Unlocking Brazil’s skilled contingent workforce: A Managed Service Provider (MSP) roadmap

Unlocking Brazil’s skilled contingent workforce: A Managed Service Provider (MSP) roadmap

Brazil is one of the most diverse economies in Latin America. As organisations look to expand into the region and leverage in-country candidates, unlocking Brazil’s skilled contingent workforce will be crucial for success.

Hitomi Sakuragi - Global Product Manager Pontoon Solutions

Hitomi Sakuragi – Global Product Manager

In terms of contract labour, although still immature, it’s estimated that employer-sponsored in-country Managed Service Providers (MSP) programmes will see a 5% market growth by 2026, with a spend of around $2.2 billion. Firms are looking for a more standardised approach to hiring contingent labour, with a defined infrastructure that addresses compliance concerns and adheres to local labour and employment laws.

Employers must traverse these laws to ensure compliance with labour regulations, which vary significantly depending on the type of work performed, the industry, and the worker’s classification. The most significant distinction is between permanent employees, entitled to

Bianca Machado - Talent Solutions Director, Adecco RPO & Pontoon

Bianca Machado – Talent Solutions Director, Adecco RPO & Pontoon

more extensive legal protections, and contingent workers, who have fewer rights but are increasingly common in today’s open talent economy.

This article explores key insights and provides actionable advice for employers considering an MSP in Brazil and seeking to optimise their contingent workforce in the country.

Unlocking Brazil’s skilled but complex contingent workforce

Brazil has a highly diverse skilled workforce due to laudable investments in education and skill-building over the past few decades. The country’s education system encompasses public and private institutions, with universities offering quality higher education across various fields. According to a recent report, around 67% of Brazil’s population is ready to be employed, indicating a large pool of talent for businesses.

One of the key advantages of setting up operations in Brazil is the diverse and skilled workforce. By tapping into this talent pool, you can assemble a contingent workforce that brings a wealth of different perspectives while simultaneously filling any skills gaps or shortages your business may have.

However, Brazil has been struggling with high unemployment after the economic recession. Significant changes have been introduced with the recent labour reform of 2017, including new hiring and termination practices. When expanding your business to Brazil, having a local knowledge partner like Pontoon can be invaluable. We will help you navigate the legal landscape, leverage the diverse talent available, and set up your contingent labour programme for success in this dynamic market.

Understanding local labour laws and regulations

In Brazil, companies must follow specific rules and regulations regarding temp labour hiring. Firstly, permanent hiring is preferred, while contingent hiring is more restrictive when it comes to the how and why contractors are being onboarded. Understanding these hiring regulations is vital for firms looking to establish operations in Brazil.

As mentioned earlier, Brazilian labour laws are complex and ever-changing. The country has expanded subcontracting, resulting in a reduction of employer responsibility and workforce fragmentation. Unlimited outsourcing has led to lower wages, longer work hours, high employment turnover, and more accidents. Additionally, labour unions’ position is undermined by making workers’ contributions optional, and intermittent work rules have changed, which allow employees to be called to work without specific hours and paid less than minimum wage.

Employers must stay current with these changes to ensure compliance and avoid costly legal disputes. Companies looking to expand operations in Brazil should be aware of the Brazilian Labour Law (Consolidation of Labour Laws) that governs all matters related to employment, including working hours, pay, overtime, vacation, and termination of employment.

Pontoon’s expertise in local market regulations brings knowledge and power to our clients. We can tailor a solution, providing talent infrastructure from a global and regional HR ecosystem leader, the Adecco Group, our parent company.

Best practices for contingent hiring in Brazil

Brazilian companies generally prefer permanent hiring, with contingent workers used on a limited basis for specific jobs. Companies must clearly understand the labour categories where contingent workers can be hired and what job functions they can perform. Employers must also comply with local regulations regarding benefits and other requirements for these workers.

If your firm is considering setting up operations and hiring in-country, we recommend working with an experienced talent partner to first identify business needs whether SOW (project-based engagement), temporary staffing, or staff augmentation. However, these categories don’t always align with governmental labour categories. For example, staff augmentation ( or long-term worker engagement where organisations have direct influence over workers) is uncommon as many companies are risk averse regarding possible co-employment claims and litigation.

Here are a few more things we advise our clients to keep in mind when setting up temporary staffing and outsourcing activities in Brazil:

  • Temporary staffing – organisations need to justify hiring a permanent employee’s substitution (e.g., maternity, or sick leave) or reasons why such a decision was made such as a substantial increase in the workload due to business growth (seasonal peak, new client. etc.) This contract cannot exceed 180 days, with temp workers entitled to all rights and privileges of permanent employees.
  • Outsourcing – need to identify and explain the purpose of contracting concerning the scope of determinate activities. Any firm receiving an outsourced service cannot direct nor supervise the workers supplied to do the work. This means that the outsourcing company must bring in a supervisor who manages and directs these workers. Otherwise, the contracted workers will be deemed to be the firm’s employees.

In-country talent acquisition strategies

Finding the right talent in Brazil can be daunting, and companies must adopt appropriate talent acquisition strategies to ensure success. One such approach is to partner with local staffing agencies through talent partners like Pontoon.

Brazilian culture emphasises relationships and social connections, significantly impacting employment in the country. Networking and personal relationships are crucial in securing all job opportunities, and companies often prioritise hiring individuals recommended by trusted contacts. Successful social sourcing campaigns, job fairs, and other initiatives speak to personal relationships and build trust between employers and their staff.

Pontoon’s MSP experience in Brazil

Unlocking Brazil’s skilled contingent labour market requires a deep understanding of local labour laws and regulations, hiring practices, and talent acquisition strategies. Companies must partner with local experts and invest the time and effort to co-create the right solution with an experienced talent partner.

In Pontoon’s case, our key strength in Brazil is our delivery network, backed by the experience and local market expertise of Adecco, our sister brand. For example, one of our manufacturing clients needed help hiring production technicians and quality control assistants based in Campo Largo. Teaming up with Adecco staffing, we recruited over 200 workers leveraging our on-site consultants, focused primarily on understanding the client’s delivery specifics and culture, and aligned our processes accordingly.

Ready to tap into Brazil’s diverse and highly skilled talent pool? Expanding your business to Brazil can feel intimidating with its complex legal landscape and dynamic market. But with the local expertise and tailored solutions that Pontoon provides, you can navigate the labour laws and regulations, adopt innovative hiring practices, and build a sustainable talent acquisition strategy to gain a competitive edge in the market.

Contact us today to simplify your contingent workforce programmes and staffing sourcing complexity.

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