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The rise of Brazil as a tech hub
In Brazil’s new industrial policy, technology plays a pivotal role, with the investment of BRL 300 billion (US$60 billion) planned for sectors like biotechnology, chip development, and systems aimed at strengthening the local economy. Introduced in January this year, the strategy aims to drive national progress by emphasising sustainability and innovation until 2033. This new policy seeks to boost technological growth, enhance job opportunities, attract global investment, and improve international competitiveness.
Brazil ranks 12th in the global IT market and represents 36.5% of the Latin American market. Undeniably, the tech industry in Brazil is experiencing notable growth, projected to increase at a CAGR of 17.53% and reach US$192.12 billion by 2027. This surge is propelled by progress in security, data management, artificial intelligence, and customer experience solutions.
With a growing number of tech graduates and a rising presence of international tech companies located in Brazil, it’s now a global hotspot for hiring software developers and other tech talent. Brazil’s tech industry stands out for its youthful and dynamic workforce, boasting a solid educational foundation in software engineering and IT. Local universities and technical institutes play a crucial role in producing skilled professionals who excel in the latest technologies and can easily adapt to global software development standards comparable to those in Silicon Valley.
In this article, we’re reviewing the key opportunities to recruit top tech talent in Brazil. Whether your organisation is US based or elsewhere across the globe, Brazil is a lucrative hub of talented tech workers, who are educated to a global standard, who share key global time zones and who are hungry for international experience.
Core strategies for recruiting top tech talent in Brazil
Understanding the Brazilian tech market
Fuelled by the digital transformation post-pandemic, the IT sector in Brazil has seen a 23.9% increase in job opportunities since 2020, with a remarkable 12.3% growth after 2021. This growth has significantly elevated the country’s GDP to $1.6 billion, the largest in Latin America and the Caribbean.
Brazil offers a positive business environment with multiple tax benefits, affordable labour, and a thriving economy. The government has actively promoted foreign investment, and there are multiple economic zones in the country that provide special advantages and amenities for international investors.
Outsourcing to the IT market in Brazil is anticipated to generate a revenue of US$20.80 billion by the end of 2024. Comparing this to India’s projected revenue of US$10.51 billion in the same period, highlights the confidence businesses are placing in Brazil’s tech industry.
The Brazilian government has played a significant role in this transition by introducing the “Lei do Bem (Law of Good),” offering tax incentives to local companies involved in research and technological advancements.
This initiative, coupled with attracting foreign investments from the tech sector, has increased the pool of available tech talent.
Brazil offers a prominent tech hub in Latin America for innovative companies, with various cities vying for the title of ‘Brazil’s Silicon Valley.’ São Paulo is a standout contender due to its established entrepreneurial culture and favourable business environment, positioning it as one of the top cities in this regard.
The other key Brazilian tech hubs include:
- Campinas is a modern city located near São Paulo and is the leading location for high-tech headquarters, research and education, incubators and tech industry parks.
- Recife, in the state of Pernambuco. Recife is gaining traction as a leading hub for artificial intelligence and biotechnology.
- Florianópolis, in state of Santa Catarina which is home to several major tech corporates including IBM and Lucent Technologies.
The appeal of Brazil as a top tech outsourcing hub is well-founded due to key issues including:
- The Brazilian government actively supports the tech industry’s growth by introducing initiatives like the ‘National IoT’ strategy.
- Brazil has become a hotspot for tech startups in Latin America, with São Paulo standing out with over 2,700 innovative ventures.
- Collaborating with Brazilian tech experts is attractive due to synchronised time zones with the U.S., cost-effective hiring choices, and convenient flight options.
These elements improve collaboration efficiency and promote strong commercial and talent partnerships.
Leveraging embedded talent solutions
Leveraging embedded talent solutions is a smart move for companies seeking to recruit top tech talent in Brazil.
Embedded talent providers can be categorised as entities between in-house staff and external recruitment agencies. Although they don’t work within your organisation, they collaborate with you for an extended duration compared to regular recruitment agencies, usually for a monthly fee. This prolonged engagement allows embedded partners to understand your business more deeply than outsourced agencies. They assist in not only finding top talent for your business but also contribute to your long-term strategic objectives and brand development.
An example of embedded talent solutions includes Employers of Record (EORs), which manage all HR services for companies lacking locally based entities.
In looking to recruit top talent in Brazil, embedded talent solutions such as EORs are a strategic goldmine for expanding your business, your geographic footprint, while have the security and confidence of a strategic talent partner. The benefits of an EOR include:
- Simplified Expansion: EORs streamline the process for businesses to grow their international workforce without establishing legal entities in every country.
- Cost Reduction: Outsourcing employer duties can achieve cost savings on legal, HR, and administrative tasks.
- Focus on Core Activities: When you engage an EOR, you can focus on core business without the distraction of complex employment-related issues.
Overcoming recruitment challenges in Brazil
With local and global employers turning their attention to this qualified talent pool, the competition for attracting top tech talent in Brazil is intense. Tapping into the abundant market comes with several obstacles to consider, including:
- Complicated labour laws
- Difficult tax and legal restrictions
- Rising wages
- Tedious bureaucratic processes
- High turnover of employees
Brazil’s legal landscape is complicated for the uninitiated. Key considerations around minimum wages, worker conditions, overtime obligations, termination protocols and paid leave are varied and prone to nuanced changes. That’s why partnering with an EOR will greatly assist in the delicate requirements of compliance when hiring and managing workers in Brazil.
In summary, an EOR will allow your business to:
- Achieve faster setup in Brazil, with the right talent.
- Minimise your risk of non-compliance of local workplace and employment laws.
- Reduce your costs of accessing quality tech talent from Brazil.
- Have greater peace of mind knowing you don’t have to learn and navigate the intricacies of the legal landscape.
Expanding recruitment efforts with innovative approaches
Venture capital investments and their impact
Venture capital (VC), typically associated with investment banks or well-funded investors, serves as a form of private equity for supporting promising startups. Over the past five years, the median deal size for VC-backed companies has shown a consistent rise worldwide, regardless of development stage. This trend is particularly notable in Latin America, where VC investments have surged by approximately 820% since 2016, following a period of relative stability in the preceding four years.
Notably, more than half of the VC deals in the region have been directed towards Brazilian startups. This strategic focus positions Brazil as the primary market leader in VC investments within the region.
Venture capital has played a vital role in funding the tech sector in Brazil with a focus on innovation and tech diversity. By actively supporting and investing in promising startups, VCs serve as catalysts for innovation, drawing in talented entrepreneurs and promoting a culture of risk-taking and experimentation.
A significant economic benefit of venture capital in Brazil has been the generation of high-quality jobs. Startups backed by VC funding aim to recruit top talent, leading to job creation and the attraction of skilled professionals. In addition, these companies typically create job opportunities in growing sectors like biotechnology, clean energy, artificial intelligence, digital assets, and advanced manufacturing, contributing to Brazil’s economic diversification and advancement.
Implementing data-driven recruitment strategies
In working with an EOR in recruiting top tech talent in Brazil, a data-driven recruitment approach is the only way to ascertain your ROI on talent sourcing investments.
Establishing a data-focused recruitment approach involves utilising analytics relating to essential recruiting metrics such as time-to-hire and pipeline speed. This will improve your candidate relationship management and hiring tactics. This method stands in stark contrast to traditional hiring processes, which often rely on intuition and subjective decision making. By incorporating data analytics, you can significantly enhance the efficiency, cost-effectiveness, and overall quality of your hiring capability in Brazil.
The key factors to consider for implementing a data-driven recruitment approach when embarking on the Brazil tech talent market, include:
Finding the right recruitment software for your talent expansion into the Brazil tech talent market is crucial. Applicant tracking systems track the progress and status of your entire hiring ecosystem. Sourcing software helps you more accurately identify and hire candidates. And hiring software helps to coordinate hiring and onboarding processes. Each of these recruitment software tools offer different data points for remote hiring. Your EOR will have the best insight into adapting your approach to suit the candidate market in Brazil, and ensuring the candidate experience is optimised.
Leveraging social media and online platforms for talent scouting
Today, social media channels such as LinkedIn, Glassdoor, and Indeed have transformed the way businesses source new talent. By establishing an online presence and utilising their networks, HR teams can now reach a wider and more geographically diverse range of candidates for job vacancies.
Employers can readily search for potential candidates based on specific job titles, skills, qualifications, and location. Social media platforms also offer the means to evaluate, select, and even conduct interviews with candidates, streamlining and reducing the cost of recruitment.
Again, your EOR partner will have a sound cultural understanding of the platforms most commonly used by tech talent in Brazil, saving you the guess work in your hiring approach. And they will ensure you’re only present on the platforms suited to the type of skills you seek to hire.
Also, ensure your EOR partner is well equipped with the hiring metrics you set in place, for successful hiring of tech talent in Brazil. These metrics will likely include time-to-fill, cost-per-hire, applicant-to-interview ratio, and quality of hire. Other metrics include source of hire, attrition rate and time-to-productivity. It’s important to work closely with your embedded talent partner to keep your metrics in focus and to measure the success of their hiring strategy.
Conclusion
The key strategies for gaining a competitive edge in hiring top tech talent in Brazil include:
- Having a sound understanding of both the tech and talent markets in Brazil.
- Knowing where the key tech hubs are located, based on the skills you seek to hire and the reach your business is aiming for.
- Understanding the impact of VCs on the availability and skills of tech talent in Brazil.
- Taking a data first approach to hiring and measuring the success of your recruitment strategy.
- And most importantly, making your expansion strategy into the market easy and stress-free by partnering with and embedded solution partner like an EOR.
Making an informed decision about your hiring and talent management approach for tech hiring in Brazil, is crucial. This is where an embedded solution partner can skilfully ensure your business is in the best competitive position for expansion into the Brazilian market’s tech talent landscape.
To learn more about CXC’s EOR services and locally based team in Brazil, click here. Or, to discuss your organisation’s expansion into the Brazilian market, contact us here.
