven, and will generally not value or care about company benefits besides their cash-value. Remote Engineers can hire their own services and healthcare without much hassle, and often it is tax advantaged to do so. Because the talent market is not nearly as competitive as the US, attrition rates are also much lower, leading to longer and more productive working relationships without needing sophisticated HR teams to manage employee happiness.

Hiring in Latam: The Hard Parts

Work Culture

This is a topic I've published a podcast about. The American work Culture of results-based, mission-driven work environment is not for everyone, in contrast to the European work-culture of Work-Life-Balance. The LatAm culture is split in half in this regard, with one having the American work culture and the other one a more European one. Series B+ companies might have place for WLB talent, but seed/Series A startups usually don't.

This is often revealed in the interview process when candidates ask for PTO and Work Life Balance, but if its not made explicit you can easily get the type that won't fit your company.

English Penalty

It is unavoidable that remote talent will have lower English communication skills. It is already priced in. However it is also hard to gauge how permissive or harsh you need to be. We recommend you make sure to ask difficult cultural or technical questions to test the limits of the candidates fluency and vocabulary.

Beware that talent is often used to working in english speaking environments that do not present hard communicational challenges, so the person that looks good on the surface may have serious issues when under pressure or when needing to present complex subjects.

Cultural differences

No matter how familiar of American culture a candidate can be, candidates do not have a strong feeling for nuanced cultural topics. This means they have difficulties understanding or relating to products the way Americans would do it. For example, an Argentine does not experience healthcare the way a US resident does. This does not stop in product appreciation - it is part of the communication style and what they consider ethically correct or appropiate. This is part of the reason why talent that has lived in the US, no matter how brief, carry a strong premium.

Adapting to the LatAm market

Technical Interviewing

Remote LatAm talent is not used to live coding exercises, and they get extra pressure because of the difficulty to communicate in a non-native tongue while doing them. We still recommend you run live coding interviews because they are the best tool for talent evaluation, but take this into consideration.

Regional and local companies almost never run leetcode style interviews, so talent is unprepared by the market to face these kind of challenges. We recommend you pick realistic problems where they have to show practical skills as well as mastery of their main stack.

Resume Review

It is hard for a remote LatAm resume to stand out. Most companies do not have a brand in the US, so there is almost no pedigree. In fact, because the market has so much dispersion, some of the best company names actually have some of the lowest hiring bars.

Do check the usual - tenures at startups, the capacity to deliver valuable projects and the tidyness of their writing and presentation. You just won't get the "Wow" factor you can with a US-based resume.

Price, Quality & Speed

You are going to face price dispersion - you will find engineers making 30k/year and 150k/year. And you are going to have different urgency requirements, sometimes you need talent fast and sometimes you can wait.

You should be mindful of the Iron Triangle of Recruiting - Price, Quality & Speed(to hire). Any leg of this triangle you want to improve will come at the expense of the other two.

Do not expect agencies to bring you talent instantly, because great talent is not waiting. Getting a good deal in a reasonable timeframe is the best value proposition, and any preference will have a cost.

How to compare Agencies

You are most likely going to hire remotely with agencies, unless you want to setup operations with regional recruiters or offices. There are so many agencies spamming your inbox that it can be overwhelming who to choose and how to select one.

Obviously, you can reach your network for referrals and recommendations, but here we can give you a few tips on how to decide on your own.

Portfolio Companies

The best predictor to match an agency is that their client portfolio is similar to you. This should be obvious; they already know how to find culturally and technically similar content. Agencies become efficient when they have similar searches where they can re-use candidates and pipelines. This increases their success rate and their operating margins at the same time.

Pricing & Contract Value

Choosing by price is obvious. Regional agencies often ask for an 8% fee (while US agencies ask for 20%). Most agencies work on purely contingency, but the more established ones will ask for upfront fees, monthly payments, or other pricing arrangements.

These conditions are meant to do one thing - make sure they are the only agency you work with. The reality is that in a purely contingency model, the additional recruiting agency you add cuts the contract value in half for agencies. So it is often better to give a 25% discount than to compete at full price with another agency.

If you plan on using a single agency, negotiate it. But we do recommend you try out more than one agency at a time, to find the one you want and to compare services.

Don't over contract agencies: 2~3 tops at a time

Some companies are tempted to hire as many agencies on contingency as possible, but this is a bad idea. First of all, they will all target the same candidates, and its not a good candidate experience to receive 3~5 reachouts from the same company.

Moreover, agencies quickly figure this out because candidates tell us, and its likely all agencies simultaneously will put you in their lowest priority list. After all, contract value was reduced by 80% or more.

Another reason to not do this is that you want to build a relationship with the agency - the more candidates you interview, the more they improve the pipeline for you. So if you only interview a few candidates per agency, none gets to be good at your company! You will also be overwhelmed in mantaining communications with many external firms, leading to bad experiences all-around.

One way to test multiple agencies elegantly, is to assign different roles to different agencies exclusively. This allows them to have the best contract value, while providing you with the capacity to see how each performs for each role.

Founder-led Agencies

If you are a founder, small agencies are your best bet because they are also run by founders. Most agencies are small businesses and they will be imbued with the values of the founder.

You can find commoditized agencies that just do the base work, but just like startups, the company values will seep into what kind of candidates they send you, how they do account management, and more. Great talent does not like big recruiting firms that heavily underpay and treat candidates like a factory.

Why pick Silver.dev?

We are experts in venture-backed startups with LatAm Talent, and almost half of our portfolio are YC Companies. We are a no-BS no frills company that will speak Founder-to-Founder.

I personally run Account Management and help companies raise their hiring bar by designing, improving and adding more technical and cultural evaluations.

Are you looking for talent in LatAm? Book directly with Gabriel Benmergui!

About the Author

Gabriel is the solo Founder of Silver.dev and an ex-Founding engineer at YC startups, a Staff Engineer at Robinhood and OpenSea, as well as founder of digital products and an angel investor in startups. Gabriel is an experienced interviewer and run interviewing processes at various companies, making him an experienced Engineer-Recruiter.