5 Mistakes CTOs Make When Hiring Remote Developers in LATAM

Building distributed engineering teams in LATAM is increasingly popular among US and Canadian tech companies. The region provides skilled, reliable, and cost-effective developers. However, hiring remote in LATAM requires understanding legal, cultural, and operational differences. Genty Recruitment, helped numerous companies establish successful nearshore teams in Latin America. Based on this experience, we’ve identified five common mistakes CTOs make when hiring remote software engineers in LATAM — and how to avoid them.

Why LATAM Is a Top Choice for Remote Hiring

LATAM combines strong technical education, cost advantages, and timezone overlap with North America. Companies gain access to developers familiar with remote work LATAM environments and distributed teams. Advantages of Hiring Remote Engineers in LATAM:

• Access to LATAM tech talent experienced in modern tech stacks.
• Timezone alignment with US working hours for real-time collaboration.
• Lower cost of hiring in LATAM without compromising quality.
• Good English communication and cultural compatibility with North American teams.
• Ability to scale teams quickly through nearshore recruitment or EOR solutions.

Mistake #1: Ignoring Legal and Compliance Issues

Many CTOs underestimate legal and compliance complexity when hiring in Latin America. Each country — Brazil, Mexico, Argentina, Colombia, Chile — has unique rules for contracts, taxes, and labor regulations. Potential Issues:

• Misclassifying employees as contractors.
• Failing to follow local regulations on payroll and benefits.
• Lack of clarity on IP rights and termination policies.

Solution: Work with a reliable LATAM recruitment partner. Genty Recruitment guides you on compliant direct hiring and can connect you with trusted EOR partners to handle employment and payroll when needed  so CTOs can focus on building great teams.

Mistake #2: Overlooking Cultural Fit and Communication Styles

Technical skills alone do not guarantee team success. Ignoring cultural fit and communication styles often causes misunderstandings and low productivity. Consequences:

• Miscommunication across distributed teams.
• Frustration due to unclear expectations or feedback methods.
• Difficulties integrating developers into existing processes.

Solution:

• Include communication and English proficiency assessments.
• Discuss feedback preferences and working styles early.
• Schedule overlapping hours for better timezone alignment.
• Provide structured performance reviews and open channels for questions.

LATAM developers value trust, clear direction, and consistent communication, making cultural alignment essential.

Mistake #3: Focusing Only on Cost Savings

While the cost of hiring in LATAM is lower, prioritizing price over quality often backfires. Common Consequences:

• Hiring underqualified developers.
• High turnover due to limited career growth or engagement.
• Hidden costs from rehiring and lost productivity.

Solution:

• Balance cost and skill when developing a CTO hiring strategy.
• Offer competitive compensation and opportunities for professional growth.
• Focus on building reliable distributed teams, not just saving money.

Mistake #4: Skipping a Structured Recruitment Process

Rushing hiring without proper screening leads to mismatches and inefficiencies. A structured recruitment process filters candidates effectively and ensures long-term team fit. Key Steps:

1. Define technical and cultural requirements.
2. Conduct coding tests, behavioral interviews, and soft skill assessments.
3. Check references and past project performance.
4. Partner with nearshore recruitment experts for local insights.

Genty Recruitment combines rigorous screening with market knowledge, reducing time-to-hire and improving team reliability.

Mistake #5: Neglecting Retention and Career Growth

Hiring is only the first step. Developers in LATAM stay longer when companies invest in retention strategies, clear career paths, and strong onboarding. Risks of Neglecting Retention:

• Increased turnover within the first year.
• Low engagement and productivity.
• Difficulty building cohesive distributed teams.

Solution:

• Offer structured career progression and learning opportunities.
• Provide regular feedback and recognition.
• Maintain an inclusive onboarding process.
• Support talent retention in LATAM through fair compensation and flexible work models.

LATAM vs Eastern Europe: Key Differences for Remote Hiring

Aspect	LATAM	Eastern Europe
Timezone	Matches US hours	Matches EU, less overlap with US
English skills	High in major tech hubs	Varies by country
Cultural fit	Collaborative, relationship-driven	Task-focused, direct
Cost	25–40% lower than US	20–30% lower than US
Legal complexity	High variation by country	Moderate, more uniform
Talent availability	Growing rapidly	Established but saturated
Nearshore advantage	Real-time collaboration	Mostly offshore

 

How CTOs Can Avoid These Mistakes (Checklist)

Compliance & Legal

•  Partner with an EOR or trusted agency.
•  Ensure contracts and payroll follow local regulations.

Cultural & Communication

•  Evaluate communication style and English skills.
•  Align working hours and expectations.

Cost & Value

•  Balance affordability with quality and experience.
•  Focus on long-term engagement, not just savings.

Recruitment Process

•  Implement standardized technical and cultural assessments.
•  Leverage recruitment partners for faster sourcing.

Retention

•  Develop career growth and learning opportunities.
•  Provide feedback, recognition, and strong onboarding.

FAQ: Hiring Remote in LATAM

1. What are the main compliance risks? Misclassifying employees, ignoring taxes, and failing to follow labor laws. EOR services simplify compliance.
2. How do I ensure retention? Provide career growth, competitive pay, feedback, and recognition.
3. How much does hiring in LATAM cost? Typically 30–50% less than in the US, depending on seniority and country.
4. How fast can I hire remote developers in LATAM? Structured recruitment allows hiring in 2–4 weeks.
5. Do I need a local entity to hire? No — nearshore recruitment or EOR models handle legal and payroll matters.
6. Why use a recruitment agency? Local expertise in LATAM helps CTOs hire efficiently, manage compliance, and build reliable distributed teams.

Conclusion

Hiring remote software engineers in LATAM provides cost efficiency, skilled talent, and timezone alignment. Avoiding these five mistakes — compliance issues, cultural mismatches, overemphasis on cost, skipping structured hiring, and neglecting retention — ensures scalable, high-performing teams. Genty Recruitment supports CTOs in building distributed teams in LATAM, offering compliance guidance, recruitment expertise, and retention strategies for long-term success.