With some of the lowest average salaries for IT professionals in Latin America, Colombia has quickly become a hotspot for those looking to hire top tech talent. According to the International Data Corporation, in 2019, Columbia became the fourth largest IT market in the region, right below Brazil, Mexico, and Chile.
Columbia shares a timezone with the U.S. (EST) and has a variety of top-ranked technological universities, making it prime ground for developing tech talent. The World Bank has also noted that the Colombian government is aggressively promoting foreign investment through tax incentives, Free Trade Zones (FTZs), and other hiring benefits.
According to Hire Remotely, Colombia continuously produces many software engineering graduates – around 13,000 per year. When it comes to specific roles, the most common include both back-end and full-stack developers. About 75% of engineers and developers in Colombia have graduated from college. And between 2001 and 2013, Colombia produced more than 340,000 IT professionals.
The average salary for software engineers in Colombia is $70,985,922 COP per year, or $18,397.64 USD. It’s important to note that this average is much lower than that of a software developer in the U.S., where the average yearly salary is $341,725,279.36 COP, or $88,566 USD. These low rates are a top consideration for those looking to hire experienced tech talent without breaking their budget.
Due to their limited experience, junior IT professionals (with two or fewer years of experience) are typically paid an average of $30,000,000 COP per year, or $7,775 USD, according to PayScale. Hiring a junior IT professional in Colombia is an excellent option for companies looking for help with a project, but finding a mid-level or senior employee is typically better for those hoping to find a project lead who needs minimal supervision.
With around 3-5 years of experience, mid-level IT professionals can be trusted with additional responsibilities, working on projects beyond a junior professional’s expertise. Hopefully, these team members can shoulder some of the burdens of training and onboarding junior developers. You can expect to pay a mid-level IT professional from Colombia $78,000,000 COP, or $20,215 USD per year.
Often heads of major projects or entire IT teams, senior professionals typically have experience in various technology areas, from development to testing. As a result, these employees are perfect for teams hoping to hand over a multitude of responsibilities. With their qualifications, senior IT professionals in Colombia have an average yearly salary of $96,000,000 COP or $24,880 USD.
Things to Remember
Before hiring in Colombia, there are a handful of things your organization should take into account, so you can ensure you comply with all labor laws and requirements. Here’s what you need to know.
With a diverse population, Colombian citizens speak more than 100 languages. However, over 99% of Colombians speak Spanish, the country’s official language. Therefore, if hiring in Colombia, you’ll need to consider the language barriers you may encounter should your company or team members solely speak English. In fact, only around 4% of Colombians speak English, so businesses that aren’t bilingual in English and Spanish should arrange for a translator if hoping to hire tech talent here.
Pay & Compensation
Colombia has a 48-hour workweek, with hours typically spread across six 8-hour days or five 9.6-hour days. Sunday is a designated rest day. The legal yearly minimum wage is $8,279,448 COP, or $2,145.81 USD.
Employees can also work up to 12 hours of overtime each week. All employees are entitled to a 25% increase in their regular wage when working during the day. If working between 10:00 p.m. – 6:00 a.m., team members are allowed a 75% increase in their standard wage. Finally, if an employee works overnight hours that aren’t considered overtime, they’re still entitled to a 35% increase in their regular rate.
Colombians are entitled to 15 days of paid vacation for every year of work. However, they’re required to use six days throughout the year and can roll over their unused days to the following calendar year.
With 18 total public holidays, Colombians are also entitled to take these days off. This number is significantly higher than many countries. If an employee must work on a holiday, they’re entitled to 1.5x their regular wage.
In Colombia, employers who hire must withhold a portion of each employee’s paycheck to go to taxes, social security, and pension. Colombia’s income tax rate is currently 39%. Social security in this country includes healthcare, occupational risk, and a family welfare fund. Employees and employers both contribute to the healthcare aspect, while employers are solely responsible for occupational risk and family welfare.
Like other Latin American countries, all Colombian employees are entitled to a bonus equal to one month of their total yearly salary. However, unlike other countries in Latin America, workers in Colombia receive half of this bonus in June and the other half in December, versus all of it in December. In addition, other bonuses may be presented depending on the employer, though not required.
With a highly-ranked healthcare system, Colombian employees have access to universal public healthcare. Because of this, employers are not required to provide employees with health insurance, though they may do so through private medical plans. These private plans can often be used as an additional incentive for hiring in Colombia.
There are various reasons why hiring in Colombia is beneficial for growing companies, including:
Highly Skilled Talent
To expand your reach and make a more significant impact, your company should be looking to hire team members who are capable, confident, and willing to grow alongside you. Fortunately, IT professionals in Colombia are known for doing good work. As a result, the country has invested in its IT market, encouraging foreign businesses to hire in Colombia.
Plus, with more than 10,000 IT graduates per year, there’s no shortage of junior-level talent to choose from. This means lower costs for your organization, as you can work with new professionals eager to broaden their work experience.
Sharing a timezone with the U.S. means that workers in Colombia can easily collaborate with team members outside of their native country. This allows for prompt communication and minimizes the risk of missing deadlines.
Colombia’s proximity to the U.S. also allows for easy travel between the countries, should your developer need to meet with you in person. In addition, the time they spend traveling is much less than the hours required for those from Asian or European countries.
Cutting hiring and operating costs is a top goal for growing companies. Reduced costs are another benefit of hiring in Colombia, as average salaries are significantly lower than those for IT professionals in the U.S. With low wages and highly-skilled talent, organizations are often impressed by the value their company receives when recruiting Colombian IT workers.
Using an Employer of Record
One of the best ways to get started with hiring and outsourcing in Colombia is by using an Employer of Record (EOR). An employer of record (EOR) is a company who hires, manages HR and payroll, and pays local taxes for your company’s remote employees. Unlike a payroll company, an EOR takes on all the risks and liabilities since, on paper, they are the legal employer.
Your company, however, still manages the day-to-day of the employees and makes all hiring and termination decisions – all without the burden of managing payroll, HR, and taxes or the worry of violating local labor laws and regulations.
By utilizing an EOR, your business can save time, money, and the typical headaches that come along with hiring and outsourcing. If you’re hoping to get started with an EOR in Colombia, here’s what you need to do.
Clarify Your Goals
First, think about the problems you’re looking to solve when using an EOR in Colombia. What metrics are you hoping to reach? What goals are you aiming for?
Maybe you’re focused on cost-efficiency or scaling – regardless, keep these goals in mind as you search for your hiring partner. Then, as you conduct your search, you can inform each potential organization of your goals so they can provide adequate solutions.
Find the Right Partner
To truly reap the benefits of an EOR, you need to work with the right partner. Different companies have different experience levels, so it’s vital to conduct thorough research and get to know a handful of organizations before deciding. Find a partner who handles communication, contracts, and all legal requirements specific to Colombia.
Remember: The right EOR partner will make your life easier, not harder. They should be prepared to handle salary raises, extensive paperwork and filing, and termination rules.
CodersLink will manage benefits, training, paid travel, and more. We’re here to ensure your company can impress and retain the top talent it needs to thrive – without lifting a finger.
Look for a partner like CodersLink that keeps your goals in mind and makes the entire outsourcing process easier from day one.
Hand Over the Reins
After you’ve chosen the right partner, you can then sit back, relax, and let them help build your team full of Colombia’s top tech talent. If your partner is well-qualified, this is the easy part. With an EOR, you can focus on doing what you love, knowing you’re building a team that supports your growing business. And countries like Colombia are an excellent choice for reducing fixed costs and recruiting skilled developers.
At CodersLink, we’re here to help you hire in Colombia, ensuring all laws are met, and you feel excited about the team you’re building. Our experienced professionals are passionate about what they do and are eager to connect your company with skilled developers throughout Colombia. In addition, we pride ourselves on staying up-to-date with all technological developments in both the U.S. and Latin America, so you can rest easy knowing your team is full of knowledgeable IT professionals.
If you’re hoping to move forward with hiring in Colombia, starting with an Employer of Record is smart. And that’s exactly what we’re here to help with. With an all-hands-on-deck approach, we’re here to make sure your team is working like a well-oiled machine. Send us a message today to get started!