The rise of telecommuting, the exchange rate market and the very good Argentine human capital generated a curious phenomenon in the world of software: there is more and more demand from abroad to hire Argentine programmers, but many of the dollars they charge never reach the country. Among companies that develop computer systems and the knowledge economy, where big names coexist but also many SMEs, they speak of “unfair competition” by those who take the services of professionals from abroad thanks to the fact that they do not have to face the high labor costs that a company has in Argentina.
How is it that Argentine talent and the foreign exchange it generates escape? Many foreign companies, from a Wall Street bank to a startup, contact developers employed in Argentine companies through the networks, in particular via LinkedIn. They offer to work from home, change the dependency relationship for life freelance and, of course, stop charging in pesos. Payment can be made in dollars, deposited in a bank account in the United States or Uruguay, or through Bitcoins. In this way, the currencies generated by Argentine professionals never enter the country; if they did, they should be converted into pesos at the official exchange rate.
A local businessman in the sector, who lost young professionals from his company to this scheme, exemplifies it. “A semi-senior software developer earns, blank and with all the benefits, $ 80,000, which costs his employer $ 130,000. You get an offer without a dependency relationship but earn USD 2,000, which, charged at the ‘blue’ exchange rate or the Stock Exchange dollar at $ 145, becomes $ 300,000. He doesn’t have much to think about “, regrets.
“Providing services in this way is illegal, it is unfair competition for all companies that pay all labor costs and the corresponding taxes. And it is also something very serious for the country: they are currencies that remain outside the economic circuit ”(Candelo)
If the same service for a client from abroad is provided by an Argentine SME, in addition to the tax burden of the operation, you must enter the dollars at $ 91 a month after being collected. In order to retain its human resources, it cannot pay them the same as those offered from abroad, much less in dollars, because the stocks prevent it from accessing foreign exchange in the legal market.
The pandemic accelerated the process: before a US company paid more to the local developer if it wanted to have it nearby; teleworking reduced those itches and as long as the professional is up to the task, it does not matter in which country they are working.
From the Chamber of the Software Industry (Cessi) they warn that the problem is serious. “Providing services in this way is illegal, it is unfair competition for all companies that pay all labor costs and the corresponding taxes. And it is also something very serious for the country: they are currencies that remain outside the economic circuit, “he told Infobae Sergio Candelo, president of the entity
The salary of USD 2,000 mentioned in the example is a flat, it can be even higher. The differences are aggravated by the exchange rate split, because the legal dollar distances itself from the informal one. But if there were only one type of exchange, they would subsist other issues, such as labor cost. Like soybean exports that leave the country through alternative routes to avoid the “Argentine cost” of withholdings, the export of services also finds these routes. And the dollars do not reach the financial system or pay any tax in Argentina.
“Beyond exchange regulation, we have to rethink the future of employment, labor relations, the transformation required by the job hiring model for the future”, Candelo points out. And remember that, in this context, the controversial teleworking law will begin to apply, which requires that this developer have to have a workspace in an office, even when working at home, among other things.
The capture of human resources from abroad in the world of software and professional services has an impact on both SMEs and large companies (Accenture, Globant, Baufest, PwC and others) that usually offer good working conditions, qualify in Great Place to Work and worry about the training of their teams. But the exchange differences and the costs can more.
The capture of human resources from abroad in the world of software and professional services has an impact on both SMEs and large companies
The programmers, they explain in the sector, were historically a scarce resource, in Argentina and in the world. It is an almost artisan work in which there was always a supply that was less than the demand.
“In the world of software development, Argentina earned a place oriented to quality, just as other countries such as India or the Philippines have a place oriented to quantity. But exchange rate differences and taxes threw everything out of place. If a company bills a client abroad for a dollar, they get $ 90, and with that they have to pay the programmer who is offered $ 145 in another way ”, they point out in another company in which they highlight the competitiveness deficit that it creates for Argentine companies the lack of exchange rate stability.