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  • Writer's pictureCraig Wake

Is the LATAM Nearshore Market Sustainable?

Updated: Oct 28, 2022

Latin America is fast becoming a technology hub for investors, entrepreneurs, and career minded technologists. But what is behind the facade of this insurgence of interest?

One thing is for sure, as nearshoring continues to grow in popularity, so will the demand on the talent pool. The principal behind it arose from the same idea as offshoring, but with companies looking to leverage many of the same benefits as offshoring, but without the complicated contracts with minimums, complex operating structures, or time-zone complications.

In the past 5 years the LATAM market has become the obvious hub for clients to find and augment their teams with extra technologists or even to build development and support centers, especially for North American organizations. But as the awareness and demand grows, will we begin to see a saturation point?

Our assertion is that we will see this slow down in talent growth at the earliest part of the talent development funnel within the next several years and that public and private education needs the help of industry to improve the readiness of graduates.

"Countries need to help students reach their potential by the creation of high-quality, diverse programs that equip them for success in the technology labor market - and they need the help of industry to get there.", 2021

Higher education is available today to more young people in Latin American and the Caribbean (referred to as LAC) than at any other time in the region’s history. Now, this improved access is clearly a positive improvement, but it does not guarantee the quality education countries need to capitalize on this momentum - and this is the root of the problem, especially in the technology markets. Countries need to help students reach their potential by the creation of high-quality, diverse programs that equip them for success in the technology labor market - and they need the help of industry to get there.

In order for the talent funnel to grow sustainably and help LATAM continue to become the next powerhouse of tech talent for the rest of the world, four things need concentrated investment.

  1. English language penetrating secondary and higher educations as a core subject and learning method for public as well as private institutions.

  2. Tailoring technology-focused higher education courses to be relevant to market demand.

  3. Embedding practical learning focused on industry trends and demands into higher education programs.

  4. Sponsorship and support of organizations that enable talent to work with more developed nations.

According to research performed between HOLON IQ and the Inter-American Development Bank (across 100 LAC institutions in 14 countries), there has been a notable rise in enrollment rates between 2014 and pre-COVID, especially in those from underprivileged backgrounds enrolling in technology focused learning paths.

Copyright, 2022 - HOLONIQ.

This increased equity in enrollment however important is not translating into graduation, with less than 40% of enrolled students in technology programs going on to graduate, and furthermore, a very high proportion are unable to secure work in the technology market due to economic market maturity in the LAC region.

Our research has show that those graduating from technological disciplines cite that their secondary education did not set them up for success or steer them towards technology disciples.

We also found that higher education technology programs left them with a limited understanding of what they needed to learn to be relevant in the industry, with limited focus on practical experience. Many organizations that choose to invest in these graduates are localized and do not have training and investment programs. This leaves a large proportion of graduates with a choice - diversify away from technology, or take less relevant position.

Whilst there is a high proportion of experienced technology talent in the market, its the renewal of the pipeline that is needed over the coming years.

Nearshore professional services organizations are a critical part in combatting these challenges early in the lives of our future graduates, to ensure that at the end of the graduation funnel students are more relevant and ready. This will continue to contribute to growth and equitable access to stronger financial futures in LATAM, but not without some adjustment and investment in the early talent development process.


What we are doing at Proactiviti

At Proactiviti we believe that nurturing a garden of talent early in its life is critical to ensuring that it continues to blossom for the long-term.

We are creating a nearshoring model that serves simply two goals:

  1. Enabling equitable access for organizations in North America (and beyond) to professional services talent that can help them grow and achieve.

  2. Creating equitable access to technology careers for the LATAM population by connecting them to rich and diverse economies and project opportunities.

Our nearshoring model is mutually beneficial to our clients and our LATAM communities.

You can learn more about our approach strengthening the prospects of graduating students in LATAM, IDE&E, and how this continues to benefit our clients by visiting our "IDE&E" and "Why Work with Us?" pages.

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