When it comes to post-pandemic growth, the small yet economically savvy nation of Panama has fared far better than its neighbors in the region. The country’s GDP grew from 67.41 billion in 2021 to 76.52 billion in 2022, amid a lifting of COVID restrictions and a reopening of the tourism sector. These figures are encouraging, as are the most recent forecasts on hiring trends in Panama for the coming years.
Employers expect a strong labor market in the coming years, with 38 percent of Panama-based respondents saying they plan to hire, according to a study released by the recruitment firm Manpower Group. These positive hiring trends are likely to continue for the foreseeable future.
Panama’s economy has not only developed but evolved, and has moved steadily toward the banking and financial service sectors – which accounts for roughly 80 percent of the nation’s GDP. When it comes to hiring trends in Panama, it’s no surprise that the most in-demand jobs have been and will continue to be IT/tech related jobs.
Hiring trends in Panama: High demand for tech sector jobs
A study in 2022 compiled a list of the most sought-after profiles in positions related to the technology sector. Some of the most prominent are:
- Data scientists/engineers.
- Scrum master.
- Business analyst (IT).
- Cloud computing systems architects.
- Full stack developers.
- AI and machine learning experts.
- Cybersecurity software developers.
- Designers and digital content creators.
- Digital marketing ‘growth hacking’ specialists.
With demand outpacing supply in terms of Panama’s IT/tech worker labor pool, competition for the best human talent is heating up, and this trend will continue in the coming years. Many firms are likely to turn to services offered by headhunters in Panama to seek out and hire such talent.
What are the most hired professional sectors in Panama?
Panama ranks as the 62nd freest economy globally. The Panamanian economy heavily relies on the service sector, driving a surge in demand for technical and communication skills, notably in transportation, finance, and IT. Professionals with expertise in these areas are sought after for roles such as bankers, sales associates, and human resource managers. In the agricultural sector, family farmers predominantly dominate.
- IT Sector.
- Health sector.
- Banking sector.
- Real States.
Hiring trends in Panama: Labor rules and regulations
Before making a move into the jurisdiction, it’s important for companies to understand the labor rights and responsibilities of both Panamanian employers and employees. What follows are a few things that foreign business owners should know about when it comes to the local work culture:
- Work hours – The standard workday is eight hours, with the standard workweek up to 48 hours.
- Public holidays – There are 22 public holidays in Panama each year, but it’s not as bad as it sounds. Some of those fall on a Saturday or Sunday.
- Minimum wage – Panama is a dollarized economy, and the minimum wage varies by industry, work location, and other factors. The minimum wage ranges from USD$275 to USD$971 per month.
- Vacation time – Workers in Panama are eligible for 30 days of vacation following 11 months of uninterrupted work, or one day for every 11 days of work. Women are entitled to 14 weeks’ maternity leave.
- Social security contributions – Employers in Panama must make social security contributions equal to 12.25 per cent of an employee’s wage, and withhold 9.75 per cent on the employee’s behalf then remit it to the authorities.
- Payroll tax – The employer must pay educational insurance tax at a rate of 1.5 per cent of an employee’s remuneration. The employer also pays workers’ compensation insurance premiums at rates ranging from 0.56to 5.67 per cent of remuneration.
Steps to incorporating a Company in Panama
For years, the small Central American nation of 4.3 million people has been a popular destination for foreign companies and investors alike. But there’s a caveat: firms wishing to take advantage of hiring trends in Panama must first set up a physical presence in the country.
Here is a quick overview of the steps foreign companies must take to incorporate in Panama. For a more detailed explanation, read our previous article on the subject.
- Assign power of attorney
- Create company bylaws
- Register the company name
- Obtain a company Tax ID Number
- Acquire a commercial license
- Open a corporate bank account
When it comes to hiring trends in Panama, as well as company incorporation, the jurisdiction boasts one of the most straight-forward processes in the whole region. But like any move into a foreign market, the process can be confusing if you’re unfamiliar with the peculiarities of a foreign country. For this reason, it’s best to seek the legal, financial, and administrative expertise of a PEO like Biz Latin Hub.
Biz Latin Hub can help you with hiring trends in Panama
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.
Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
As well as knowledge about hiring trends in Panama, our portfolio of services includes hiring & PEO, accounting & taxation, company formation, bank account opening, and corporate legal services.
Contact us today to find out more about how we can assist you in finding top talent, or otherwise do business in Latin America and the Caribbean.
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