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. After company formation in Panama, you will need a good workforce.
Key takeaways
| What are the key sectors in Panama? | IT and tech Healthcare Banking and finance Real estate |
| What are the steps to hiring in Panama? | A local advisor can help you with: Job adverts Networking CV assessment Interviewing Contract writing Onboarding |
| Is PEO legal in Panama? | Fully legal in the country, known as contratista de personal |
| What is the minimum wage in Panama? | The current minimum wage as of January 2025 varies widely according to sector, from USD$341 to USD$1,015 per month. Average is around USD$636. |
| What contributions do employers have to make in Panama? | Employers must pay into the social security fund ans well as an unemployment fund and an education fund. This works out at around 16.75-21.5% of gross salary. |
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: High demand for tech sector jobs
Some of the most prominent sought-after profiles in positions related to the technology sector 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.
How much it costs to hire people in Panama
The cost of hiring in Panama is less than it would be in richer nations, yet workers are often well qualified and skilled. With significant investment in education over a number of years, the Panama now has a surfeit of graduates in the labor market that it cannot provide local jobs for. This means that the labor market in Panama is relatively competitive for an incoming prospective employer.
The minimum wage in Panama is USD$341, but there is a wide range of minimum wages depending on sector and role among other factors. These exceed USD$1,000 per month in some cases. However, this is not necessarily the rate that you should be offering.
In top sectors that require qualified and skilled workers, you will need to offer at least market standard rate, where a minimum wage is usually around USD$636. For quality workers you will have to offer more. A local hiring expert in Panama will be invaluable in making sure that you are not overpaying or offering unattractive rates that make it hard to recruit quality talent.
Employers in Panama must make social security contributions equal to betweeen16.75-21.5% of an employee’s wage. The employer must withhold tax from a employee’s remuneration on a progressive scale. A yearly bonus must also be paid, equalling a month’s pay paid at three points in the year.
Two options for hiring: establish a company or PEO
When entering the market and hiring in Panama, there are essentially two options available to investors and entrepreneurs. The most common way of doing so is through full company formation to establish a presence in the jurisdiction. However, this may take time and effort, meaning that it is worth considering another option as well, using a Professional Employer Organization (PEO).
PEO: fast and agile
A Professional Employer Organization (PEO), also known as a ‘Registered Employer’ or ‘Employer of Record’, is an organization that provides and supports companies with their human resources functions, from the early stages of recruitment to the payment of taxes and benefits. PEOs undertake the fundamental and time-consuming tasks of human resources teams, allowing companies to focus on the growth and success of their business.
The services of a PEO are particularly useful when businesses seek to hire a local workforce but do not wish to establish a local legal entity. Simply put, a PEO makes it easy to hire staff in Panama through an outsourced provider. It means you can enter the market and start hiring quickly, without having to commit to full entry until you are sure that it is what you want to do. It is worth noting that regionally there is beginning to be more regulation and PEO in Panama may not be viable in the future.
The long-term option: direct hiring
This is the gold standard of hiring in Panama, as it will give you full control over your employees as well as being sure that you will be compliant for the long term. It also gives you a higher status with potential job applicants, who will see you as a more secure long-term employer.
Before you start hiring employees in Panama, you will first need to get a sense of the legal, financial and cultural lay of the land. Things such as how to sort out the red tape associated with incorporation and how to manage payroll, for example. With a permanent legal presence in Panama, you will be fully liable for compliance with local law.
A local expert will help when hiring in Panama, as they will have an extensive network of qualified professionals for top jobs as well as a good idea of the local labor market. They will be able to advise on the best rates to offer and what type of profile you should be targeting. With anti-discrimination legislation important in Panama, especially for top jobs, they can make sure you are making a fair offer which complies with local law.
After placing adverts and receiving applications, you will want to move towards interviewing potential candidates. This should be done by both a team manager and HR representative at minimum, to make sure that everything is watertight in legal terms. You may want to include other people into the process in order to make a better assessment of the candidate.
It is entirely possible that you may wish to have a second interview, possibly involving other team members as discussed above. It is also common in the region and when hiring in Panama to provide candidates with an aptitude task to be completed. This usually takes the form of a dummy task that simulates the type of job that will be done in the future and confirm that they possess the skills cited on their CV.
Contracts, too, will be important. A local advisor will be up to speed on what you can and cannot offer. Bear in mind that you will have to follow all the rules established by Panama. In Panama, this includes clear details of when termination will occur for fixed-term or project-based jobs.
Finally, your local advisor will be able to help you with the stages of both the hiring and onboarding process. They will make sure that you comply with standard requirements such as compulsory medical checks and make sure that any probation period is within the boundaries of those established by the labor law in Panama. This is generally 2 months.
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 employers and employees in Panama. 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 in Panama is eight hours, with the standard workweek up to 48 hours.
- Public holidays – There are 12 public holidays in Panama each year.
- Vacation time – Workers in Panama are eligible for 30 days of vacation annually. Women are entitled to 14 weeks’ maternity leave, 6 before the due date and 8 after.
- Contract types – There are essentially two types of contract in Panama, indefinite employment and fixed-term employment.
FAQs on hiring trends in Panama
Based on our extensive experience these are the common questions we receive from clients when looking to hire in Panama.
1. Why hire talent in Panama?
Hiring in Panama offers access to a large talent pool that is located in the same time zone as the North American market, is culturally similar, and is more economical. The combination allows a company to complement an existing North American based team or to establish an independent nearshoring center within the region.
2. Can I hire top talent in Panama?
Yes, you can hire top talent in Panama, often at more competitive prices than in your local market.
3. What is the level of English for professionals in Panama?
The level of English in Panama may not be the highest, but in key white collar sectors it is much better. University graduates are expected to complete English language proficiency to at least an intermediate level.
4. How many software developers are there in Panama?
Some of the most prominent sought-after profiles in positions related to the technology sector 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.
Biz Latin Hub can help you with hiring in Panama
At Biz Latin Hub, we offer a comprehensive range of market entry and back-office solutions across Latin America and the Caribbean.
With offices in key cities across the region, along with trusted partners in other markets, our extensive reach makes us well-suited to support cross-border operations and multi-jurisdiction market entries.
As well as knowledge about hiring 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 doing business in Latin America and the Caribbean.
If this article on tips for hiring in Panama was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors.
