This is the second of a two-part series on Latin America’s evolving talent market
In part one of our two-part series on Latin America’s evolving talent market, we shared some of the key results of FrontierView’s most recent talent management survey. These results suggest that attraction and retention issues are expected to become even more challenging in the coming years due to an increasing demand for skilled professionals as the region recovers and while talent supply bottlenecks remain unresolved.
Now we would like to share key lessons garnered from executive interviews regarding how to effectively attract and retain talent in a fairly competitive environment. Our findings are summarized in four key HR strategy attributes and six specific strategies that companies should consider implementing as they fight Latin America’s talent war.
Four key attributes to attract and retain talent
Since the scarcity of well-rounded professionals is expected to increase in Latin America, recruiters will need to leverage brand, opportunity, purpose, and culture to attract and retain talent in the region. The first two attributes – brand and opportunity – will have higher relevance for talent attraction and the other two – purpose and culture – will have higher relevance for talent retention.
For emerging markets professionals, a desirable affiliation is extremely attractive, and more so if it may lead to personal advancement, particularly if the company’s brand is associated with inspirational leadership that challenges employees to develop and help build a great company that can play on a global stage. Results from our FrontierView talent management survey show that 81.2% of HR executives consider their company’s brand as the most important attribute to attract talent in Latin America.
For young professionals, this attribute implies an accelerated career track to senior positions. In practice, it is important to understand that the ambitions of high-potential employees can be fulfilled not only by providing them with vertical growth opportunities, but also with changes to their current role functions or geographic coverage. This attribute can also include lateral moves that are challenging and allow for skill-building. Results from FrontierView’s talent management survey show that 43.8% of HR executives consider their companies’ career development opportunities to be the second most important attribute (after companies’ brands) for attracting high-potential talent in the region.
Employees value a company with game-changing business models, particularly if they can be part of the change by redefining their company’s structure and strategy or by playing an active role in the company’s impact on the economy. For example, in recent years younger workers (millennials) have become more attracted to companies with a strong focus on social responsibility. A well-known example of this was presented in a Harvard Business Review article that shows how Novartis’s sense of purpose served as the company’s major attribute to retain talent. The Arogya Project, one of Novartis’s socially conscious business projects, provides services to more than 10 million villagers in India. The head of Novartis’ Arogya Project explained, “We improve the health and health education of the villagers […and…] we provide a source of revenue for local talent working with us on the ground. We are helping local doctors and pharmacists. This is a tremendously exciting mission.”
Although this factor is key to attracting talent, it has greater relevance for retention. Culture needs to feel authentic, and authenticity and identity is particularly relevant in Latin America. For example, companies that pride themselves on having an entrepreneurial culture have an intrinsic responsibility to empower their employees to develop new initiatives. As such, companies that fail to deliver on their culture promises are more likely to have higher attrition rates. As results from our FrontierView talent management survey suggest, companies that considered cultural fit as the least important attribute (among five attributes) to attract talent in the region, were also the companies that reported lack of cultural fit as the second most important reason behind regretted staff turnover.
Six strategies to win the talent war
As competition for talented and experienced professionals is expected to significantly increase over the next years, more and more companies are focusing on developing a pipeline of talented young professionals who may not have all the desired attributes for a particular position, but who have the potential to quickly learn and become key contributors and leaders in their companies. The key best practices we found for talent attraction and retention are the following:
1. Identify and develop talent from within
To counter the lack of experienced candidates, companies need to create a seamless process to identify and develop young talent from within the company, based on a combination of experience, performance, and promotion potential. In addition, companies should be carefully identifying young professionals’ strengths and weaknesses, as misidentifying and incorrectly addressing gaps will lead to ineffective performance among high-potential professionals.
2. Offer skills-based variable compensation
To counter misalignment in salary expectations, companies need to leverage their brand while also offering compensation that goes beyond the traditional “base salary plus quasi-fixed bonus” package. In addition to the traditional package, companies should offer a share of the company’s commercial success by tailoring skills-based compensation initiatives to attract and develop top talent and drive long-term commitment.
3. Create local technical training centers
To counter for a lack of technical skills while also increasing engagement and effectiveness among employees, companies need to hire high-potential professionals and develop their skills through local technical centers of excellence that serve the needs of specific markets or sub-regions (as opposed to only using regional or corporate training centers).
4. Create personalized career development paths
To prevent employee turnover because of a lack of career development prospects, companies need to invest time and resources to create individualized career development programs that consider employees’ experience, education, and exposure. This process must be developed together with the employee from the very moment of the official hiring offer.
5. Expose your local teams to more advanced managerial responsibilities
To prevent employee turnover because of high levels of work-related stress, companies need to create a plan for career exposure that will introduce local teams to more advanced managerial responsibilities to identify potential leaders who could be a good fit for demanding regional or global leadership roles. Some companies successfully apply the Peter Principle Model to create a comprehensive approach to recognizing employees’ interests, weaknesses, and strengths, and use talent scorecards to identify professionals with the correct characteristics and skills to become less stretched local, regional, or global leaders.
6. Instill your company culture
To prevent employee turnover because of increasing demand for higher salaries, companies are investing resources to help their staff understand and absorb the company culture and ensure cultural consistency across regional offices. To guarantee a common understanding and develop a compelling employee value proposition, companies use employee feedback, surveys, and analysis to develop a 360-degree view of what facets of their companies’ culture motivate their employees.