5 Ways to Scale Effectively in Latin America

1. Research Local Customs to Offer Competitive Benefits

Hiring in LATAM isn’t just about salary – it’s about offering a full package of employee benefits that reflects local customs and expectations. In Mexico, for example, benefits like the aguinaldo (13th-month salary), meal tickets, transportation allowances, and remote work stipends are often considered standard. “There are a number of benefits that are not legally required, but they are kind of table stakes,” noted Ian Jackson. Without them, companies risk losing top candidates to better-informed competitors.

Beyond benefits, cultural expectations also shape what candidates consider attractive. In Costa Rica, where English proficiency is high and many professionals have already worked with global firms, perks like learning and development budgets and career growth pathways are essential. These workers expect more than just a paycheck – they want future prospects. Research or benchmarking studies, often supported by firms like reesmarxGLOBAL and HSP Group, can help ensure your offer stands out.

‍

2. Understand Regional Differences to Put Together Competitive Packages

A one-size-fits-all approach won’t work across LATAM, or even within a single country. Brazil illustrates this challenge well. Companies must navigate region-specific collective bargaining agreements (CBAs), which can vary by location and industry. These agreements dictate everything from minimum benefits to private healthcare levels. “The various CBAs often vary by industry and region,” said Felix Ndeloa. Not factoring these in can lead to non-compliance and inflated employer costs.

Colombia presents another kind of complexity. Salaries for the same role can vary dramatically based on a candidate’s region, background, and previous exposure to global firms. In major cities like Bogotá or Medellín, costs are higher due to infrastructure, international experience, and demand. But opportunities exist in smaller cities with strong infrastructure, where companies can find quality talent at more affordable rates. Understanding these nuances is key to optimizing hiring strategies.

‍

3. Broaden Your Methods of Sourcing Talent

In a competitive hiring market like Brazil, where 2024 brought record-low unemployment, relying on one job board or sourcing method isn’t enough. “If you're completely relying on a single tool, you're setting yourself up to fail,” said Ian Jackson. Companies that want to attract top-tier talent must diversify sourcing channels using local job boards, networks, and specialist recruiters.

reesmarxGLOBAL, for example, emphasizes multi-channel strategies tailored to regional contexts. In Brazil, tapping into on-the-ground networks has been essential to win over candidates with multiple offers. With demand for skilled professionals growing, especially in tech and finance, broadening recruitment efforts beyond LinkedIn and into local ecosystems can be a game-changer.

‍

4. Test the Market Before Opening Entities

Setting up a legal entity in a new country is a costly and time-consuming commitment. EOR services like Playroll offer a smarter way to test the waters. In Mexico, where labor reforms and compliance requirements are complex, companies often start with a few hires via EOR services to assess fit before committing long-term. “EOR will be a really quick and compliant way to hire that person as a local worker,” noted Demetroulakos.

Colombia presents similar challenges, with high corporate tax rates, rigid labor rules, and slow incorporation timelines. “It can take two to four months to set up an entity,” said Ndeloa. EOR services streamline the process by handling taxes, payroll, and compliance, allowing companies to launch operations quickly while reducing risk. Once you’ve achieved stability and scalability, making the shift to establish a local entity can be a well-informed next step.

‍

5. Work with Trusted Partners Early to Decide on the Right Strategy

Choosing the right market and setup model early on can save significant costs and headaches. In complex markets like Brazil, where every employee falls under a unionized collective bargaining agreement and employer taxes can reach 40%, expert guidance is essential. “All companies that I've come across in Brazil are subject to unions,” shared Ndeloa. Navigating tax, labor law, and regulatory compliance requires local expertise.

Working with partners like reesmarxGLOBAL, HSP Group and Playroll helps global employers align their strategies with local requirements. Whether it's understanding severance liabilities in Costa Rica, tax risks in Colombia, or CBAs in Brazil, early engagement with experienced providers ensures you're making smart, compliant decisions. “Work with a recruitment partner that knows the region,” advised Jackson. That early groundwork can determine whether your expansion sets you up for success or leaves you exposed to risk.

LATAM is a fast-moving, talent-rich market with distinct opportunities and risks in every country.

‍

LATAM is an exciting, vibrant, fast-moving market. Companies that are looking to expand globally should give it serious thought.

Ian Jackson, Global Account Executive, reesmarxGLOBAL

‍

But expansion here demands more than enthusiasm – it requires smart strategy, local insight, and trusted partners.

Before making your next move, book a chat with our experts. We can provide tailored advice on the right approach for your needs, so your business can scale efficiently and avoid the costly mistakes others have already made.