Tips For Hiring in Peru

After company formation in Peru, you will need to find employees. However, this is not always easy for a new entrant to the jurisdiction, meaning you should seek specialist advice. A good recruiter in Peru will have expert knowledge of the local market and an established recruitment network to tap into, so should be able to find strong candidates quickly. The IT/tech sector is seeing the most robust growth, so it’s no surprise that foreign companies and tech entrepreneurs are hiring in Peru in greater numbers.

Key takeaways

Hiring in Peru: What are the most in-demand jobs?

Global enterprises such as IBM, telecoms giant Telefónica, and international bank BBVA are among the companies looking to Peru and elsewhere in the region for:

• Systems engineers
• Senior product managers
• Product designers
• Software programmers
• Statistical analysts 

Government investments in Science, Technology, Engineering and Mathematics (STEM) education over the past decade have paid off, and Peru now has a thriving tech scene. It ranks in the top 10 countries with the highest per-capital levels of tech entrepreneurial activity (1 in 4 Peruvians have started a business in the past four years). Whether it is foreign companies or entrepreneurs who want to start a business in Peru, or are thinking of hiring software developers there, the jurisdiction has never looked better.

With large corporations scooping up all IT/tech workers in sight, the competition for small- and medium-sized enterprises (SMEs) in hiring software developers in Peru can be tough. Here are some things to keep in mind when it comes time to attract the top tech talent to your business.

Strategies for hiring tech talent in Peru

• Know what the average tech sector salary is, and try to beat it
• Provide a highly flexible remote/hybrid work environment
• Offer a path for career growth and development
• Keep in touch with those in the tech talent pool
• Don’t curtail your talent pool with excessive requirements

Foreign businesses and entrepreneurs must understand that in the current climate where demand far outpaces supply, tech workers can afford to be picky.

When a software engineer or product manager steps into your office or hops on a Zoom call, they are interviewing you as much as you are interviewing them. 

Top 5 tips for hiring in Peru

1. Offering a competitive salary is a must – The cost-cutting measures upon which offshoring and “nearshoring” is based will be less pronounced when hiring tech talent in Peru. Before hiring the top software developers in Peru, a company must first research the benchmark salary data to know how much he/she expects to receive. Offering a little more than average might just make the difference between an IT professional signing with your company instead of going with a competing offer.

2. Give the tech worker the freedom to work where they want – In some cases, this won’t be an issue, as many US/European companies that hire tech talent in Peru do so in a 100 percent remote work arrangement. But for companies that have offices in Lima or in other Peruvian cities, don’t force them to commute to the office each day if they don’t want to. One study from 2021 found that 87 percent of IT professionals want flexibility in where they work.

3. Offer tech workers a chance to grow and advance in the company – This tip is just as important as a competitive salary – maybe even more so. IT professionals tend to be more enthusiastic about joining an organization that offers the chance of upward mobility. Industry analysts have noted that many tech workers have taken jobs at companies that pay a little less than others, principally because the company gave them more opportunities for learning and professional development.

4. Keep in touch with local and international IT professionals – Companies must have a contingency in place for when their tech workers resign. Otherwise, these businesses will scramble to catch up to their competitors. Instead, build a network of software developers, engineers, and other tech talent to keep potential candidates engaged and intrigued about what the business is doing.

Send out a weekly newsletter about the SaaS your business just launched, and/or what business problem your new product can solve. Cultivating relationships with IT professionals can lead to hiring tech talent in Peru down the road.

5. Don’t curtail your talent pool with excessive requirements – This is especially important for SMEs that may not have the budget to go after the big fish in the tech talent pool. Take a second look at your job posting and strip down the “wish list” qualifications, revealing only the bare-bones requirements.

You’d like an IT professional who’s fluent in English, but is it necessary that your entire staff is bilingual? Consider hiring tech talent candidates in Peru that don’t check all the boxes. There’s always the option to upskill in house.

How much it costs to hire people in Peru

The cost of hiring in Peru 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 Peru now has a surfeit of graduates in the labor market that it cannot provide local jobs for. This means that the labor market in Peru is relatively competitive for an incoming prospective employer.

The minimum wage in Peru is S/1,130 (aprox USD$300). However, as discussed above, this is not necessarily the rate that you should be offering. In top sectors that require qualified and skilled workers. A local hiring expert in Peru 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 Peru must make social security contributions equal to 13% of an employee’s wage. The employer must withhold tax from an employee’s remuneration on a progressive tax scale. Peru also operates an aguinaldo system, meaning an extra month’s salary must be paid as a bonus annually.

There is also profit sharing. Companies with more than 20 employees have to share their annual pre-tax profits with their employees. Mining companies, wholesale entities, retail businesses, and restaurants have to share 8% of their profits. Manufacturing, fishery and telecommunication companies have to share 10% of their profits, and companies that do not fall in these categories have to share 5% of their profits with employees.

Two options for hiring: establish a company or PEO

When entering the market and hiring in Peru, 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 Peru 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 Peru may not be viable in the future.

The long-term option: direct hiring

This is the gold standard of hiring in Peru, 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 Peru, 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 Peru, you will be fully liable for compliance with local law.

A local expert will help when hiring in Peru, 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 Peru, 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 Peru 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 Peru. In Peru, this includes clear delineation of the extent of the work necessary to terminate a contract that is for a specific project.

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 Peru.

Labor laws and regulations in Peru

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 Peru. 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 Peru is eight hours, with the standard workweek up to 48 hours.
• Public holidays – There are 16 public holidays in Peru each year.
• Vacation time – Workers in Peru are eligible for 30 days of vacation annually, or half that in SMEs. Women are entitled to 98 days’ maternity leave.
• Contract types – There are essentially two types of contract in Peru, indefinite employment and fixed-term employment

FAQs on hiring in Peru

Based on our extensive experience these are the common questions we receive from clients when looking to hire in Peru.

Biz Latin Hub can help you with hiring in Peru

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 Peru, 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 Peru was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors.