Some say that Venezuela is currently in the throes of transformation. Others call the situation what it really is: a crisis.
According to one recent study, a massive four million people have already left the country for places like Colombia and elsewhere in Latin America—largely due to political unrest in the wake of President Maduro’s highly controversial re-election. To make matters worse, hyperinflation in the country has reached a staggering 10 million percent, causing many experts to agree that some type of drastic “shock therapy” may be the only way to undo the economic damage in Venezuela. Rapid currency devaluation, a lack of food and other essential items, and equally devastating problems continue to plague the country.
But what does this mean for firms considering an international expansion into Latin American countries like Colombia? While Venezuela may be a regional economic, social, and political powder keg, Colombia and other countries still offers ambitious firms numerous expansion opportunities.
Hiring in Latin America: What Employers Need to Know About Venezuela
Maybe the most impressive thing about Venezuela as it stands today has to do with the country’s importance within the oil industry. Venezuela is the home to the largest oil reserves anywhere, and its economy has long been tied to the international price of oil. Petroleum also makes up an incredible 25% of the country’s gross domestic product, coupled with 95% of its exports—despite the fact in 2019 that Venezuelan oil production hit its lowest levels since 2003.
But beyond sluggish oil production, Venezuela is home to a massive amount of highly skilled workers, particularly engineers and others that require specialized qualifications within the petroleum industry. The energy sector itself is only producing a small portion of the potential four million barrels of oil a day that it could be—meaning that many of the workers that should be filling those positions may be available for employment by an international company.
Additional Considerations for Colombia
It’s equally important to note that Colombia currently stands as the main destination for Venezuelan migration, due in large part to the flexibility that it has had in terms of immigration policies. Firms should, however, concern themselves with making sure that they are hiring employees in a fully compliant way.
After creating a written employment contract that outlines the position for the new employee, employers must then enroll that new worker in Colombia’s social security system; this is mandatory. The employee will then be able to choose from nine different options in terms of their health insurance plan and will be able to pick from five different pension entities, too.
At that point, the employer will need to enroll the employee in a labor risk entity for professional risk and worker’s insurance. Finally, the new employee will need to be enrolled in the welfare entity as well. Then the foreign employee will also require a valid Colombia Work permit before they can begin their job in earnest.
Ease the Stress of Building Your Global Team with an Experienced Expansion Partner at Your Side
Indeed, all of this helps to shed light on what is perhaps one of the most significant challenges when expanding a business abroad: guaranteeing that all employees are hired compliantly. Hiring in Colombia (and hiring around the world, in general) can be a complex process—particularly for companies in the middle of expanding into more than one market.
If your firm is considering hiring in Colombia, reach out to Velocity Global today. With global expansion capabilities in more than 185 countries, our International Professional Employer Organization (PEO) solution can help you hire the brightest talent in virtually any market—without worry of misclassified workers.
Want to learn more about how Velocity Global can help you source and hire top talent around the globe? Or how we can assist you in establishing an overseas presence in as few as 48 hours?