How startups are helping close Latin America's skills gap

Here's a look at how startups in Latin America are flourishing by providing alternative education opportunities and addressing the skills gap.

This is a contributed article by Greg Mitchell, the Regional Director of Angel Ventures, a startup investor and advisor, and creator of the blog Ruta Startup

According to the World Economic Forum, the skills gap in Latin America is still the largest in the world. Approximately one-fifth of young Latin Americans, or roughly 30 million people, are not employed or engaged in any form of education or training. Traditional educational systems are often outdated and lag behind when it comes to teaching the skills needed to find work and grow a career today. 

Dropout rates also remain a major challenge in Latin America. Approximately 50% of students leave the system before completing secondary education, which fuels wage gaps across the region. In countries such as Chile and Colombia, the wage gap between early dropouts and workers who completed a tertiary education program can be as high as 300%. 

Rather than wait for the education and government systems to catch up, many entrepreneurs are tackling these issues directly themselves. Here's a look at how startups in Latin America are flourishing by providing alternative education opportunities and addressing the skills gap.

Expanding upskilling and reskilling opportunities

More than four in ten firms in Latin America claim that they have difficulty finding workers with the right set of skills. For workers, investing in skills development is one of the best ways to improve job security. But just as technology is disrupting productivity in the workplace, it is also changing the learning experience. 

The traditional education model where people go to classes full-time, get a degree, and then enter the labor market is not sustainable. Workers increasingly need to become "life-long learners" by embracing continuous learning opportunities. However, to do so successfully, educational programs must be flexible and accessible for anyone, anywhere, and at any time. 

That's why on-demand, shorter courses that are more relevant to the current job market are on the rise. Peru-based startup Crehana, for example, designed an innovative learning model that allows people from any socioeconomic segment to learn relevant skills for the creative and digital industries through free or affordable courses. To date, Crehana has trained more than 650,000 students in more than 20 countries, including Peru, Mexico, Colombia, Argentina, and Ecuador. 

Of the roughly 30 million people in Latin America who are not in education, training, or employed, 76% are women. Women, in particular, are benefiting from programs focused on developing technical skills and filling the more than 450,000 open tech jobs in Latin America. 

Peru-based startup Labratoria, for example, helps women who cannot afford quality higher education to develop the technical skills needed to land a job as a web developer or designer. 

So far, Labratoria has trained over one thousand women and is growing its presence in Chile, Brazil, and Mexico. Similarly, Google's WomenWill program focuses on digital literacy and fostering entrepreneurship in Brazil, where the unemployment rate is 29% higher among women than men. 

Across Latin America, a growing number of startups are identifying the skills that firms are demanding and making sure that both men and women have convenient ways of acquiring them.

Improving job hunting and transitioning

As technology continues to change jobs and the skills needed to fulfill them, it is also disrupting the way workers transition between roles. There is an increasing need for fluidity in the labor market and to match qualified workers with companies seeking specific skills. 

Startups are fostering this fluidity by providing transition support to workers. Job search portals and platforms that use big data and AI are helping firms and job seekers find each other. Quantum Talent, for example, is making it easier for workers to connect with firms that are hiring. The platform uses artificial intelligence technology to predict whether or not there is a fit between candidates and jobs, and helps to automate the entire recruitment process.

Named one of Fast Company's most innovative companies in Latin America, Mexico-based Apli is another job recruitment platform but designed for the gig economy. Apli aims to connect gig economy workers with open jobs in as little as three hours. Its recruitment services are centered around a profiling chatbot, which provides an unbiased way for companies to identify talent. 

GetonBoard is another one of the leading recruitment platforms in Latin America that allows global firms to tap into the growing pool of local tech talent. The portal helps match companies seeking tech talent with professionals seeking new projects or more challenging opportunities. 

Talently, based in the US and Peru, provides work-placement and English training to senior software developers based in Latin America as well. Talently incorporates English and remote collaboration training in an effort to match remote workers with jobs abroad.

The new world of work

Technology is transforming the workplace and bringing with it promises of increased productivity, better incomes, and socioeconomic prosperity. But for many workers in emerging markets like Latin America, the digital revolution is adding layers of uncertainty and new skills-related challenges to address. 

Today's workers must continuously refresh their skill sets in order to remain relevant. They must also be able to access new opportunities as they arise. Fortunately, where traditional companies and educational systems have failed to deliver, startups are stepping up to the plate and providing innovative, flexible ways for workers to access the training and tools needed to move forward. 

*Full disclosure: Angel Ventures is an investor in Quantum Talent. 

Greg Mitchell is the Regional Director of Angel Ventures, a leading early stage investor in Latin America, a startup investor and advisor, and creator of the blog Ruta Startup. Greg supports the  startup ecosystem in Peru through his roles as Director of the Peruvian Association of Seed and Ventures Capital (PECAP) and Mentor at Endeavor. Previously, he worked at a private equity investor at Nexus Group and Palladium Equity. Mitchell served as a Peace Corps Volunteer in the Dominican Republic. He is a graduate of Rice University. He earned an MBA at the Wharton School and MA at Lauder Institute of the University of Pennsylvania.