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Most first LATAM hires fail on the admin, not the person: what it actually costs, what you’re legally on the hook for, and which next steps fit a company making its first hire in Latin America.
A U.S. creative agency came to us after running into a wall with freelancers. Freelancers worked fine for quick projects, but they were never consistent. People would vanish between jobs, their schedules changed constantly, and the agency was wasting weeks retraining new people over and over.
They decided it was time to try nearshore hiring and bring on full-time help. But hiring your first LATAM employee without local support can turn into a headache fast. They hired a regular recruiting firm that sent over a random mix of candidates. Within a few weeks, the agency had hired five people across three different South American countries: two graphic designers, a junior art director, an account manager, and a copywriter.
Everything went sideways pretty quickly:
They set out to build a cost-effective remote team, but ended up with zero retention and a lot of wasted time and money.
What went wrong?
Hiring your first LATAM employee is usually not a sourcing problem, sourcing is the easy half. It’s an employment problem, and almost every company that gets burned gets burned on the same five things when hiring remotely.
Three reasons, and only one of them is money.
The first is timezone alignment. A team in Guatemala works Central Time. That's the same working day as Chicago, an hour off New York, and a window that still overlaps a European afternoon. Nobody's answering messages at midnight. Nobody's waiting until tomorrow for a yes. For a creative or operations team, where the work's a hundred small handoffs a day, that single fact outweighs almost everything else.
The second is depth. Latin America has spent a decade building exactly the functions growing companies need most: design, marketing, creative operations, customer success, finance, support. LATAM professionals have run these functions before, often for US companies, so your expectations of their work can be high, and they’ll deliver.
The third is cost, and it is real: companies typically save 50–70% against an equivalent US or European salary. But here’s what we like to tell our clients: cost's the reason people start looking, not the reason it works. The companies that hire well in LATAM do it because the team is better, and the savings are what let them hire two instead of one. Take it from us! We have a couple of clients who have hired 10+ people this way, which proves this is an awesome way to grow.
Sounds like something you should try? Let's talk about how we can help→
The most common first move is also the most expensive: sign them as a contractor, pay them monthly, call it done.
It rarely holds. If someone works your hours, uses your tools, reports to your manager and does your core work, most labor authorities in the region will look at that relationship and see an employee, whatever the contract says. The exposure's not theoretical. After a certain time, an employee could have claims and represent liability risks for a company who hires abroad.
The test is simple and worth applying honestly before you hire: are you buying a deliverable, or are you buying someone's week? If it is the week, you're hiring an employee and should structure it as one.
Every country in the region layers statutory obligations on top of gross pay, like mandatory bonuses, social security contributions, paid leave, severance provisions. These aren't negotiable extras. They're the job.
"LATAM" is not a market. It’s twenty of them, and they differ on the things that matter: timezone alignment, labor law, currency stability, English proficiency, talent depth by function.
Timezone's the one founders underweight and regret. A two-hour drift sounds trivial on paper and is felt every single day in practice.
When companies look at Latin America, they usually look at Colombia, Argentina, or Mexico first. Those are great places to hire, but those markets are crowded right now. Salaries are spiking, and recruiters are constantly trying to poach your people.
When we talk to founders about hiring in Guatemala, we focus on three simple facts:
Your payroll system almost certainly doesn't run in Latin America. Your bank's international transfers will arrive, eventually, with fees taken off the top and an exchange rate nobody agreed to. Your new hire, meanwhile, needs a payslip that satisfies their own tax authority.
None of this is unsolvable. All of it is a monthly job that someone has to own, and it doesn't go away as you add people…it multiplies.
We know you’ve heard the horror stories! The hire's good, the work's fine, and four months in they leave for someone who made them feel like part of a company instead of a line item.
Remote hires who stay are the ones who were onboarded like local hires: a manager who runs real one-to-ones, inclusion in the meetings where decisions actually happen, a career conversation that goes beyond this quarter.
↗️ At Zcaler, our Head of People Operations stays in regular contact with both sides. We don't wait for an annual review to figure out if someone's unhappy or falling behind.
First, we talk directly with the managers on the client side. These check-ins are quick and practical. We ask: Is the team hitting deadlines? Is communication smooth on Slack and in meetings? Are there any small habits or misalignments starting to creep in? The goal is to catch little frustrations early, before a manager feels like throwing their hands up.
Second, we run sessions with our team members. We ask how they're feeling about the role, whether they're getting clear direction from their manager, and if any technical blockers are slowing them down. We also give them a safe space to flag personal issues, burnout, or anything else that might impact their day-to-day work.
Because we speak with both the client manager and the employee, we can see the full picture.
Doing this for the first time? This is the order to do it in.
Remember the mess the creative agency in the US was in? About six months later, we sat down with their leadership. The issue was never the quality of LATAM remote talent. The problem was how they set things up. If you want to hire LATAM employees who stay for the long haul, you cannot just hire isolated contractors sitting in separate countries with no shared support.
They changed their approach completely. Instead of scattering people across South America, they built their entire team with us in Guatemala.
Today, that agency has a 7-person team that has been working with them for over 14 months, and they have had zero turnover.
The biggest win was putting the whole team together in a shared, professional office in a hybrid work setup. They still talk with the U.S. team every day on Slack and Zoom, but sitting next to each other for some time each week makes a huge difference. When a designer gets stuck, they can ask the art director sitting at the next desk right away. They feel like a real team, and they're now a core part of the agency's daily business.
How long does it take to hire in LATAM? Most roles fill in two to four weeks end to end. Urgent searches can produce first candidates in under seven days.
How much do companies actually save? Typically 50–70% against an equivalent US or European salary, with no drop in quality.
Which roles work best remotely from LATAM? Creative positions such as design, marketing, creative operations, customer success, finance, sales and support. If the work can be done remotely, it can be staffed remotely.
Do I need a legal entity in the country? Not if you hire through a partner who already has one. You would need one to employ people directly.
What happens if the hire does not work out? If someone turns out to be the wrong fit in the first 90 days, we replace them. The client doesn’t pay an extra sourcing fee, and we do not leave them high and dry.
The real benefit is how much better that process gets over time. Every week we collaborate with a client, we learn their communication habits, their working style, and what kind of personality clicks with their team. If a hire doesn't work out, the replacement search isn't starting from zero. It's faster, sharper, and much more dialed in to what they need. We take the hiring risk off their shoulders so they never feel trapped with the wrong hire.
🌎 Building your first team in Latin America? Tell us the role and we’ll help you map out a hiring plan. Build your team →