How to Indentify and Recruit Latin American Talent for Startups

One of a founder’s most important duties is Identifying and recruiting top talent. Finding and convincing the best people to work for your startup can be the difference between success and failure. There are hundreds of great resources on how to find great talent in the US, but Latin America is very different. US strategies don’t usually work in Latin America.

Recruiting for startups in the US is difficult because the market is extremely competitive and well developed. But it can be easier because many people want to work at a startup because “startups are cool.” Sometimes they even pay well.

Many US workers choose a mission driven company that aims to change the world, or a company that offers workers the opportunity to work on interesting problems, rather than the company that pays the most or has the highest brand recognition. Additionally, structural advantages like recruiters and well developed stock options plans showcase startup opportunities and push more people to take a risk with a startup.

In Latin America, it’s different. It can be difficult to recruit for startups, but not because of competition from other startups.

Difficulties of Identifying Talent and Recruiting Employees in Latin America

1. Startups Aren’t Cool Yet

In the US, working for a startup is cool. In Latin America, it’s cool to work for an old, conservative business. Your parents, your significant other and your friends will likely be more impressed that you have a middle management job at a stogy retailer than if you earn the same money at a startup nobody’s heard of. I once told someone I “worked at a startup” and they were befuddled, asked where I worked again, and then gave me a look of pity, as if I were a jobless bum.

2. Latin Americans are generally conservative

In addition to wanting to work for conservative companies, most people would rather work for a big company because they perceive it as more secure than working for a startup. Latin America is currently going through the job losses that the US experienced in the financial crisis, so people still don’t view traditional jobs as risky.

3. Employees don’t value stock options

Stock options are a new idea for most Lain American workers and, in many cases, an alien concept. Most people generally think employers are trying to screw them by offering less money, but equity in the company. They can’t understand why a founder would want to give away equity to a lowly worker!

In addition, there haven’t been many examples of successful employees making tons of money from working at a startup because there haven’t been many successful startups in Latin America yet. The perceived value is low, so founders lose another tool from their tool kit.

4. Top university graduates expect high salaries (for their countries)

If a Latin American went to one of the top 2-3 universities in their country, they expect a top salary thats likely out of reach for a local startup and may even be expensive for a US startup in a non engineering role.

5. Unwillingness to move

In the US, if you’re a young single person and you get recruited to a top startup in California and you live in Wisconsin, chances are you’ll think long and hard about going. The US has a much stronger culture of moving for jobs. In Latin America, family usually comes first, second and third, so it can be hard to get top candidates to move.

6. Risk taking is viewed as dangerous

Finding risk takers can be difficult. Most Latin Americans are generally conservative because they’ve been trained to optimize for keeping their heads down and not getting fired. That’s antithetical to a startup, where founders push their team to take risks, fail fast and small, so they can avoid a big failure and be successful faster.

7. Intense work ethic is harder to find

Many people like their 15+ public holidays and 3 weeks of vacation and have a 9-6 mentality. If something needs doing outside those hours, they’re not working. That’s fine and there’s no problem with people optimizing for free time, but a startup needs people who are willing to be a bit more flexible and are generally optimizing for other things.

8. Universities train for big businesses

This is true in the US too, but its even more of a problem in Latin America. Most workers were trained to work in a big business and lack the skill set for startups

9. People are skeptical of companies that treat them well

Many large companies rule by fear and require constant face time to succeed. It can be strange for a worker to find a company that treats them well.

10. Workers value contracts

In the US, you can hire a new worker as a contractor. In many Latin American countries, people need and want government social benefits, so doing the contractor route can be more difficult. People would rather work for an established company on a contract rather than make 3-4x as a contractor.

11. Classism and racism can make finding top candidates difficult

Many local companies and recruiters reject top talent based on classism and racism, which makes some good candidates self select out of applying.

Strategies to attract Latin American talent for your startup

Make no mistake, there are incredibly talented people in Latin America who would love to work for a startup and would be great cultural fits. Here’s the strategies I’ve seen successful funds and startups use to recruit the best people in Latin America.

1. Show me the money!

If you’re a funded startup or a US based startup…show them the money! Hire at or above market salary, use local contracts and you can likely buy yourself a good team. Chile has the highest average wages in Latin America and you only need to earn $1400 to be in the top 5% of wage earners. Other countries are even lower. If you pay an employee US$2000/month, or even US$3000/month, you’ll be able to pick top talent. But this top talent that’s clearly motivated by money isn’t ideal, as they’ll be likely to jump ship at the first higher offer.

2. Lower an employee’s (perceived or real) risk

Four top funds in Latin America, including Magma, guarantee great people jobs in other portfolio companies if the startup they work for goes bust. We give top workers piece of mind so that they can “take a risk” by working at a startup, knowing they won’t miss a paycheck.

3. Don’t be like the locals: classism

Latin American countries have varying degrees of classism, which precludes some of the best people from top jobs in traditional companies. Or precludes them from advancement above lower level jobs.

50% of Chileans earn minimum wage. 90% earn less than $1400/month. Hire the best people, give them paths to advancement and you’ll find an enormous untapped pool of great employees. Bonus: if you treat them well, they’re more likely to be loyal since you gave them an opportunity.

4. Don’t be like the locals: university degrees

Most large Latin American companies won’t even look at a person’s resume if they didn’t complete university. Or just as bad, didn’t go to one of the top 2-3 universities in their country.  No degree/lower tier university=low wage work for the rest of your life.

Some of our best employees didn’t finish university, either because they ran out of money, had to start working to help their families or weren’t prepared to succeed in university when they were 18-20 years old. But they’re brilliant and hard working. Give them an opportunity and you’ll likely have a loyal, hard working employee who is just as qualified, if not more so, than someone who did finish university.

5. Don’t be like the locals: company culture

Most Latin American companies value copious in office face time, rigid rules, punish failure harshly, requiere employees to punch the clock….literally. Many rule by fear and don’t offer opportunities for advancement.

Show that you value productivity, allow flexibility, allow space for small failures and attract great employees.

6. Give talented people something fun to work on

Like the US, many big companies in Latin America are extremely conservative. A programmer can work on maintiaing old code from the early 2000s, or they can come work on the cutting edge, learning something new every day. Show you offer these opportunities.

7. Train and teach your employees

Many Latin American large companies don’t push personal growth and employees can stagnate, doing the same thing over and over. Emphasize that you train your employees and teach them the newest tricks of the trade.

8. Culture of promoting from within

Most large Latin American companies don’t promote from within. If you start in an entry level position, you’ll maybe get a promotion or two, but you’re not going to be able to advance very far. Show that you’re different.

9. Don’t be like the locals: corporate culture fit

In Latin America, like the US, “can I have a beer with that person” is one of the bigger, yet unspoken, hiring criteria. In Latin America, so many smart, dedicated, people get passed over if they don’t fit the prevailing culture. I think this sentiment is even stronger than it is in the US.

10. Hire women

Latin American companies can be infused with machismo. Promote a more even culture and hire smart, dedicated women and you’ll be successful.

11. Interview for culture and test

More people in Latin America prefer a more laid back lifestyle than people in 2016 USA. And that’s fine. But it’s better to be sure that the person will fit a startup culture ahead of time, rather than just being really smart. I always do a one to three month test with all new startup employees to make sure that they can do the job and that they are up for working in a startup.

12. Local job boards + referrals

The best place to find locals are on local job boards. International boards don’t work well and you have lots of competition. Find the two biggest local job portals and post there. Join expat groups on Facebook and post there as well. Overqualified expats who either don’t speak the language well enough, don’t have a university degree that local companies recognize, or don’t have the required paperwork make amazing employees.

Edit to add:

13. Involve C level or founders in the recruiting process

People love to work with passionate teamos who love what they’re doing. In Latin America, most companies push hiring onto HR managers. You can be different by involving top level people in your startups. HT: Nico Orellana.

9 Comments

  • i’ve kept up to date with your posts. i admit i am a company worker and i like it (only because i havent found my passion). The local startups that ive seen that focus only on Chile dont seem good for the long run or i seem to lack the skills for them. None the less, startups look like a good option if they looked more stable or didnt go bust.

    Do you have any place as to see what job offers are in the startup world in Chile or US?

    Also 1 slight correction, in chile if you dont have a stable paycheck you cant opt into renting, as most people ask for your last 3 salary summaries (liquidaciones de renta/sueldo) and when your a contractor this isnt always the case. Also as a contractor you dont always get benefits, like bonuses (or aguinaldos), discounts if the company sells something.

    • Hey Marcos,

      Thanks for commenting. There’s absolutely nothing wrong with working for a large company…people should do what makes them comfortable and happy. Your point about there not being that many good startups is right…there previously haven’t been that many, but there are more every day.

      • actually i would love to work at a startup. even thinking about moving to the US just for a masters and to network for going to startups. The thing is that my skill set is not as demanded in startups. I am in the IT area. Im no expert in any field, i can manage quite well projects, i can code up to a certain degree, google the rest, and have some ppl skills, but no expert in any of them. usually startups need an expert programmer, expert seller, expert manager or expert some-thing-else, so being a bit of a jack-of-all-trades doest work much in this area.

        • I think you could easily find a job in a startup if you’re a decent programmer. You don’t need to be an expert and you can learn to specialize if the startup you’re working with needs specialization. If you’re interested, shoot me an email with your portfolio/github and I can forward it to some of our portfolio companies who can take a look!

          • thanks! i actually dont have any portfolio as the programming stuff are manly small solutions work related. Also, i dont want to specialize in programming. probably thats why my skillset isnt one of specialization. Thanks though! if i ever change my mind will take you up on the offer though!

  • Hi Nathan
    I’m impressed (again) by your accurate analysis of Chilean labour market scenario (though you’re referring to Latin America I wouldn’t endorse some views to other Latin Americans (eg Brazilians)) … and it seems you’re refining your already assertive observations. Good on you and your readers….
    Stagnation was knocking at my (office) door when i decided to move to… Australia.
    Unfortunately Finance (my area) in Chile is particularly weak as a field, after being dominated by non-specialist professionals (a truly case studio worldwide!) and overt classicism takes its tall every day (ie Industrial Engineer from the 2 big ones are deemed to know everything and they are preferred if they come from you-know-where). More interestingly, I’d say that a permanent issue regarding entrepreneurship in Chile is precisely derived from this; since accounting standards and internal controls are simply disregarded or overridden (for the sake of short-term incentives), financial information is normally unreliable and decision-making is (to say the least) harder (so that some managers prefer relying on tangible metrics, disregarding the core system intended for that: financial reporting!). As you said, hard working and on demand skills proved to make a big difference even here (I’ve been progressing very quickly in Local Government and now in mining industries), though culture-shock is very very real (haven’t had a beer with my boss yet here). Cheers

    • Hi Claudio,

      I’m glad you enjoyed it. Although I didn’t make it clear in this post, I’m focusing on spanish speaking latin america, especially chile, argentina, peru, colombia and mexico, where I think my points are broadly true. some countries have more classism (chile vs. colombia), others are more open to moving (mexico/colombia).

      I don’t have as much experience in Brazil…how would you characterize the differences?

      • I would state as a primary difference Brazilians are not willing to work hard as many Chileans are. But classism, racism and a positive discrimination for men are definitely a constant. It’s interesting though (and I actually edited that from my first comment) how we do businesses in Latin America is probably the main cultural issue -as you addressed it brilliantly in your Weonomics note some time ago. Labour market is definitely a key issue as well as you pointed out here, not forgetting corruption which probably is the main deterrant overall (‘seriously you wanna invest in LA?’ some might told you). Another interesting base you touched here was the conservative business approach (after all, economies in L Am are mainly extractive and take advantage of priviledges and corruption to avoid o eliminate competition) which contaminates the way professionals behave (conservatively as well!). Another key aspect might be the massive offer above supply in some professional areas, opposite to technicians/trades which can also impact and distort labour market. Well, I’m in a pretty privileged position to note this issues now, after working as an accountant for 2 years in Australia. There’s a number of issues regarding Finance that might be interesting to discuss at some point. Basically I think entrepreneurship in Chile is impacted by a very deficient professional level on this, driven by a pretty peculiar structure (not only corrupted), quite unique I would say. Cheers!

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