Beyond labor laws, for Latin America it's all about productivity

Following up on Tarun's series about labor regulations in Latin America. It is true, labor laws may not be competitive according to U.S. standards, yet just a handful of countries in the world have US-like labor regulations. European countries in general have laws that can be considered as non-competitive, yet most of the economies maintain a good level of competitiveness.


Of course many may argue that these are developed economies, not works-in-progress, like in Latam. The key here is that companies find ways to be competitive because of the conditions of their own countries, and in spite of the limitations of the environment in which they operate.Case in point, nearshore outsourcing needs to compete on the basis of high productivity, which should emanate from high-quality, process rigor, intellectual property and automation.

No country in Latin America, hence no indigenous company, will be able to compete with India on the basis of lower man-hour cost or high volume. Mature companies know these are the conditions in which they play. Because of that, they need to be as effective in providing a competitive cost of engagement, when compared to India-based solutions, regardless of countries labor regulations.