Why Canadian Companies Need To Hire More Remote Software Engineering Talent In Latin America

One of the positive effects of the pandemic is just how much it accelerated the availability of remote work. But although a lot more Canadian companies now build distributed nearshore teams, welcoming talent from across the country, Canada is still lagging behind others like the US, UK, the Netherlands, and Singapore who have been benefiting from the cost savings of hiring remote overseas workers long before the pandemic.

Canadian startups, banks, and tech companies continuously re-post their job opportunities in hopes of finding local talent rather than opening themselves up to the possibility of filling these software development positions remotely in Latin America. By limiting their talent pool to local talent, Canadian companies end up having to go to war on salaries for their best chance at attracting top talent. This is particularly costly when it comes to bidding for IT talent such as senior Software Developers and Data Engineers who are high in demand. As a result of this battle for talent, salaries for sales, marketing, and product in Canada increased by 38% in 2021.

Knowing that there is a critical shortage of talent in the country, why are Canadian organizations limiting themselves to hiring locally when they can experience huge cost savings by hiring remote international talent in buzzing IT hubs like South America? Through some of our research and conversations with clients, we’ve uncovered a few surprising misconceptions around hiring remote overseas workers that Canadian companies need to correct before they miss out on their chance to hire skilled IT professionals in close proximity.

Language barriers are often a false assumption

In one of our Linkedin polls, a surprising 50-60% of respondents reported language barriers as their main concern for hiring remote overseas workers. Assuming that employees based in regions like South America are simply going to have poor English language skills is a huge misconception since this region boasts a highly educated talent pool with strong English proficiency. In many cases, professionals in Latin American countries are actually more fluent than Canadian immigrants who learned English as a second language late in life in order to make their transition over to Canada. If hiring managers are truly concerned about a candidate’s language skills, then this can easily be tested through English language testing during the recruitment process. With plenty of tools at our disposal to ensure that candidates have the fluency they need to effectively perform in their roles, there is simply no excuse to continue to make this false assumption. It’s time to switch this biased mindset around language barriers existing based solely on where workers are located.

Avoiding hiring remote international talent is avoiding substantial cost savings

The cost savings North American companies can experience by hiring tech talent offshore in South America due to the lower cost of living makes the idea a no-brainer. At DevEngine, we help our clients save 30-40% of their costs on salaries alone when hiring software developers in South America, as well as 20-25% of savings on recruitment costs.

For example, a South America-based Intermediate/Senior Ruby on Rails Developer can cost a Canadian company a salary of $85K-110K (CAD) per year with all benefits and recruitment agency commissions included. If the company is lucky enough to find one locally, the same position will cost the company $120K-160K (CAD) per year for salary alone, not including benefits, employer costs (8%), vacation pay, and an average of $20K agency finder fee if the company works with an IT recruiter. Similarly, an Intermediate/Senior .Net Developer can cost $70K-100K (CAD) in South America, but $90K-130K (CAD) plus all other costs if hired locally.

Technology companies and startups have even more incentive to turn to other markets for talent since they can qualify for SR&ED tax credits (or equivalent in other provinces) for utilizing Canadian vendors for outsourcing.

With the war on talent, the time to hire remotely is now

Latin America has already been an attractive talent hub for employers given English language proficiency, strong government investments in education and technology, and proximity to Canada. But two to three years from now, it may be just as difficult to hire a skilled and experienced Software Developer in Brazil, Argentina, or Colombia. Talent in these markets is getting snapped up quickly, and before we know it, it will be time to search for skilled workers in the next talent hub further away, like Africa. Canadian companies should not sleep on the opportunity to hire talent that is nearby, and in similar time zones. Looking to South America sooner rather than later will help Canadian companies avoid delays of information and productivity losses associated with having staff in different time zones. They can also enjoy the ease at which their remote workers can travel into head offices for annual staff events and conferences as needed without significant costs.

There is no shortage of support available for help with the remote hiring process

Hiring remote overseas workers can feel daunting to companies that don’t know where to start. But there are plenty of platforms and service partners Canadian companies can explore to help guide them through the recruitment process. Companies that prefer a DIY approach can turn to platforms like Deel and Remote.com for assistance with candidate sourcing, onboarding, payroll, and health insurance options for employees in over 150 countries.

Alternatively, Canadian organizations can turn to full-service partners like recruitment agencies to save on the precious resource of time and make the most of getting access to their candidate databases. By working with recruitment agencies that are specialized in hiring remote overseas talent in specific regions, Canadian companies not only save tremendously on time spent in the hiring process, like pre-screening calls, interviews, and technical interviews. Full-service partners are well prepared to handle administrative processes like payroll, tax compliance, vacations, sick leave, and paid time off. And what’s more, is the value of working with partners that know markets like Latin America inside out to give the best guidance on salary, rates, cultural differences, and candidate expectations to ensure the engagement is a success for everyone.

Canadian companies will continue to miss out on top-shelf IT talent and major cost savings if they continue to limit themselves and avoid hiring remote workers from overseas. It’s time to take a more proactive approach to building distributed teams and seeking out the assistance needed to do so before talent in nearby tech hubs becomes impossible to find.