An analysis of the Brazilian tech market, plus how US and European companies recruiting in Brazil can overcome global hiring challenges with embedded Total Talent Management.
In recent years, HR heads at global companies in the United States and Europe searching for top tech talent have zoned in on recruiting in Brazil, dubbed the “largest innovation ecosystem” in Latin America by BBVA, which is rapidly taking its place as the world’s “Second Silicon Valley.”
It is no wonder that global tech recruiters are eager to hire in Brazil, one of Latin America’s top five regions for tech. The country, which specializes in software development outsourcing and nearshoring to the US and other countries, boasts the highest number of tech graduates per year when compared with competing Latin American tech hubs Argentina, Costa Rica, Colombia, and Mexico.
Latin America’s top 5 regions for tech
Brazil continues to be a hotbed for tech startups and unicorns valued at over $1 billion (Brazil has the most number of unicorns in Latin America), owing to a talented pool of tech specialists, impressive IT infrastructure, and reasonable costs of IT services (as compared to the US and Europe). The country remains the region’s leader in South America’s tech boom, with Brazilian cities São Paulo, Curitiba, Recife, and Florianopolis becoming some of the country’s most sought-after tech hubs.
Market valuation of Brazil’s fintech unicorns (2022)
To continue with our analysis, let us take a closer look at Brazil’s tech talent market and economy.
In the next few sections, we will cover:
If you’d like to learn more about specific solutions for recruiting in Brazil, jump down to section 5 below.
Catalyzed by post-pandemic digital transformation, the number of jobs in Brazil’s IT sector has grown by 23.9% since 2020 (with a 12.3% growth after 2021), significantly boosting the country’s GDP of $1.6 billion, the highest in Latin America and the Caribbean.
Gross domestic product (GDP) in Latin America and the Caribbean in 2021, by country (in US $ billions)
It’s a similar story for the global IT sector, which continues to see growth after the pandemic, from $8179.48 billion in 2022 to $8852.41 billion in 2023, with a compound annual growth rate (CAGR) of 8.2%. As for the market’s future, analysts predict that the sector will grow to $11995.97 billion in 2027, at a CAGR of 7.9%.
This data is corroborated by recruitment solutions provider Page Outsourcing in its survey on Global Recruitment Trends 2022. Human resource specialists, employers, and recruiters identified the five most in-demand professions globally, the majority of which are tech-related—software developers, engineers (project engineers and DevOps engineers), sales workers (sales representatives, key accounts, and inside sales), cloud specialists, and project managers.
Most in-demand roles in 2022 (global)
In Latin America, the top technical professions for 2023 are computing roles, technology project managers, data analysis specialists, metaverse construction specialists, 5G specialists, blockchain specialists, software developers, and cloud architects and engineers.
For the first time since 2020, the tech sector in Brazil saw a decrease in IT job openings in December 2022, with a loss of 3,630 jobs in a stock of 1.13 million that month.
Notwithstanding the overall decline in open job positions, revenue in the IT services market in Brazil continues to buck the trend, growing at a projected rate of $12.16 billion in 2023. By the end of this year, the market’s largest segment, IT outsourcing, is predicted to hit a market volume of $4.34 billion.
Despite recent setbacks brought on by the Russian-Ukrainian war, the global tech industry will continue to see growth, with market intelligence firm IDC predicting a shortfall of 4 million IT developers by 2025.
In terms of venture capital investments in the region, the LAVCA Trends in Tech 2023 report noted that most major markets saw a slowdown in VC investments from 2021—from a 24% decline in Colombia to a 72% contraction in Argentina, while VC investments into Brazil fell by 60%.
However, it is worth noting that despite the decrease in investment activity, all major markets in Latin America still brought in significantly more capital than in 2020, with Brazil leading the charge.
VC investment in Latin America by country, 2019-2022
More and more businesses—particularly in the tech sector—are aiming to stay competitive in today’s changing markets by hiring foreign remote workers to boost the diversity of their workforces and by implementing embedded talent solutions to support efficient recruitment.
Embedded talent solutions available to businesses today include hiring a Professional Employee Organization (PEO), which manages HR tasks for employers that have local entities in the foreign country; an Employer of Record (EOR), which handles all HR services for companies without local entities; and the Total Talent Management (TTM) model, which advocates a more holistic approach for managing talent, with a focus on the value a worker can bring.
According to Market Growth Reports, the global EOR market size was valued at $1,890 million in 2022 and is expected to expand at a CAGR of 12.07% during the forecast period, reaching $3,745 million by 2028.
Companies from the US and Europe that are interested in recruiting in Brazil will benefit profoundly from the embedded talent solutions offered by platforms such as Remoti, which features built-in recruitment research services, efficient candidate interviewing solutions, and automated HR products for continued learning, combining people with technology to solve the talent dilemma in today’s global hiring landscape.
In the rest of the article, we will discuss:
[Wondering how to recruit in Brazil? Looking to hire top tech talent in Latin America? Schedule a call today with one of Remoti’s HR experts. With minimal cost and zero fuss, Remoti’s embedded talent acquisition platform takes care of the finer details so that you can focus on your bottom line.]
With many local and global recruiters’ eyes fixed on Brazil, the competition for onboarding exceptional tech workers is fierce, and to gain access to the wealth of talent in the Brazilian market, there are some tough challenges to overcome, including but not limited to:
As navigating the seas of Brazil recruitment can be tricky, many companies tend to turn more to PEOs and EORs—as well as embedded talent platforms like Remoti—for help in the delicate hiring process of global employees.
HR recruitment teams with the intention of recruiting in Brazil will want to be well-informed on employment contracts, labor laws, minimum wages, disabilities, severance payments, sick leave, and maternity leave, and employer and employee contributions (such as social security).
For more information on this part of the recruitment process, see our article on How to Hire Independent Contractors in Brazil without Headaches (2023).
What exactly are PEOs and EORs, and which one is the right employment partner for your business?
While both PEOs and EORs manage HR tasks such as staffing, payroll, benefits, and tax deductions and reporting, PEOs require the company to have its own legal entity in the country where they want to hire employees. Meanwhile, EORs can hire professionals on a company’s behalf in other countries even without their own legal entities in that country.
With a PEO, the company is responsible for its own compliance with international labor laws and enters into a co-employment arrangement involving the company, the PEO, and the employee.
On the other hand, an EOR will be the legal employer of the company’s new hires in other countries and will handle everything for the company, from hiring to payroll and employee development.
Enter the Total Talent Management model.
Instead of outsourcing recruitment processes to different external providers, TTM is an all-inclusive management system that adopts a holistic approach to serving businesses that are looking to efficiently grow their workforce by focusing on the value each worker can bring to the table.
The TTM system organizes your recruitment processes in one platform, handling talent acquisition, onboarding, compliance, and employee performance and development for both permanent (RPO) and temporary talent (MSP), allowing businesses greater flexibility in international markets.
An embedded TTM platform like Remoti provides cost-effective, streamlined HR solutions that include a network of over 50+ specialized talent scouts, bringing you a cost saving of up to 40% compared to in-house recruitment.
Total Talent Management with Remoti
At Remoti, our team of experienced tech recruiters will plug into your business, taking care of all the nitty gritty details in the recruitment process so that you can focus on the bigger picture.
With a detailed recruitment plan specific to your business, our Talent Scout service acts as your personal headhunter in Brazil, scanning pools of thousands of potential applicants, conducting background checks, factoring in personality and cultural backgrounds, screening candidates based on your company’s requirements, and preparing them for interviews with you.
Paying employees in different countries could pose potential hiccups for businesses looking to outsource or nearshore their workforces.
But today there is less need to handle all the legal details in-house — services like Remoti’s Payroll Solutions service will take care of it for you. Our legal experts ensure that you are fully compliant with local labor laws, tax payments, and employee contributions so that nothing stands in the way of scaling growth.
Our team of HR specialists will handle onboarding the talent you have selected, sort out taxes and legal procedures on your behalf while recruiting in Brazil, drawing up airtight employee contracts, and send seamless cross-border payments in US dollars into the Remoti wallet, which links directly to the worker’s bank account, making it easy for them to access their salaries.
Setting up employees’ monthly payments, deducting the proper tax, and making employer contributions is easy and doable with Remoti, right from the convenience of our Ti app.
At Remoti, we know that a company’s workforce is by far the most important resource of a business, and we are dedicated to the continued development of each employee.
With our People Products services, we offer automated HR products that reduce cost-per-hire rates, protect and grow the talent of your tech workers, upskill your workforce, provide automated data solutions for your company, and support a full employee life cycle, from hiring to professional growth.
Embedded talent platforms like Remoti are not just for companies looking to outsource or nearshore in countries like Brazil. Workers can benefit from the service, too, with special training sessions and an in-house EdTech program that can train them in key tech skills such as language, coding, and management (all available from the Ti app!).
But it is not just about recruiting and producing the top employees—it is also about producing and guiding happier and more productive employees.
Remoti also provides mental health support and coaching for your workforce, ensuring that they are fulfilled, motivated, and given the best chances to grow and advance their careers while supporting your business needs.
With a TTM provider like Remoti, recruiting in Brazil and other foreign markets is much less daunting, allowing you to drive your tech workforce forward with ease and confidence.
[Eager to expand your tech workforce but put off by the red tape of hiring workers in Brazil? Book a call with Remoti’s HR-as-a-service team today to take the first step toward expanding your talent pool in Latin America at minimal costs.