Common Hiring Mistakes in LatAm and How to Get It Right
Hiring in LatAm is the next big thing. But if you want that dream team, you must watch out for these common mistakes.
By Joseph Burns, Founder and CEO of Lupa
When you think about hiring in LatAm, what’s the first thing that comes to mind? Probably cheap, right? While it is less expensive than hiring in the U.S., that’s not its main appeal. This is not only a place where you look for call center staff or administrative workers. In LatAm, you can find top-quality talent with degrees from prestigious universities and experience in successful companies, ready to work in tech, marketing, finance, and even high-level management.
Being at the forefront of this hiring trend will benefit your company greatly. But if you’re unsure how to navigate the LatAm hiring scene, you might make a lot of mistakes. I don’t want that for you—that’s why Lupa exists. To give you an extra push, I’ve compiled a list of common mistakes U.S. companies make when hiring in LatAm, so you can avoid them at all costs.
8 Common Mistakes To Avoid When Hiring in LatAm
Hiring in LatAm is a great opportunity, but look out for these common mistakes next time. Here are the 8 most typical—and avoidable— I’ve seen:
1. Going for the cheapest option. I get it: Everyone wants to save money, and hiring in LatAm can offer great cost savings. But if you pay the lowest possible amount, you risk losing your employees. The best policy is to aim to be at the higher end of the pay scale in a less expensive market. This way, you can access and retain the very best professionals. Remember: A great employee is ten times more productive and impactful than an average one and turnover is very expensive.
2. Not looking for people who align with the U.S. culture. Many companies make the mistake of not considering cultural alignment. At Lupa, we know that first-time employees in the U.S. may need a period of adjustment. That’s why we provide training for companies hiring in LatAm, helping new hires understand U.S. culture. We also test for this. When hiring a person from Latin America for a U.S. company, we look to see if their personality aligns well with the typically more outspoken and creative U.S. culture. Knowing where on the cultural spectrum to find your talent can make your hiring process much more successful.
3. Choosing biased payroll solutions. Every LatAm country has its own legal requirements for hiring—whether it be contractors, full-time employees, or EOR. You’ll need to seek advice on the contract side. When you do, avoid payroll companies that push your problems into their solution. Instead, go for a neutral expert like Lupa or other entrepreneurs who have hired workers in Latin America. This usually means choosing a headhunter with extensive experience helping companies hire across different countries, who knows all the contract options, legal implications, trade-offs, and payroll platforms. Only someone with a neutral point of view can give you honest advice and help you mitigate risks and avoid mistakes.
4. Not understanding the market in LatAm. A big mistake is entering the LatAm market without proper knowledge. Companies often don’t know which local companies are the best to hire from. A key indicator of great talent is their experience with successful, selective companies that develop their employees well. Working with someone local who understands which countries to target and which companies are top-tier for your industry can greatly enhance your hiring strategy. This approach is far more effective than passively waiting to see what comes in.
5. Posting jobs anyone can apply for. Another typical mistake is seeking active candidates (from job posts )instead of passive candidates (candidates you recruit). When hiring in an unfamiliar area, you should approach people directly, much like when dating in a strange place. Don’t just wait for applications to roll in, as this can attract scammers or high-risk employees. By targeting individuals who already have jobs—passive candidates—you reduce the chances of encountering someone with bad intentions.
6. Not doing background checks. Skipping background checks is a major oversight. Especially when hiring in an unfamiliar place, it’s crucial to complete thorough background checks before making a decision. Ensure you have a local company to perform these checks or work with a headhunter who has access to local providers. This step helps verify candidates’ qualifications and reduces the risk of hiring someone with a problematic history. It’s essential to ensure your new hires are trustworthy and fit for the role.
7. Not understanding the differences between LatAm countries. A common error is not recognizing that every country in LatAm is unique, each with its own benefits and downsides. Just like Germany has a very different culture and set of labor laws from Italy, it’s important to understand the differences between hiring in Argentina, Colombia, Costa Rica, Mexico, etc. Each country has its own trade-offs, and knowing how they fit into your hiring strategy is essential. Also, overlooking these distinctions can lead to looking in the wrong market by not playing in the optimal talent pool. If you want finance talent, New York is a great place to look. If you want tech talent, San Francisco has a huge pool of great people. These same concepts apply in different cities in LatAm.
8. Not offering appropriate salaries. Finally, you want to make sure you aren’t over or underpaying. A common pitfall is not being aware of what constitutes a competitive salary. If you look online, you’ll find a million different resources, many of which are outdated or based on low-quality data. To attract top talent and avoid overpaying, ensure your salary data is accurate and current. Use reliable sources to determine competitive compensation. Working with a company that has done extensive market mapping for this role, or conducting your own market mapping and reaching out to candidates to find out what they are earning, is the best way to go about it. The value of currencies and cost of living shift extremely quickly in Latin America, and prices for certain roles can shift quickly due to demand, so it can be difficult to stay up to date.
What’s inside
8 Common Mistakes To Avoid
Future Hiring Trends in LatAm
Future Hiring Trends in LatAm: What to Expect
We’re already seeing significant growth in hiring in Latin America, and this is only going to continue to grow. It’s the fastest-growing region for venture capital investment, and when a lot of money pours into an area, the talent pool grows with it.
Remote work in LatAm is also on the rise, thanks to better digital infrastructure and tools for flexible work arrangements. People have high-speed internet, and access is only going to improve. This makes remote work—and hiring—even more appealing.
With the growing demand for specialized skills, building a strong talent pipeline and good employer brand is essential. Make sure your interview process is solid and candidate-friendly. Positive reviews on sites like Glassdoor can really boost your reputation. It’s super important to make a great impression from the start.
Putting It All Together
People should know that this trend is only going to grow, and their competitors in the States are going to be doing the same. If all your competitors are paying less for better people, you’re at a disadvantage if you don’t jump on the opportunity. And if your competitors aren’t doing it yet, then it’s a great opportunity for you to get out in front, do more, and advance faster than they can.
I love to share my thoughts with others on different ways to optimize their hiring processes when looking for top talent in LatAm. And if you are new to this, I can help you out. Let’s chat!
