From Portside <[email protected]>
Subject “It’s a Bloodbath”: U.S. Companies are Pillaging Latin America's Tech Talent
Date January 25, 2022 1:05 AM
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[Experts estimate that the region will see 10 million new IT job
openings by 2025, driven by outsourcing and "nearshoring" by American
Tech companies. ] [[link removed]]

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Vittoria Elliott
January 20, 2022
rest of world
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_ Experts estimate that the region will see 10 million new IT job
openings by 2025, driven by outsourcing and "nearshoring" by American
Tech companies. _

, Meghan Dhaliwal/The Washington Post/Getty Images


It took Andrea Campos, the Mexico City–based founder of two-year-old
mental health app Yana, six long months to find a senior front-end
developer. After launching her app in the early days of the pandemic,
Yana’s usership ballooned from just a few thousand users in Mexico
to over 5 million
[[link removed]] across
twelve countries. Campos, who said her company has raised $2.5 million
in 2021 to scale the app and expand her team, was looking to bring on
someone with the experience and skills to guide projects. 

One month after his first day at Yana, the long-sought after developer
told Campos he was leaving. 

“An American company was offering him $15,000 per month to work for
them,” Campos told _Rest of World_. “We cannot compete with

Stories like Yana’s have become all too common across Latin America,
where, according to every source who spoke to _Rest of World_ and
compiled salary data, demand for tech talent is skyrocketing, but
supply remains relatively scarce, fueling fierce competition between
startups, established tech companies, and outsourcing giants for
qualified workers. While other regions across the world face similar
shortages, Latin America produces far fewer tech graduates than Asia.
Meanwhile, its proximity to the U.S. makes it a prime location for
outsourcing for American tech companies, increasing the value of
skilled workers to companies at home and abroad.

“Everyone knows it’s a bloodbath out there,” said Campos.

For tech workers like Joel, a Mexico-based developer working for an
established American tech giant, the world is their oyster. Joel asked
to be referred to only by his first name as he is not authorized to
speak on the record by his employer. “This is the best time to be a
developer,” he said. “We are basically like rockstars.”

Campos told _Rest of World _that more junior engineers were applying
for senior positions. “They know that they can because there is so
much competition for talent.”

For the Latin American startup ecosystem, 2021 was a landmark year, as
venture firms pumped up to $20 billion into the region — more
funding than ever before
[[link removed]].
Experts estimate that the region will see 10 million new IT job
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2025, driven both by local companies and the increasing demand from
offshoring organizations looking for cheaper talent in the same time
zones as U.S. companies — a practice called “nearshoring.” 

A recent Everis Digital Talent study
[[link removed]] revealed
that 55% of companies in Latin America said finding the right talent
was difficult. That includes Latin America’s most valuable tech
giant, MercadoLibre, which has also lost talent to outsourcing
agencies, like Globant, that service U.S. firms. Those agencies in
turn sell cheaper Latin American labor to foreign companies. 

“This is the best time to be a developer. We are basically like

Pablo, who is based in Argentina and asked that _Rest of World _not
name his employer, works for a similar outsourcing company, which now
contracts around 600 Latin Americans for Venmo. In 2019, when Pablo
started, there were only 10.

Tech workers often make well above the average salary in their
respective countries. In Argentina, they make more than five times
more than the average salary, according to data from Salary Explorer
and surveys from Latin American IT outsourcing company CodersLink. In
Mexico, it’s more than triple the average. However, the idea that
going into the tech sector could be a lucrative career move is still
relatively new. 

Universities and coding schools have not been able to keep up with the
demand for talent. CodersLink found
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the region produces only 739,000 IT graduates per year, as opposed to
the 7.3 million in Asia, making talent expensive. And even then,
schools may not provide the skillset startups need. Many universities
in Latin America focus on “systems engineering” or IT roles,
rather than more cutting-edge technologies, like machine learning.

“The basic career choices of being a doctor or a lawyer or a civil
engineer [are] still very dominant in Brazil,” said Arthur
Alvarenga, founder of the Brazilian startup Hubla. “Alongside that,
the schools and colleges are not necessarily doing a great job of
making the classes larger. It’s a structural issue for sure.” 

For those who do have the skills, the recent transitions in favor of
remote work have meant that high-paying U.S. tech companies are now
more willing to hire developers in Buenos Aires and Guadalajara.

English speakers from the region with solid internet connections are
less interested in smaller, local startups, said Luis Arbulú, a
partner at the firm Salkantay Ventures, which invests in Latin
American startups. He says that, instead, “they’re looking at
working for Salesforce or working for Stripe,” both U.S. companies
with valuations in the hundreds of billions.

That makes hiring particularly hard for local startups. To compete,
Hernan López Conde, co-founder of Argentine fintech startup
Digiventures, and his team have begun to recruit specifically
developers who lack English language fluency.

“No one will pay those [high] salaries to someone who is not
fluent,” he said. 

Like every entrepreneur who spoke to _Rest of World_, López Conde
said that he too had lost valuable talent to large companies that were
able to offer five times what he was able to pay. In Argentina, where
inflation has reached more than 50%
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the last 12 months, foreign companies can also lure workers by paying
in dollars or other foreign currencies, rather than the Argentine

“Compared to Google and outsourcing companies from the U.S., it’s
impossible to compete,” said Hubla’s Alvarenga. “But compared to
companies that are local, we do pay top of market.” Alvarenga
estimates that salaries for tech workers have risen 30% in the past
year alone.

Scarcity has pushed regional companies to start offering stock
options, a relatively new move in the region. But taking a job for
equity, said Pablo, requires workers to believe in the company’s
potential for long-term success. “Most people don’t believe in the
company; they believe in the pay.”

"Most people don’t believe in the company; they believe in the pay."

Mathias Caramutti, founder of the Argentine startup Celeri, has
focused on hiring more-junior developers, and developing their skills

“When you have a younger startup or a smaller team, you need to hire
generalists,” he said. “We tell candidates, ‘We don’t need you
to know a lot about technical stuff, but you need to be willing to
learn, be willing to take ownership of problems, and to be able to
push it forward.’” 

Arbulú, the venture capitalist, says that Latin American startups can
also leverage the same remote work policies that have allowed U.S.
companies to snap up local talent. By recruiting workers from smaller
cities in their own countries or neighboring markets not yet
experiencing their own tech booms, startups may be able to avoid the
same kind of stiff competition and inflated salaries.

El Salvador’s Hugo app hires talent in Honduras, while Mexico-based
Yana worked with a developer in Bolivia
[[link removed]] to build the
initial version of the app that launched in 2020. 

And for companies just starting out, Arbulú told _Rest of
World_ that hiring the most advanced technical talent may not be key
— at least not right away. “This is particular to Latin America or
other emerging markets, but sometimes the need is so big and the
incumbents are so poor that you just need to make something marginally
better, but that’s not really high tech,” he said. 

This is true of Caramutti’s company, Celeri, which is less a fintech
company than a “regulatory tech” company. 

“Financial companies outsource operational problems to us, and we
solve them,” he said. “So we don’t really have a particular need
for a cutting-edge machine-learning specialist or anything like that.
We need people who can understand the business and solve their

But as companies scale, the need for higher-skilled tech talent
becomes more critical. After three months of searching, Yana finally
hired another new senior front-end developer. 

“Most [developers] see their path with startups as just another step
in their career in order to get to Google or Facebook,” said Campos.
“If someone is very money-driven, there’s nothing we can do.”

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