:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/5QCLB7BTFZHK7MNT6QAEEFUTFY.jpg "Un sistema de atención a la infancia débil ha provocado una brecha de género en la mano de obra durante décadas. La pandemia la ha exacerbado. Fotógrafo: Stefan Wermuth/Bloomberg")
São Paulo — Before the pandemic, talent was located mainly where companies were. Now, companies are going to where talent is located. And that doesn’t mean opening an office close to a university campus, but simply hiring the best talent they can find wherever the talent is.
(Bloomberg Línea will explore the new avenues for Latinx to get new IT jobs, mostly working from their hometown. So, probably no relocation and maybe not many perks, but with the added value of competitive salaries to spend locally. Wait for parts 2 and 3 later this week.)
Brazilian Daniane Gomes started programming when she was 16 years old, back in 2003. She had gotten a job as a secretary/operator in an IT company and had a lot of spare time. “I was curious about what they did. I started researching HTML, took the initiative to make small improvements to their website, and then they asked if I wanted to try to be a programmer, as they needed more people. I accepted the challenge and here I am, 18 years later.”
She currently lives in the Netherlands and works for a company in Switzerland. “In my circle, the people I see working remotely earning in foreign currency are the ones with the most experience. What I see is that those who are starting have a little more difficulty finding opportunities, whether in person or remotely. Of course, everyone has their story and I’m not saying that this is the rule or that it’s impossible.”
See below the average salary data for junior and senior developers in LatAm cities, such as Buenos Aires, Mexico City, Sao Paulo, and Bogota, according to Glassdoor. The average salaries are for job titles with at least 37 salaries for each role as of at least February 23, 2022.
Gomes says that for professional IT people, competition is great, as they have options to choose from good salaries and good working conditions, which is not always the case in other areas. “We are in a very privileged moment,” she says.
This privilege may include for them to dictate how working is going to be. At a time when talent is a battlefield, companies can’t have the luxury of taking risks and losing them to a foreign company. Bloomberg Línea has learned that a startup that was supposed to implement hybrid work this year in Brazil stepped back, as the potential staff showed signs they were going to leave the company if it was mandatory for them to be in São Paulo.
A survey by LinkedIn shows that there was a 273.59% increase in the migration of Brazilian professionals to the U.S. between May 2020 and April 2021, compared to the previous year. After the US, Australia appeared with a growth of 252.96% in the same period.
Of the top 10 destinations for jobs for LatAm’s largest country, six are in Europe, two in North America, one in Oceania, and one in Latin America. LinkedIn’s survey considers a migration when a user changes the location on their LinkedIn profile, which could mean a physical move and/or a remote job.
This analysis calculates the input-output ratio (number of inputs to Brazil for each output). These countries are then ranked from biggest increase to biggest decline, based on the percentage change in the ratio of inflows to outflows between May 2020 and April 2021 compared to the same period a year ago.
According to LinkedIn, these are the top labor destinations for Brazilian professionals:
- United States (+273.59%)
- Australia (+252.96%)
- Germany (+194.43%)
- Spain (+188.01%)
- Canada (+177.58%)
- France (+162.59%)
- Argentina (+106.18%)
- United Kingdom (+98.60%)
- Ireland (+55.42%)
- Portugal (+42.78%)
Payments company Deel, which works with payroll, also says that the U.S. is the country that hires the most Brazilians. According to Deel’s data, that country represents 63% of companies that hire internationally, followed by the United Kingdom and Canada, respectively.
Alexander Torrenegra is a Colombian-American entrepreneur and investor. He is the founder and CEO of Torre, a remote company that has teams in Canada, Nicaragua, Guatemala, Colombia, Peru, Ecuador, Argentina, Uruguay, Chile, Kenya, Spain, Turkey, and Macedonia.
“With the pandemic, many companies that haven’t even considered working remotely, suddenly figured that they could do it. Also, people figured that they can work remotely and be more productive, spend more time with their loved ones, with their family, with friends,” he says, in an interview with Bloomberg Línea.
Companies like Torre understood that they didn’t have to limit themselves to hiring in the country where they are located and could hire people anywhere.
“The only physical limitation is: Is the person located in a time zone that I can interact with? And as a consequence for many companies in the US and even Western Europe, that happens to be Latin America,” Torrenegra said.
With the explosion of companies hiring in Latin America in the last two years, the region also had a salary boost. “They can earn not only in dollars but they can earn salaries that are significantly larger while working remotely. Because for many people in Latin America the option was to have a lower salary and having to commute to an office which, if you live in Sao Paulo, Bogota, it’s a crazy idea,” said Torre’s founder
Software is eating the world
Marc Andreessen, from a16z, recently published an article explaining why software is eating the world. “If you can have people developing software, you will find it would be easier for you as a company to grow and have an advantage over competitors,” explains Torrenegra.
What has been happening on the talent side in Latin America is that more people now are seeing that their friends have access to job opportunities that allow them to earn well, to work remotely, and in some cases to travel while they continue working.
No wonder, a LinkedIn survey pointed out that software engineers, data scientists, cybersecurity experts, and traffic managers are some of the most demanded positions in 2022. According to the latest data survey carried out by Deel, the most targeted professionals are software engineers; account executives; quality assurance engineers; product designers; and consultants.
Brazilian Daniel Koganas is based in Brazil but works as a developer for a Canadian company. With him, other Brazilians and an Argentine are part of the workforce. Even though he started the job during the pandemic, he says he already considered working for a company abroad well before Covid-19.
“In the technology area, the remote work model has been around for some time. But the pandemic has forced many companies to adopt this regime and many of them have seen that it works, so the offer of work from home has become more common. And that goes for the Brazilian market too because, in the absence of professionals in their cities, companies end up looking for professionals in other states.”
According to Koganas, in foreign markets there is a lot of demand for professionals from Brazil, especially the more experienced ones. Like Gomes, he says it is difficult to find foreign opportunities for junior/full developers.
He says that in Brazil, there is also a lot of demand for more experienced professionals from enterprises, not just startups. “However, at the moment it seems that there is a lack of professionals to fill this demand. That’s why many companies are investing heavily in training aspiring professionals, which I believe is the correct path -- or even one of the few paths these companies have to solve the gap.”
India got there first
A movement similar to what happened to Indians before, Brazilians started to appear as qualified and cheap professionals for foreign companies. “Both sides win, as the purchasing power received in dollars or euros is much greater, at least for those who continue to live in Brazil”, adds Koganas.
“Anywhere in the world, the demand for IT professionals grows, not only in Brazil. So I don’t see that this is exclusively linked to foreign currency, but because it is a heated market and needs professionals,” says the developer, who gave mentorship for beginners. “Some say we’re living in a tech bubble, but if that’s really happening, I don’t see that bubble bursting anytime soon. I think a bubble would only occur if they can get the A.I. advance enough to perform programming tasks and reduce the demand for programmers. But until that future arrives, I believe it will still take time.”
According to Torrenegra, this scenario is finally getting people to visualize it as a really cool career opportunity. “Now, Latinx want to be where the cool kids are. And if before ‘system engineer’ was not seen as the coolest profession, now software engineer is the cool job.”
Latin America used to have companies that work as intermediaries, hiring developers and then reselling their work to other companies in the U.S. Now, companies are hiring directly, as remote work dismisses the need for intermediaries.
“People have a lot of job opportunities and companies have a lot of candidates globally. That means the matching challenges are much higher than when you look for jobs in a given city or when you’re looking for talent in a given city,” says Torrenegra.
Normally, software developers could count job opportunities in their cities with their fingers on one hand. But looking at remote work, every day there are a thousand more job opportunities, and thousands of people coming to the market. Torre is in charge of matching automation, working as a job marketplace.
“We don’t match the person with the job, but with the team that they will be working with. There are more than 100 different factors that change what might be good for you as a candidate to what might be good for you as a company. That’s why we are growing so well this year,” he says.
Torre matches people in more than 180 countries, with jobs in more than 50 countries. Most of its user base is in the Americas, where it is connecting talent with opportunities in the U.S, but also in Latin America as well.
As the region hit records of venture capital last year, tech companies also need to hire talent. “Companies like Nubank are offering the same salaries that a company based in Silicon Valley offers. You have Mercado Libre competing with great salaries, etc. So the competition is global now.”
Pressure on local companies pushes inequality of wages in LatAm
That scenario puts pressure on the local companies that used to hire local developers to develop local products only because it is now hard for them to compete with salary.
Gomes says that as the Brazilian real is undervalued, Brazilian companies are finding it difficult to compete only on payment. “But there are also foreign companies that offer very low prices, which does not pay off for the professional. It’s no use receiving in hard currency and receiving less and without CLT [Consolidation of Labor Laws, an instrument that institutes rules and benefits that regulate work in Brazil], benefits from paid vacations, FGTS [a special fund for Brazilian workers that have CLT], health insurance, etc.”
In situations where the values are similar, Gomes believes that to compete, Brazilian companies will need to offer differentiated benefits such as reduced weekly hours (as is already the case in some IT companies), time off and flexible vacations to be used as the worker prefers and not just the scheme of 2 or 3 periods per year.
“They will also need to offer interesting projects, with more modern technologies and not just maintenance on the famous ERPs written in the 90s,” she added.
Willame Figueredo is a project manager at an IT consultancy, where he works in a team within one of the largest cosmetics companies in Latin America. Days ago, he said he lost two Brazilian developers for North American companies within months.
“The market is experiencing a moment where companies are fighting over talent, where not only is the salary high and remote work are differentials, but also several attractive benefits for those who know the company. And this is all good for the employee, who is constantly approached by tech recruiters and can choose where to stay,” he says.
He says the company that he works for has competitive salaries and benefits for the Brazilian market and already had a remote work policy even before the pandemic. “This was never new to us, on the contrary, it was already an attraction. However, the devaluation of the real allows companies in the United States, Canada, and Europe to be able to offer extremely attractive salaries to South Americans.”
Figueredo points out that in the United States, a salary of $85,000 a year is considered a low-middling wage for a US resident, but a paycheck higher than a Brazilian senator’s salary for a developer living in Brazil.
Figueredo is one of the Brazilians that joined the IT market seeking a better wage and job conditions. Five years ago, he started studying and taking courses in management, processes, and business in the area. Before, he says he earned $290 a month in a Customer Service company, where he led teams of 40 people, working weekends and holidays.
“Today I can have dignity with a much better salary, fair working hours, and benefits unimaginable for me in 2017. This also happens with devs, it is super common to meet people who started programming less than one year ago, that are already working in robust development teams. The market has many more vacancies than people can fill. It’s not easy, but it’s still much easier than submitting to the reality of our country’s jobs.”
“We believe that most of the value of labor is going to be exchanged by remote workers. Not most of the jobs, but most of the salaries paid to employees is going to be paid to remote workers,” complements Torrenegra.
He believes the job market will see two trends: On one side, an homogenization of salaries at a global level, on the other side, a difference between the rich and the poor at the local level. That means local workers that earn very little and remote workers that earn a lot of money will live next to each other. “The social consequences of both are very difficult to predict but it’s going to happen.”
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