Nearshoring in Argentina under Milei: Economy, Outsourcing, and Tech Opportunities with Matt Steinberg | The Nearshore Cafe

 

**Brian:** Welcome to another episode of the Nearshore Cafe podcast! I’m Brian Samson, your host. If you have been following the year-plus of Milei in Argentina, this is going to be a really interesting podcast for you. We’re going to go deep into the economy, what it means for job seekers, companies, all sorts of stuff. Before I introduce our guest, let me thank our sponsor, Plug Technologies, plug.tech. A great way to connect talent from all over Latin America to growing US companies. Without further ado, let me introduce our guest, Matt Steinberg, a senior technical recruiter, lead recruiter out of Latin America. Great to have you, Matt.

**Matt:** Great to be here. Thank you for the invitation.

**Brian:** Matt, we’ll ease into the economy questions. For those that have never met you, just give a little sense: How did you get into what you’re doing, and how long have you been working with people in the States?

**Matt:** Yeah, that’s a very good question. I started out working back in the year 2005. There was no nearshoring, no outsourcing really for recruiting. I actually was lucky enough to come across a person from the United States who was, say, a person here in Argentina, trying to initiate a company called Avature, of all things, which is kind of a famous ATS nowadays. But back then, it was kind of in a beta testing phase. So, we started talking. He was putting together a group of recruiters and sourcers to support the United States from Buenos Aires. I thought that was actually cool. I was studying; I was finishing off my degree in Psychology. I thought, “This is kind of related. I would be lucky to be there.” So, we started talking, and in the end, I was lucky enough to get the job. And he was very good at training people because no one actually knew what recruiting was about. It was kind of the first thing in Argentina recruiting-related. So, he would just get us all together in a conference room, have us cold call candidates and people from different job boards like Monster, CareerBuilder, and all those others. And so, we actually learned the trade from him. He was the old school, with the Rolodex kind of a recruiter, calling people from, you know, calling centers and stuff. So, from there on, it was just all recruiting. I started doing work as a recruiter within RPO. Then, nearshore started taking form and taking shape in Argentina. So, I was lucky again to be associated and acquainted with people that were actually interested in investing a fair deal of money in expanding the RPO and nearshoring business in Argentina. So, ever since, it has been like 20 years of supporting the United States, Canada, European countries, EMEA as a region, APAC. So, I was very lucky throughout my career to be exposed to those countries and those cultures.

**Brian:** It’s really given you a nice global perspective. I think the, maybe the elephant in the room with a lot of US companies is, “Will I be able to communicate with them? Will I be able to understand them? Will they understand me?” And can you share just more about your personal journey with English and how you got to the fluency level that you have?

**Matt:** Well, that’s a very interesting question. I don’t know how to answer that, honestly, because I never actually studied English. I mean, I had English at school, but it wasn’t really enough to get by. It was just grammar, the basic stuff. But there was one day that I actually needed a job when I was 18 or something like that, when I approached a call center that was starting business in Argentina. And I went through the interview without speaking a word of English. I just said “right,” “yes,” and “no” in all the right orders, I guess, and actually got the job. So, from there, I was just practicing. I think every Argentinian, and every guy in Latin America who considers himself or herself capable of actually supporting a business globally or for the United States specifically, has done it at some point in their careers. You just stand in front of the mirror, you repeat the words, or you record yourself, or you sing in English, or you watch the telly without actually using the subtitles, and that gives you a proper understanding of how people talk, and then you repeat it. It’s just repetition. The more you repeat yourself, the better you get. And, of course, talent does play a huge part of it. Some people are more gifted than others. I’m not one of them. I actually had friends from the UK, and I think I caught the accent. I just picked up the accent at some point, and now I can’t get rid of it. It’s more like a speech impediment than an accent, really. But most people who are really gifted do have that ability of repeating themselves, getting really best at it, and accelerating the learning curve so that really gets fluent at it.

**Brian:** Matt, if you don’t mind, some of the types of companies and industries you’ve had a chance to work with from a nearshore perspective?

**Matt:** Wow, yeah, I started out my career with IT, right within IT, technology, information, and technology. That was all. I mean, but when I started, it was all about the cloud, you know, 2005, 2010. Those first five years were all about cloud migrations, implementations, you name it. So, I supported managed hosting companies, web hosting solutions companies, managed cloud services, storage companies. So, it was all like, I mentioned, data, NetApp, Microsoft. Actually, I supported them for a few years. I worked with Lenovo. I worked with another company in the United States that actually manufactured storage devices, Intel. You know, semiconductors, companies that were trying to create servers in a more advanced way at that point. And then, there are always trends and stuff that are changing, and then transition from one point to the next. Cloud became advanced computing services. We became professional services. And then from there on, you had two light paths in front of you: hardware or software. Everything that’s a service could be internet as a service, platform as a service, networking, security. So, I supported companies in networking like Arista Networks, Juniper Networks, Palo Alto Networks. I worked with Barracuda Networks. I also worked with companies on the “everything as a service” side. Like Lenovo had a Professional Services implementation a few years back, and I was lucky enough to be involved in that. So, I supported many, many companies in IT and then, of course, financial services associated with IT, like Bloomberg and all other financial analysis companies that provide analytics into the financial markets. So, they always look for financial analysts or financial people, quantitative analysts, software engineers. So, it’s been a long list of roles for a long list of companies for the last 20 years.

**Brian:** Do you have any tips for those in Argentina that are maybe starting their recruiting career, and any tips for them on how to best connect with IT people in the US?

**Matt:** Yes, I think it’s all about reading. People don’t pay enough attention to this, but it’s all about catching up with the newer trends, but it’s more about reading than anything else. There’s always a lingo, and there’s always a certain, a fair amount of technical words you’ve never heard of. You might see them on the job description. If you don’t really understand them, if you’re not really able to know the depths of it when you speak to someone from IT, unless you are an incredibly fast typist, you might have a bit of an obstacle in front of you. So, the best way to overcome that obstacle is by really learning everything you can about IT. At some point in my career, I almost became a bit of a developer. I had to learn about it. I was passionate about it, but moreover, I had to learn it. I was speaking to at least 25 Java developers per day, and I didn’t know the first thing about Java. So, I can’t — and I mean, this is my career — I can’t let this be. So, I had to learn. I took a course; I became a bit of an amateur developer. And from there on, it was just reading: reading about Ruby on Rails, reading about C#, what is Golang, how that translates to data analysis, why Python when looking for a data engineer. So, the best advice you can give to a person getting started in IT recruiting/sourcing is: Learn as much as you know about technology. Don’t let it be just a side thing for you. Get deep into it.

**Brian:** I think that’s great advice. You know, Matt, I was curious because the tech industry in the US brings people together from all over the world. So, I’m, maybe this is kind of a silly question, but did most of the engineers that you would have phone screens with, did they have any idea that you were in Latin America?

**Matt:** Well, that’s a very interesting question too, Brian, and I don’t think it’s a silly question at all. When you start, you don’t want them to learn what you are. You don’t want them to — not because you feel you’d be misjudged for being Latin American. There’s this misconception about Latin America that we all Latin Americans have: We’re just trying to hide it away. And that’s mainly the reason why most people try to work on their accents and try to sound more either American or English-speaking English, because they just don’t want to be recognized as part of another world, so to speak. But the truth is, in time, you realize that it doesn’t matter. Most engineers are really not from the United States originally, and you actually will recognize that you end up speaking better than most people do because you’re more articulate, because the job requires you to be, because you really learn to listen, which is the most important part in communication. So, it really doesn’t matter. You do tell them, in fact, you’re proud of being able to say, “I’m calling you from Buenos Aires. How’s that for a globalization or a globalized world, right?” And you tell them, and they like it too. It’s a good icebreaker. It’s a good way into a conversation, a good segue into having a proper personal rapport developed right away.

**Brian:** I think that’s fantastic. That’s really interesting. Let’s jump into the economy, Matt. So, we’re about a year or so into Milei. Maybe let’s just kind of start big picture, and then we’ll get into a lot of the pieces of it. What has that meant, I guess, for Argentinians? Like this last year, how have their lives changed? What has that meant for them?

**Matt:** Well, I’ll try to answer that question, Brian, without getting too polarized, because that’s one thing, before we get started with that, that people need to understand about Argentina: The politics in Argentina got incredibly polarized over the last 20 years. There’s always been a sort of a two-party political world in Argentina, like Peronists versus Radicals, right? So, it’s just left-wing or right-winged, or more to the left than to the center or to the right. There’s always been a polarized thing. But in the last 20 years, it really has become a one-side-or-the-other kind of thing. So, when Milei got to power, actually won the election, it wasn’t only a shock to people, it was an incredible feat. And I’ll tell you why: Milei, for most people who don’t know who that person was, he’s an economist. He’s a proper economist, someone who really studied economy in depth, right? So, when he became a politician, he was just coming out of the telly. He was a panelist. He would come up on the telly and criticize everyone who was in politics at that time. He would speak ill of the president, all the government, all the deputies, all the senators. He was criticizing the economy in an enormous fashion. So, when he became an active candidate, and furthermore, he actually won the election, it was unthinkable, unfathomable. If you look back four years, the guy was on the telly just yelling like a maniac, and now the guy is a president. But he was welcomed. It was welcomed by many people. I would include myself in that, because the wave of politicians that we had the last 20 years was more of the same. The economy had to suffer because of it. So, when this guy gets to power, it represents a change of the mentality of people who decided to vote for something different for once. So, this guy has done not enough yet, because he hadn’t really had much time to do many things. And let’s face it, he actually took an economy that was shredded to pieces. It was crumbling down; it was all shredded down. And the guy is trying to pick up the pieces, shape it up into something more productive. But with that, it came something that maybe most viewers or listeners heard of: it was the `cepo` (currency control), which affected the economy incredibly. For all those who don’t know, in Argentina, we had four different values to the American USD, American dollars currency. There was a legal one; no one had access to it because there’s something called a `cepo`, which is kind of a blockage that the government put. People can’t get dollars and get it out of the country. So, you couldn’t buy anything at that real price. So, that generated a second price. There was always a parallel market in Argentina for dollars. It used to be “black dollar,” but they had a very open conversation, so they changed it to “blue” because it had a better tone to it. So, “blue dollar,” the value of the currency was much higher than the real price of the American currency. That generated a huge amount of opportunities for nearshoring, for outsourcing. And I was, not just me, everyone who was working for the United States, earning in American dollars, was benefited by it. As you all know, when you get paid in the American currency, it generates a certain stability in the amount of money you get because of something called inflation and devaluation along with it. So, when people started making, getting their wages in American dollars, they could start getting a projection of how much they would earn. And if the change of the price, of the value, sorry, value of the currency affected you when you were earning in pesos, that wouldn’t happen if you were earning in dollars. So, you can have a projection, you can have savings. So, most people started getting their jobs and starting outsourcing services to the United States, to Canada, to Europe, to Australia. If you were lucky enough to get that job, you would get incredible experience working with a different culture, but more importantly, a stable economy. Since this guy, Milei, took to power, things have started to change. They fixed the value of the dollar to 1,000 pesos per dollar, and the parallel market got stuck, stagnant at 1,200. Well, that means is that if you’re earning an hourly rate in American dollars, you’ll always get the same amount, as opposed to when inflation and devaluation affect your wages. So, now your projection you have is still the same, you’re still stabilized. But if you work for the local Argentine markets, companies started to get wise, and they started adjusting your salary every couple of months because inflation is actually a legal thing they have to go through. And it’s the only way they have to retain employees and to reduce turnover. So, nowadays, it is incredible how more beneficial it turned out to be, or turns out to be, to work for the local markets because you have a growth in your salary every two or three months, whereas that doesn’t happen when you’re lending services to the United States anymore because of the `cepo`. That’s something that happened over the last year and a half that is affecting all of us working for the United States.

**Brian:** To me, that seems like it’s flipped the economy upside down because there was so much incentive to export services. Now there’s this, you know, you’re almost penalized for it, right? Because you’re not going through the adjustments. Matt, from your perspective, what percentage of, I mean, you’ve worked in the IT industry, I’m sure your peer group is probably a little bit different, but from your best guess, are 10% of the population in Argentina, the working population, are they outsourcing, exporting their services? 20%? 50%? What does this kind of mean overall?

**Matt:** Well, what I can tell you is a huge percent. I think we’ll be closer to 20% exporting, because it still means that you’ll get American dollars. No one believes the economy will sustain and will hold, and this is something that comes with the history of the country and the economy. People don’t believe in pesos, which is, of course, a reason why devaluation occurs. People don’t believe in the currency because they said it happened many a time before, many times before. So, what people do is they still outsource services, they still lend services to the United States because they believe that earning dollars and keeping that money in your pocket or virtual wallet, if you prefer, that helps you project, have a projection. You’ll be safe on whatever happens in your country. So, despite the fact that it is more convenient nowadays for this period of time to work for the local market because you do get these adjustments, people still have this mindset towards outsourcing because that’s what we do. We don’t believe in the Argentine economy.

**Brian:** You know, one thing I’m curious about, Matt, is the rise of BRICS and an alternative reserve currency. Has that impacted anyone in Argentina? How are you and your friends thinking about that?

**Matt:** Well, it’s always been difficult to buy yourself a house in Argentina because the prices, despite the fact that by comparison are not really super high, they’re still kind of unaffordable, just beyond reach, beyond the grasp of normal people. So, working people cannot project because they can’t even earn a salary that will allow the bank to trust them with a loan, right? There’s no such thing as a loan unless you prove yourself earning a certain amount of money, which is, let’s face it, less than 5% of the population who could do that. And that has always been the case, right? It’s not something that’s just new. But what has been happening over the last few years is the price of bricks has been escalating, skyrocketing, actually. And people that would save in bricks because that was the most stable currency that you would just save by building yourself a house or building a flat or buying yourself a property. The price of property has gone down, whereas the price of bricks has gone up. That means even if you buy, you’ll be spending more money than you can ever get back if you sold the place afterwards. So, that has created a way of thinking which is kind of weird. I’ll tell you about it if you don’t mind. It’s kind of interesting, funny, actually. There’s always been a model of work, of business that works in Argentina. It’s not something you can study. It’s not something that financial analysts will tell you. There’s something that just happened. We call the “flash business model.” It happened back in the ’90s with tennis and paddle courts. It happened with something we call the `parripollo`, which is kind of a grill where people would buy chicken. And then it started happening with cyber coffee places where you would go and use a computer because you didn’t have internet at home. And then from then on, it kept on changing. And every time it changes, when something actually hits, when there’s one businessman or businesswoman that does it and actually hits it, and just hits it big, everyone starts copying that. Now you can’t save in bricks. You can’t save in property. So, what people do is they just start initiating businesses, even though there’s no real projection, there are no real figures that will tell you. Even if you crunch the numbers again and again and again, nothing tells you you’re going to succeed at it. But people do it all the same because they saw someone else do it, and they saw someone else hit it big. It’s just like going into a casino. You just see a guy playing slots, and he hits big, and it just paid up. It just paid. You’re not going to get the jackpot again. Chances are, you’re never going to get it again. People go and play it again. It’s the same thing. I think it’s the same phenomenon.

**Brian:** You know, I mean, in the States, we often think about diversifying our investments. I almost feel like it’s diversifying your currency in Argentina, whether it’s bricks, pesos, dollars, crypto.

**Matt:** Exactly. That was a very good analysis, actually. Yeah, exactly like that. Now there’s something called `plazo fijo` (fixed-term deposit), right, which is you put the money in your bank, and you have to keep it there for a certain period of time, and it pays an incredible margin because of the instability of the currency. Because it’s so unstable, it’s so difficult that you can actually know what’s going to happen that the risks outweigh the benefits. So, they have to pay an incredible interest, and the interest rate has gone over the top, man. It’s about, I can’t exactly tell you, but I think it’s about 45 or 50% interest in a short period of time.

**Brian:** Matt, for those in the States, we’ve experienced, in our opinion, high inflation the last couple of years. You know, the price of eggs has doubled. But give some perspective, what does it feel like to live in a hyperinflation country for the last 10, 20 years? What does that feel like?

**Matt:** I can tell you a story. I went to this shop because I needed to buy a replacement for one of my saws. I had a saw. I wanted to saw something, had to get a replacement because it’s all broken and rusty. So, I went to this place, and as I got in, there’s a line, and I see the price on the wall, right? The price on the wall was, I don’t know, $50, right? Equivalent in pesos. It was actually in pesos. I can’t remember the figure, but it was not really crazy, but it wasn’t cheap either. So, I wait in line, and it’s taking time. It’s taking 20 minutes, 25 minutes, 30 minutes. And I ask the guy, “What’s going on?” “We don’t have a price list yet because this keeps on changing.” So, people are waiting in line to get their service because no one knows how much things are going to cost. So, by the time I get to the front and I’m asking for the replacement, it was already $80 in 30, 40 minutes. So, that’s how it feels like. There are moments where that happens. There are moments where the whole thing becomes a bit more stagnant, and you don’t really feel it that way. There were times where you couldn’t get anything that wasn’t really here because you couldn’t get imports in. So, living in a country with this kind of inflation tells you you won’t be able to know how much you’ll be spending next month in groceries, in services, and expenses. So, there’s really like a day-to-day kind of a mindset, which is why Argentinians are so good at resolving stuff, because we resolve things every day. And I think that goes for every person in Latin America, whether they have inflation or they have an unstable currency or a job market that’s fluctuating. We all become problem-solvers. And that’s why I believe most American companies look in Latin America because we’re great at resolving stuff. We’re trustworthy, hardworking. Most of us are really devoted to what we do and passionate about it too, might I add, and really good at solving problems. Whatever the problem is, we’ll find a way. But we have a word in Argentina which is `atado con alambre`, which is “tied up in wire,” because when you can’t get the replacement part, you just tie two wires together and make it work somehow. And that we do, right? I do that every day, for that matter. So, it’s a very interesting thing.

**Brian:** That’s great. That’s great. Thanks for explaining that. Maybe let’s flip this to the employer side. So, you know, think you’re a CEO of a tech startup in the States. You’re watching podcasts like this. You want to set up operations in Argentina, get the right talent. What are some things that they should be doing, maybe currency or otherwise, to be successful there?

**Matt:** Well, that’s an excellent question. The problem with the economy, as we were talking about it moments ago, is that you can’t really know what’s going to be headed next. So, if you are a business owner trying to start a nearshoring business, or even starting a business in Argentina, one thing to bear in mind is that people will want to receive everything in written. When I mean “everything in written” is the adjustments, any changes to their salary. So, everything has to be backed up. It has to be a backup for each contingency, right? Because you never know what’s going to happen. People develop this sort of radar for upcoming problems. So, when talking to a new employer, people want to know the terms of the employment, how things are going to be changing over time, “What if this happened?” So, you have to have contingency paragraphs in your contract to anticipate each of these problems. In terms of talent, English is a huge part of it. So, Argentina hasn’t got that problem. People in Argentina speak rather well, and they don’t really have this struggle where they have to go and learn and then come back to the markets. They’re ready to go and play. So, that won’t be a problem. As for talent, Argentina hasn’t received many investments in IT like Brazil has, so supercomputing-wise, which is getting started, HPC, high-performance computing. And there are certain languages that haven’t really yet developed in, or they haven’t been developing in for years, like you talk about Databricks, we talk about QlikView, Qlik Sense, Replicate for migrating databases, use chunks of IT. People haven’t been doing it for long because it hasn’t been here for long enough. So, learn your markets, learn your trade, learn what has really been taking place in Argentina. If you’re going to start a business here, learn about what people are doing and what people are getting themselves into, and give them time to get best at it. That’s what I would say.

**Brian:** Matt, are you bullish on the economy right now? Do you think the country will be in a better place in two years? It’s still hard to say. What do you think?

**Matt:** Well, it’s always hard to say. I’ve been here for 41 years, and it’s always hard to say. I’m positive about it. I’m optimistic about it. I do believe— I don’t believe that things are going to happen magically overnight. There has to be a certain list of things that take place for things to get better. But I believe that thanks to outside investments and to the talent of Argentine people, and I hope that these new breed of politicians have a better objective in mind than just getting rich themselves. So, that is a good combination of things to be optimistic about. So, yes, to answer your question, I am optimistic. I think things are going to get better. Things will definitely get better. It just needs time.

**Brian:** I think what I’m most interested in is, among many things, importing different goods from around the world. I had a tough time trying to get hardware into Argentina, and I’m curious, is anything changing with that? Do you think that will be easier to move stuff in and out?

**Matt:** We’re easing into it, yes. There used to be a major difficulty bringing hardware, like you put it, computers, laptops, not so much accessories, but big stuff like Apple computers, because of what I said before: Things that hit it big start being replicated as business models, and people just try to make money out of it. So, the government got wise and said, “No, hold on, you can’t bring 40 Apple computers if you’re a business model that affects you, because you’ve got 40 employees that need an Apple computer, and you need that to work.” That can kind of create a dent in your business endeavor. But it is understandable because people abused it for many years. I don’t defend it. I’d love to have the possibility of importing stuff at a lower cost. Things are very expensive to bring from other countries. I’ll give you an example: I play the piano, and I broke a key of a piano because I’ve got big and heavy hands. I’m just kidding. It just tore off. So, I tried to get a replacement, but no one builds it or manufactures it in Argentina or in America, not even North America, where you would say, “Well, more manufacturing.” So, I had to go to Europe. The cost of the item was $8. The cost of bringing it over from Sweden was about $78. It’s because of the inflation, because of people doing this all the time, and because of the customs. The taxation is huge. But Milei has come up with a plan, and the government, the administration, has come up with a plan of reducing the cost for at least the first $400 of imports in products. And that helps people bring things in, not just enough to create a business out of that, but to bring things for personal use. So, that’s easing into it. I think the next step would be to be more considerate about how many of those things you can actually bring items. But for the time being, it’s getting better.

**Brian:** Well, Matt, this has been an incredible conversation. I can’t believe how much I’ve learned. This is fantastic. Thank you so much for being here.

**Matt:** Thank you for having me.

**Brian:** Well, this is the Nearshore Cafe podcast, sponsored by Plug Technologies, plug.tech. And we’ll see you next time. Thanks for listening.