Focus on key employees during the economic storm

Latin American companies are taking a leaf out of North America’s book by
analysing employee performance and looking strategically at how to cut costs
without downsizing, as Liz Simpson discovers

In today’s global marketplace it should come as no surprise that when the US
sneezes, everyone else catches a cold. This is particularly true in Latin
America where, despite efforts to secure trade agreements with other parts of
the world, as Mexico has done, the current recession in the US is causing tough
economic challenges in Latin America too. And because so many top US companies
are based in this region – 460 of the Fortune 500 can be found in Brazil alone
– the war for talent is just as rife.

Whereas once Latin American companies downsized at the slightest whiff of an
economic downturn, now the most successful companies are learning the US lesson
and are carefully analysing the business contribution of employees – and only
cutting those whose performance and contribution to the business are lowest.

Indeed, a recent Towers Perrin study of current reward practices in 26 key
locations around the world reported that in Latin America, multinationals and
other large organisations are continuing to focus on attracting and retaining
key talent in order to help them ride and overcome the economic storms. Hence
many companies are engaging in recruitment and retention strategies that answer
an individual’s internal as well as external needs.

A prime example is global Internet and communications corporation Nortel
Networks’ division in Sao Paulo, Brazil where Fernando Lima is HR director. He
says the company has been able to keep ahead of the game by developing strong
links with local universities and training these new recruits internally, but
adds it has also been successful in attracting experienced technical personnel
– particularly those with skills in the optical and Internet protocol domains –
from other parts of Latin America and the US.

"Money is always an important factor but it is never the whole reason
why someone joins us and stays," says Lima. "What technical people
particularly value is the opportunity to grow with the company through working
with, leading and mentoring highly experienced and exceptional professionals
like themselves.

"Another important factor is to have stretch assignments that develop
employees professionally and personally. Our current corporate challenge is to
implement a network of one million subscribers in five months and this offers
employees and executives the chance to operate in a young market enjoying rapid

To ensure Nortel Networks’ Latin American division attracts and retains key
people, Lima’s department has developed a strategy it calls its employee value
proposition, based on research it conducted among employees throughout the
region. It wanted to find out what were the most important non-financial
factors that appeal to talented employees. The answers (and subsequent company
values) were:

– To be part of a global community of highly skilled professionals who are
constantly challenged and trained appropriately

– To be a preferred applicant for any Nortel Networks position anywhere in
the world. (The company will only advertise after making sure no internal
individual is interested in a vacant position)

– An open-door policy where ideas are listened to and company policy is
clearly and honestly communicated

– To be a part of an organisation on the cutting edge of the New Internet,
incorporating the most innovative technology

To ensure these core values mean something to each and every employee,
managers are required to interview their top talent to find out what is
uniquely important to them. In particular, to find out what proposals they
would not be able to refuse should a competitor approach them.

"In that way," explains Lima, "we are able to pre-empt any
dissatisfaction that might cause a key employee to leave. Only by anticipating
their needs are we able to meet people’s expectations and keep them on our

In other Brazilian companies, attention is also being paid to professional
development and the corporate climate, reports Marcelo Mariaca, senior
consulting partner and director at executive search and senior outplacement
firm, Mariaca & Associates, which has offices in Sao Paulo and Rio de Janeiro.

"Talented individuals are interested in receiving training and
opportunities to develop competencies that will be useful to them in the
future," says Mariaca.

"Young, bright Brazilians appreciate the opportunity for
company-sponsored MBA programmes with North American business schools. They
want to work with ‘A team’ individuals and for senior management that reduces
artificial barriers and embodies a supportive, coaching leadership style."

This is also the position in Mexico, according to Linda Shore, general
director of Shore InterSearch, an executive search and HR consulting company
based in Mexico City. In addition to key inducements such as a competitive
salary, sign-on bonus and stock options, she says a highly motivating
organisational climate with excellent leaders, well-defined business process
models, constant training and development, and communication programs that keep
employees happy and updated are all important retention strategies.

An additional factor important in Mexico, she points out, is work-life
balance. "Companies are searching for highly talented, empowered
self-starters who can multitask, feel comfortable in more than two cultures and
will roll up their sleeves to make things happen. But these candidates also
have spiritual values and want to dedicate time to their personal life,

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