Full Moon Rising: The Increasing Cost of South American Media & Creative Talent
South America, particularly Argentina and Brazil, has long been a source of affordable—dare we say cheap—media and creative talent. U.S. advertisers seeking to execute campaigns on tight budgets have consistently relied on this pool of talent to meet their needs. However, in recent years, owing to a weakening dollar and greater demand for such services, Latin American rates have been steadily rising. Here, Portada asks Hispanic media professionals Juan José Núñez and Paul Suskey what specifically is shaping this reality, and what its implications are. Juan José Núñez is Vice President of Operations for Starmedia.com, a popular online portal, with social networking website.
Paul Suskey is Co-Founder and CO-CEO of Media 8, a Miami-based digital marketing agency.
How do Argentine media salaries measure-up to those of American salaries for comparable jobs?
Juan José Núñez, Starmedia: The general salaries in Argentinean media are lower than U.S. salaries, but not by much. It all depends on the level of executive you are looking for. For example, a junior-executive in Argentina makes 60% less than the same level person in the U.S. On the other hand, Executives and senior executives make 15% less than their U.S. counterparts.
Paul Suskey, Media 8: The U.S. continues to maintain compensation premiums within comparable media, creative and IT job functions in region. While the comparison certainly varies country-to-country, and is influenced by several economic and socio-economic policies and trends, the shrinking compensation gap between the Americas will continue in the coming years as both international and local investment strengthen local infrastructure, and capacity that will increasingly seem attractive considering the “near-shore” benefits the region provides.
By what percent would you estimate Argentine media salaries have risen over the past five years? Also, is this taking place in other South American countries as well?
Juan José Núñez, Starmedia: In recent years, the salaries in the communications industry have increased by around 40%, which is more than any other industry in Argentina. Keep in mind that Argentina is one of the biggest Media/Communications markets in Latin America.
Paul Suskey, Media 8: We have witnessed 50-150% growth in compensation premiums within the past five years, particularly in Argentina, Brazil, Mexico and Colombia. Within our digital focus, this compensation pressure is more evident, as digital and IT investment, within concentrated talent bases, increases.
Which jobs are experiencing the biggest increase in salaries?
Juan José Núñez, Starmedia: As mentioned in the previous questions, due to Argentina’s big media market (mostly print media), I would say that all jobs related to Communications, Technology and Digital Media are increasing their rates.
Paul Suskey, Media 8: Digital media, creative and technology are demanding premiums well beyond local economic growth. Production, software development and back office IT also continue to command higher premiums.
To what would you attribute this increase in media salaries?
Juan José Núñez, Starmedia: There is a high demand for these jobs, but limited HR available in Argentina, and for this reason media companies pay higher salaries compared with any other industry/market.
Paul Suskey, Media 8: There are a multitude of factors driving these increases, including regional improvements in economic growth and stability and the increasingly friendly taxation and corporate environments that are attracting exponential investment.
A Tipping Point?
At what point would it no longer make sense for companies to outsource work to Argentina?
Juan José Núñez, Starmedia: It will be when the opportunity cost is lower somewhere else, which I don’t believe will happen any time soon. Argentina has provided outsource work to a lot of countries in all markets because it offers great quality outsource services at a good price.
Suskey: Brazil is close to having reached this point because its economy is experiencing such tremendous growth relative to ours. One drawback of countries like Argentina and Brazil is just how far away they are in terms of traveling down there. So when the cost in time and money of traveling to these places outpaces the savings, It will no longer be worth it.
We are seeing other Latin American countries coming into the fore, however. Colombia’s growing economy and more liberal business incentives are beginning to attract more business from the U.S. media sector.
Mexico is an increasingly significant player, and is graduating more IT professionals than any other country in the region. As its talent-base is growing, so is its flexibility from a trade standpoint. Additionally, it benefits from being located so close to the U.S.
Panama is buoyed by the most flexible financial structure in the region, but is hindered by the rather limited talent pool. And finally, Costa Rica is a market to watch, with companies like Intel and HP setting up shop there.
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