You lead a software development department in an organization, or you are responsible for hiring software developers and need help finding the right talent in the US market. Even with enough budget, you cannot find the right talent.
After the pandemic, your company has worked remotely, and you have concluded that you want to hire in South America, where you can find talent that will lower cost but will be well paid locally. You have seen that other companies are doing it successfully.
You conclude that South America has many nearshore benefits that will allow you to work with a remote developer instead of hiring in India and Pakistan, where you can save more costs. Still, managing communication, cultures, and schedules can take a lot of work.
Some Questions arises:
- How do I get started?
- How do I find good developers?
- How do we make payments?
- How do we deal with devices and cyber security?
- How do we make sure we stay legally compliant?
- How do I know someone is getting paid well?
All these are valid questions and should be answered before onboarding team members from South America.
Here at BetterWay Devs, we have extensive experience connecting US firms with developers in South America, especially Colombia. We will explain different things to keep in mind so that you can make better hires, with us, directly or with a 3rd party staff augmentation firm.
The first thing to remember is that assuming you are not going through the hassle and expenses of opening an international branch in the country you want to hire, you have three main ways of hiring full-time developers. These methods include; -
- Directly without intermediaries.
- Through a staff augmentation firm.
- Through nearshore marketplace.
No matter the method that you use, to hire the best talent keep a focus on salaries and benefits.
Table of Content:
Hiring methods
- Hiring directly without intermediaries
- Hiring through a staff augmentation firm
- Hiring through an intermediary nearshore marketplace
Other things to have in mind when hiring
The main advantage of hiring someone directly is the value of creating a relationship without intermediaries. This method creates trust and a better work environment. You can also use all your budget on your developer salary without intermediaries, usually helping to achieve an excellent standard of living in South America.
The biggest challenge to solve is recruiting, not knowing the market; the two best platforms we recommend for recruiting directly are LinkedIn and Torre.co.
Be very specific in the job description about the expected level of English required. I will talk more about this later in the article.
An alternative to recruiting is hiring local recruiting agencies and pay a success fee for candidates, we recommend using a clutch to search for recruiters.
The second thing you need to solve when hiring directly is payroll, compliance and benefits. Since you are hiring for the long-term, you want to make sure your developers have all the benefits they would get if you were hiring the in the US, which means stability, legality, health insurance or any other perks your company provides.
When you send someone money directly as international wire, they become contractors. If someone does not have a long history of being a contractor, they will not get access to the financial system, they won’t be able to get mortgages or car loans, and this can be a reason for someone to switch jobs at some point. It can be an excellent way to start but focus on getting a local labour contract so that they can be locally employed with all the local benefits and your company can stay legally compliant.
To achieve this, you need to use a provider that acts as an Employee of Record; plenty of EORs come up when you google it. Still, deel.com and ontop.ai are good options, and of course, we at BetterWay.dev act as an employee of record and provide all the legal compliance and benefits and much more.
An employee of record will bill you the salary plus all the government taxes and local benefits. It is important to note that the record employee will be responsible for the contract and making payroll once you pay them, but they will not do any employee well-being support. This will rely on you, and if you have a distributed team, you have to figure out how to support your employees better.
It is essential to note that the benefits developers want the most is private health insurance for themselves and their families. If you pay them directly, this is something that they need to do for themselves but make sure you allocate a budget as an extra and tell them to use it on the private insurance, it can be $50 to $100 per month per family member. This is also a service that Deel offers and that we provide at BetterWay Devs as part of our advanced EOR service.
Tip: Add private health insurance as a benefit in your job listing.
And lastly, depending on your company device policy, you must define how you want to tackle this. It is common for contractors to use their devices, but our experience has shown us that when a developer changes jobs, they have been working with a company computer. They don't own a modern computer in good condition, and it is always important to remember that they can use their personal computer for other things where security can be compromised.
In the interview, talk about the work device, if they have a good computer, and if they can dedicate it for work because shipping a company device to south America, while possible, can go wrong it can become costly. Usually, the customs agency will keep the computer for weeks until heavy taxes are paid, and if the developer has to send the device back for some reason, it is another hassle.
Suppose a developer doesn't have a device. In that case, the best strategy is to come to an agreement with them to help them buy it locally and have the device be dedicated to the company work, figure out the deal to minimize the risk in case they don't perform as expected and you are obligated to let them go, which is always a risk regardless of where you hire.
Many software companies in South America offer Staff Augmentation services; you can find many on the clutch and google. The main advantage of using a staff augmentation firm is that it is a Turnkey Solution, you don't have to worry about any of the above, but for long-term success, you have to select the provider well and worry about certain things.
Select a firm where you can create a trusting relationship and where you can make things transparent. Focus on salaries and benefits, if you select a provider that doesn't pay good salaries or provide good benefits, you will have the assigned developer change jobs quickly, and the staff augmentation firm will have to figure how to provide a replacement. This, of course, directly increases the monthly cost.
Have an apparent conversation with the company about how much they are paying. Ideally, find a provider willing to disclose how much salary they are paying with the understanding that the company has to pay all the EOR costs plus their profit; understand what they are providing for what they are charging.
Talk about the company, work schedules, holiday politics and work devices, and understand if they have an office and how they deal with remote or hybrid work. Many staff augmentation firms can become excellent partners and help you with a steady talent pipeline if the focus of the relationship is where everybody wins, the developer, the staff augmentation firm and your company.
Staff augmentation firms can be cost-effective if you use team leaders and don't require all developers to have a high level of English since local companies can find and manage more accessible non-bilingual staff. Make sure that it is clear if the company hires directly or uses another company to provide services, which will affect costs or lower salaries.
Remember that a staff augmentation firm can find good talent if they are known for being a good employer. After all, developers are looking for options that will benefit them the most. Keep expectations clear; some massive companies like Globant can maintain people on the bench available. Still, most local staff augmentation firms have to go out there and fight for the same seniors when they get a position from you.
I will talk more about juniors and the talent pipeline later in the article, but where staff augmentation firms are better positioned is to help you grow over time with junior and mid-talent.
The intermediary nearshore marketplaces create a network of local staff augmentation firms, such as You Team, Andela and others. The main advantage of using these companies is the recruiting force that is achieved by having many companies recruit for your position.
If you want to have good stable candidates, then you have to make the budget high enough to pay for a good salary plus the staff augmentation firm fee plus the marketplace fee.
We have seen that the final budget set for a position on many of these marketplaces is the same which is expected to be paid directly to the developer. This make it impossible for a good staff augmentation firm to enter the deal. Only unassigned profiles will be presented to keep them busy while a better opportunity comes for either the developer or the staff augmentation firm.
This route works well if you need to put together bigger teams, and then putting together many providers will help with the hiring needs. Beware of the same work conditions, schedules, and holidays.
Other things to have in mind when hiring
Now that we have gone over the different ways to recruit, there are other things we should be aware of to have a stable team.
Define a policy for holidays, and the more flexible, the better; all South American countries have different holidays, and local holidays are significant for many developers. Usually, their family members are not working on those holidays, which is a factor for many developers when deciding where to work.
There are countries like Colombia and Argentina that have a lot of holidays, talk about the developers or the companies about this. Our recommended policy is to allow the developer to request the holiday they want to take off with at least one or two weeks of anticipation so that no meetings or deliveries could be an issue.
Always maintain excellent communication, developers in South America are very professional, and they understand that there are business reasons to have to work on a holiday. Still, they also aspire to be able to be off on some of these dates.
The culture in South America is similar to the US culture, making it easier to work with Latam talent than with Asian talent. The same goes for being able to work in the same time zones, and it is the humane way of working on a regular day working hours. Asking people to work overnight is unfair and doesn't help work quality or morale, and this is where South America makes a lot of sense.
Yet Latam doesn't have as good English as India or Ukraine, for example, which creates a shorter pool of talent with experience. There are many companies recruiting on the same shorter pool of talent. In the end, the way to compete comes down to salary, yes, there are other factors, but many companies are paying excellent salaries with unique work environments and challenges.
Think about the roles and daily communication you need with the developer(s). Do you need that high level of English or is it mostly communication via chat? You will need a high level of communication with key members interacting with the team or developers from other countries. Still, it is essential to be aware that when hiring in South America, the higher the level of English, the smaller the pooler of candidates, and you are disregarding many talented people because of that.
Usually, developers will have a good enough level of English to communicate via chat. With the daily work, they improve their level a lot, and even better if the company does help them to take English lessons.
Local recruiters or staff augmentation firms can help you find good talent even without a high level of English, which at the end is also more cost effective.
It's essential to keep in mind that when the level of English is lower. This will cause them not to be able to show their knowledge as good on an interview, therefore support your interviews with Spanish-speaking developers and rely more on technical assignments than live interviews or live code tests.
Consider your talent needs in one, two or three years; it will probably be even more than today, so why keep fighting for the same senior talent? Plan and hire junior and mid developers. You can find in South America an excellent source of affordable junior talent that can start growing with your company and become very knowledgeable talent as they work with your company over the years.
I hope for this guide to help you start hiring in South America, and even better if you decide to do it through us. Our model is unique, we designed it in a way that solves all the issues that both companies and developers face, with the goal of creating long-term productive work relationships with incredible talent in Colombia and South America.
You can read more about how we do it on the homepage, https://www.betterway.dev/companies/for-companies.
In the end, no matter the method or the company you use, focus on the developer's well-being, ensuring they get a good economic benefit, an excellent opportunity to grow professionally and an outstanding work and life balance.
This will allow you to attract great talent and build long-lasting relationships to move your business forward.
Other related articles:
Recommended staff augmentation firms to hire long-term software developers in South America
Best employer of record (EOR) firms to legally hire software developer in South America
