As we’ve discussed on this blog before, Latin America is fast becoming a hub for remote tech talent. And the growing use of ‘nearshoring’ makes the region particularly interesting for companies in North America.
The LATAM region has seen steadily increasing English language proficiency over the past few years, making it easier than ever for overseas managers to work with Latin American employees. Plus, the low cost of living in much of the region means that it’s possible to offer locally competitive salaries while still making significant savings.
But the region is also diverse and dynamic. If you want your Latin American expansion project to be a success, it’s important to stay on top of the latest trends shaping the labour market. We’ll take a look at some of the key factors having an impact in 2025 in this article.
Addressing challenges in Latin America’s evolving labour market
Here are some of the challenges businesses hiring in the LATAM region are likely to face in 2025.
Finding and retaining talent amid shortages and skills gaps
Hiring workers in the LATAM region has long been considered a way of overcoming talent shortages in the US and elsewhere. But, while this is still a legitimate strategy, that doesn’t mean that finding talent (or at least, the right talent) in the region is easy.
In fact, many countries in Latin America are facing a paradox: young people are finding it difficult to find jobs, even while businesses complain about talent shortages.
This is a complex issue, but one of the main contributing factors is a mismatch between the skills held by the majority of the workforce and those needed by today’s businesses. Businesses seeking skilled professionals in emerging areas like AI, cloud computing and cybersecurity in particular will likely face talent sourcing issues in 2025.
Ensuring compliance with changing labour laws
There were various changes to labour laws across the LATAM region in 2024. These were driven in part by increased union demands for better benefits and protections for employees. Some of the most recent regulatory updates include:
- Stricter enforcement of equal pay laws in Brazil
- A new work-life balance law in Chile
- Reduced work weeks in Chile and Colombia
- New rights for teleworkers in Mexico
- Updates to harassment laws in Chile and Colombia
Companies hiring employees in the LATAM region need to ensure compliance with whichever local labour laws apply — and keep up with the latest changes. This is a particular challenge for businesses that work across more than one country within the region since the rules might differ from one to another.
Other key workforce trends in 2025
Here are some other trends that businesses operating in Latin America may experience in 2025.
The importance of nearshoring for the future of work in LATAM
Nearshoring is the practice of moving a business function to a nearby country where labour costs are lower. The term is usually used in contrast to offshoring, which typically means outsourcing functions to distant locations such as India or the Philippines.
Given its proximity to the US, time zone overlap and cultural cohesion, the LATAM region is a key nearshoring market. While nearshoring is not a new phenomenon, we expect its use to continue growing in 2025, particularly in countries such as Mexico, Colombia and Brazil.
But the nature of nearshoring has changed over the past few years. Instead of a focus on entry-level roles and simple tasks, many businesses are now looking to build deeper, more collaborative relationships with their nearshoring partners. By developing these stronger partnerships, businesses will be able to boost innovation and improve problem-solving.
Plus, the fact that AI and automation have streamlined operations and enhanced productivity means that low-level tech skills are less of a requirement, and soft skills are increasingly sought after. Throughout 2025 and beyond, governments, employers, educational institutions and staffing firms will need to work to upskill and reskill employees to meet these new demands.
Adapting to remote work and increasing digital nomadism
Like many other regions, Latin America has seen a significant rise in remote work over the past decade. Some countries, including Brazil, Ecuador and Colombia, have introduced specific ‘remote work visas’ to encourage so-called ‘digital nomads’ to come and work within their borders. This, coupled with the fact that LATAM is experiencing a boom in tech talent, presents an opportunity for US and other foreign businesses struggling to find talent at home.
Of course, there are many challenges involved with working with remote professionals in Latin America. The first administrative hurdle is simply engaging an employee in a country where you don’t have a legal presence — working with a partner like an employer of record (EoR) could be the solution. You’ll also need to find ways of effectively communicating and collaborating with your team despite potential language barriers, time zone differences and physical distance. Thankfully, with remote work becoming more common, there’s now a huge amount of advice, guidance and resources available to help employees and employers alike navigate the world of remote work.
If you can make it work, hiring remote workers in Latin America can bring some serious benefits to a business. Not only could this strategy allow you to access deep talent pools (at a fraction of the cost), but it could also help you build a diverse workforce, ultimately leading to greater levels of innovation and new ideas. You can read more about the benefits of hiring remote talent in Latin America in our article on the subject.
The need for innovative recruitment and workforce management tools
Given the changing nature of work in Latin America, businesses will need to find new ways of meeting their workforce needs in 2025. While the LATAM region is a key talent market, many employers will still face problems sourcing workers, especially in niche or emerging sectors. Using innovative recruitment and workforce management tools will be key to meeting these challenges.
For example, tools that use predictive analytics allow businesses to anticipate their workforce needs, ensuring they always have the staff they need without wasting resources. Other cutting-edge technologies like AI and automation can also help to streamline recruitment tasks, ultimately saving time and money for recruitment teams.
However, it’s important for teams sourcing talent in Latin America and elsewhere to remember that a human touch will always be key in recruitment. This is especially true for businesses hiring across borders, where sensitivity and an understanding of cultural differences are key to successful working relationships. In 2025, businesses should be wary of relying entirely on tech platforms for worker recruitment and engagement. Instead, consider working with a full-service, white-glove provider like CXC.
Preparing for the future of work in 2025
Businesses operating in the LATAM region in 2025 will face significant challenges, including the need to stay compliant with ever-changing regulations and develop effective strategies for sourcing talent amid skill shortages.
But there are also strong opportunities for growth, with nearshoring presenting the most promising option for businesses wanting to make the most of the region’s diverse talent pool.
Need help navigating the complexities of the Latin American labour market? Whether you need to source top talent, ensure compliance with local labour laws, or streamline payroll and workforce management processes, we have the expertise to support your expansion.
Get in touch with our team to find out how we can help you build a flexible, compliant and cost-effective workforce in Latin America in 2025.