Multi Latin As Report

8/3/2019 Multi Latin As Report

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Multilatinas Human Capital

Practices surveyReport by GRS Montevideo*

* The survey upon which this report is based was designed and conducted by the Emerging Markets MNCs

Challenge team in GRS Montevideo led by Magdalena Ramada and Christian Tondo. The report itself waswritten by Natalia Aranco, Federico Cabrera, Mara da Silva, Agustina de los Reyes, Juan Scasso, Karla Estavillo,Jessica Gerpe and Magdalena Ramada. John Bremen and Imran Qureshi acted as consulting members of the EMMNCs Challenge team during design and implementation stages and their help is hereby gratefully acknowledged.


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study was to assess to what extent Multilatinasdiffer from their counterparts in other regions ofthe world in terms of their human resources (HR),as well as to identify and analyze how Multilatinascoped with the latest economic crisis. We furtheraimed to identify how Multilatinas face problemsof attraction and retention of talent; how theydesign strategic rewards; and if there is a global

structure of corporate governance in place tocompete successfully for talent with competitorsfrom more developed countries. The overall resultspoint to Multilatinas as a powerful competitiveforce in the future, which will aggressively expandinto developed markets.

Several decades ago, local rms were viewed asweak and ineffective and virtually all the capital

ow was into Latin America. Only developedcountries multinational companies (MNCs) hadthe necessary capital and skills to succeed acrossmultiple markets. This may have been true twodecades ago but is certainly not the case today.

Formally, we de ne Multilatinas as multinationalrms with headquarters in Latin American

countries that manage their production and/orprovide services in several countries and thatare active on at least two continents or broaderregions. Their increased international presenceover the past decade can be seen in the growthof outwards Latin American FDI. According toUNCTAD2 , FDI ows from Latin America to the

Multilatinas: capitalizing regional strengthsThere has been much focus on the emergingrole of Asian companies after the global nancialcrisis. In countries such as China, companieshave responded dynamically and effectively to theturbulence and continued to grow, whereas rms inthe economies of North America and Europe havecut payrolls and still face signi cant challenges.Yet, in these discussions there has been virtuallyno mention of companies in Latin America, aregion which has on many fronts weathered the

nancial storms more effectively than Asia. Evenbefore this crisis, many companies were payingmuch more attention to prospects in Asia thanin Latin America in spite of the latters strongfundamentals, such as a skilled labour supply thatrivals China 1 and robust domestic markets that aremore mature than many in Asia.

In this report, we examine how some topLatin American multinationals or Multilatinas have responded to the nancial crisis in termsof their human capital practices. The results arestriking. We nd that unlike in Asia, where rmsface strong attraction-retention issues; theseare only mild in Latin America. The reason is therelatively strong level of local human capital andthe relative disinterest of foreign multinationals.This has enabled the Multilatinas with their lowlevels of leverage and ready access to capital to really take advantage of the crisis andgrow strongly.

We conducted a survey in late 2009 with

interviews of 25 companies in Argentina, Brazil,Chile, Mexico and Uruguay. The purpose of our

1 See Lluberas, R. (2007), The untapped skilled labor of Latin America inHorizons A global view of Offshoring , Watson Wyatt Worldwide.

2 United Nations Conference on Trade and Development .


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Multilatinas Human Capital Practices survey 3

rest of the world were USD 13,487 million a yearon average during the period 1990 to 2000. This

gure more than tripled in the past 10 years,reaching USD 63,207 million in 2008.

After a rst stage of increased foreign presencevia expansion of exports, Multilatinas mainlyof Brazilian and Mexican origin started anaggressive internationalization strategy basedon outward investments. These investmentstook place both in form of green elds and M&A,although in the past ve years acquisitionshave been the preferred mode. In fact, after anindustrial transition decade during the 1990s away from the import substitution modelsprevailing until the 1980s and towards anincreasingly export-oriented industry Multilatinaswere able to consolidate their strategy at a global

level. Initially forced to look for new markets as asurvivorship strategy due to increased competitionwith developed countries MNCs in their localmarkets, Multilatinas were then able to take afurther step forward in their multinationalizationby recognizing that they had a competitiveadvantage to serve those new markets not onlythrough exports but through direct local presence.This started Multilatinas second phase ofinternationalization that focused on more than

just seeking new markets. In contrast to Chineseand Indian MNCs, whose main motivations to

invest abroad were the need for energy resourcesand increased competition in their local markets,Multilatinas saw this second stage of going globalas a way of growing through the improvementof their risk pro le and hence of their access to

nancial resources. Becoming global became away of Multilatinas appearing more diversi edin terms of risk and of having cheaper accessto external nancing. Still, accompanying thisglobalization process with higher levels of internalconsolidation, better horizontal and verticalintegration and strong governance mechanismswas also needed to start being perceived byinternational investors as stable players in theMNC arena.

The year 2000 is seen as the major turningpoint for outward FDI and increased M&A activityamong Multilatinas. Still, different stages canbe recognized in the past 10 years of theirinternationalization process. Although increasedM&A activity and outward investments were aconstant factor of their globalization strategy, inthe past ve years and probably anticipatingand weathering the nancial crisis after the

nancial turmoil around 2002 in the region Multilatinas became less leveraged and their

improved capitalization is today key to makingthe best of opportunities arising from the currenteconomic slowdown for those with healthybalance sheets.

Indeed, Multilatinas appear to ful ll all necessaryconditions to take advantage of the currenteconomic environment for their global strategy.They followed the trend of other Latin American

rms investing in training and innovation inorganization and production processes ratherthan in new products during the crisis, as away to cope with innovation risk and to reducecosts through increased ef ciency. This combinedwith low leverage ratios position them favourablyto be able to further grow in the mediumterm, outperforming those enterprises thatare only now restructuring and balancing their

budgets to deal with the consequences of theeconomic downturn.

In the context of rapid internationalization, the wayMultilatinas deal with talent and the extent to whichtheir human resource strategies are aligned totheir global positioning becomes key to understandhow they further differentiate themselves fromdeveloped countries MNCs. Multilatinas recentlyincreased role as contenders in the global warfor talent, and their growth involving outboundacquisitions make this a perfect time to surveytheir human capital practices.

The results suggest that Multilatinas have muchfewer talent attraction and retention problemsthan Asia-Paci c multinationals. The fact thatLatin America has a large and increasingly skilledtalent pool makes their attraction and retentionproblems more similar to those of european andUS counterparts than to those of their emergingmarkets peers. In fact, Multilatinas are mainlylooking for talent in the local labour supply,even when recruiting technical staff, specialistsand professionals. This supports the idea of anuntapped skilled labour supply in Latin America 3 ,

as well as the notion that Latin American talentis versatile, exible and mobile across industries.Further, Multilatinas seem to adapt and developthe majority of their talent to their rms needsthrough in-house and on-the-job training, insteadof looking for specialized talent within theirindustry or among their competitors workforce.This also implies that Multilatinas are not yetcompeting for talent at a global level given theyare using the competitive advantage of knowing

3 See Lluberas, R. (2007), The untapped skilled labor of Latin America inHorizons A global view of Offshoring , Watson Wyatt Worldwide.


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Finally, there is a belief that senior executives inMultilatinas have weathered so many economiccrises that they have developed better tools toface them. Our results support this idea in termsof human capital practices since none of the

interviewed rms sees attracting nor retainingsenior executives as an issue; and the reportedHR practices seem to have been more robust tothe crisis than in other emerging regions in termsof employees retained. Still, when compared tothe US, Multilatinas have more dif culty holdingonto employees in all categories and they furtherdeclare that their HR strategy lags behind theirpeers from developed countries.

and using the untapped local talent rst, but assuch they pose a threat to developed countriesMNCs trying to expand in Latin America, sincethey seem better prepared to nd and to retainhigh skilled workers in these markets.

Moreover, we nd that there is a certain mismatchbetween employers and employees perceptionwhen it comes to base pay as the main reasonfor leaving an organization; here again in line withsimilar ndings for Europe and the US. In addition,career development opportunities seem to mattermore as a reason both to join and to leave than inother regions.

About the surveyThe study was performed during 2009 andincludes information of 25 Multilatinas from vecountries: Argentina, Brazil, Chile, Mexico andUruguay. The surveyed companies have between

just 80 and 103,000 employees; collectively theytotal 600,000 employees.

Given the sustained growth of these companiesin this period, we decided to focus this studyon the best-performing Multilatinas only. Theuniverse of companies surveyed was developedusing the Forbes ranking of multinationalcompanies, the Multilatinas ranking from themagazine Amrica Economa, the United NationsConference on Trade and Development (UNCTAD),as well as other sources.

The purpose of this study is to assess to whatextent Multilatinas differ from their counterpartsin other regions of the world in terms of theirHR, as well as to identify and analyze howMultilatinas coped with the latest economic crisis.We further aim to identify how Multilatinas faceproblems of attraction and retention of talent,how they design strategic rewards, and if there

is a global structure of corporate governancein place to compete successfully for talent withcompetitors from developed countries. The resultsare further compared with comparable data formultinationals in other regions, so as to highlightMultilatinas strengths and weaknesses withrespect to talent management.

We gathered the information through personalinterviews and were hence able to collect bothquantitative and qualitative data, by directlytalking to the Multilatinas HR managers. Thestudy was conducted during November andDecember 2009 based on a questionnaire with

ve sections focusing on: workforce planning; therms reaction to economic downturn; sourcing

and attraction of talent; retention of talent; andperformance and rewards.

The answers to this survey are based on thecircumstances existing in the geographicalarea of responsibility of each HR manager. Ofthe 25 interviewed managers, 12 have globalresponsibilities and 13 are responsible for thecountry where the rm has its headquarters.


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Key ndings

Worforce planning When doing a formal analysis of their workforce,

companies focus on local rather than on foreignaspects of the labour market.

Multilatinas are mainly looking for talent in thelocal labour pool, including from other industries,even when recruiting technical staff, specialistsand/or professionals.

Multilatinas seem to adapt and developthe majority of their talent to their rmsneeds through in-house and on-the-jobtraining, instead of looking for specializedtalent globally within their industry or from

competitors workforce. Nearly half of the companies interviewed made

changes in their talent processes to adapt tothe new staf ng needs expected for the next

ve years. Most changes were among talentrecruiting and selection processes.

Managing the crisis Almost all companies were negatively affected

by the economic downtown but most believethey have managed this impact better than other

rms in their industries.

Despite the negative effects of the economicdownturn, around half of the companies madesalary adjustments based on performanceand external benchmarking for all categoriesof employees.

During the crisis, companies talent retentionwas prioritized over attraction strategies.

In terms of the retention of employees, thereported HR practices seem to have been morerobust during the crisis than those of rms inother emerging regions.

Sourcing, attracting and retaining talent All rms declared the local talent pool as the

main source of recruitment. The reasons for prospective employees to join

Multilatinas are concentrated, whereas for USmultinationals they are more diverse.

Base pay, employer reputation and careerdevelopment opportunities are among the topthree reasons for prospective employees to jointhe organization in Latin America and amongthe top four in the United States.

With regard to recently graduated and general

employees, Multilatinas acknowledge fewerattraction problems than US multinationals.

None of the interviewed rms sees attractingor retaining senior executives as an issue.

The three main reasons for employees toleave the organization are base pay, careeropportunities and promotion opportunities;both in Latin America and the US.

Multilatinas have more dif cultyretaining employees in all categories thanUS multinationals.

There is a certain mismatch between

employers and employees perception when itcomes to base pay as a main reason for leavingan organization.

Career development opportunities seem tomatter more as a reason both to join and toleave, than in other emerging markets.

Multilatinas have far fewer talent attractionand retention problems than Asia-Paci cmultinationals.

The fact that Latin America has a largeand increasingly skilled talent pool renders

rms attraction and retention problemsmore like those of their European and UScounterparts than to those of their emergingmarkets peers.

Multilatinas are not yet competing for talentat a global level, given they are using thecompetitive advantage of knowing and usingthe untapped local talent rst.

Performance and rewards

Almost all companies declared that theirHR strategy lagged behind their peers fromdeveloped countries.

Both salary increases and promotions areprimarily determined by the performance ofthe employee.

Still, there is a considerable number of rmsdeclaring that key HR decisions are madediscretionarily and/or by a select numberof people.

US rms and Multilatinas seem to have asimilar degree of centralization regarding HRmanagement, and global recruitment andselection decisions criteria.


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A large majority of rms (almost 85%) did somekind of analysis related to workforce planning. Anaf rmative answer indicates that there was ananalysis of the mentioned variable for the next twoto ve years.

The most common analysis is to determinehow staf ng needs will change in the near future;60% of rms analyze this issue. In addition,more than half of the companies monitor theproportion of their employees eligible to retire inthe near future.

Some aspects, such as supply and demandof talent and the skill-set of workers are analyzedby around 40% of the companies but only witha local perspective. Only a small number ofcompanies claimed to analyze the last three

factors formally.

Almost all of the companies that made a formalanalysis about workforce planning have modi edsome of their HR processes to cope with theexcess or shortage of talent. Nearly half of them(44%) changed their recruiting process to adaptit to new staf ng needs. Among the modi edprocesses were the selection process (40%),career management processes (36%), and trainingprocesses (36%).

From the results obtained we conclude that

Multilatinas that carry out a formal analysis ofthe workforce also have active roles in terms of

Key termsTalent: the supply of labour with one or more

speci c skills or abilities.Employee Value Proposition (EVP): collectivearray of programs that the organization offersin exchange for employment, including pay,bene ts, perquisites, work environment, careeropportunities, training.

Total rewards: the complete set of monetary andnon-monetary rewards offered to employees.Monetary rewards include base salary, short- andlong-term incentives, cash recognition and groupand healthcare and retirement bene ts. Non-monetary rewards include non-cash recognition,training and development, and work environment.

Critical-skill employees: employees

with the skills an organization needs tocompete effectively.

Top-performing employees: employees whoseperformance was rated by their supervisor in theirmost recent performance review to far exceedexpectations or nd itself in the top 10% of hisor her working group.

High-potential employees: employeeswho demonstrate high-level contributions,organizational values, potential to move up toan identi ed position within a given timeframe,and to assume greater responsibility.

Workforce planning

Figure 1. Formal analysis

Companies that performed a formal analysis of:

Changes in their staf ng needs 60%

The proportion of their workforce

eligible to retire52%

The local supply of talent 48%

The skill- set of local workers 44%

The local demand for workers 36%

The skill-set of foreign workers 12%

The foreign demand for talent 12%

The foreign supply of talent 8%

Figure 2. Changes in processesProcesses changed to address talent surplusor shortages:Recruiting 44%

Selection 40%

Career management 36%

Training 36%

Promotion 24%

Employee Value Proposition 12%

Work 8%

workforce planning, as almost all of them tookactions to modify at least one of their talentrelated processes.


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Figure 3. Impact of the economic crisis

Was the industry of the company negatively affected by theeconomic crisis?

Yes, to a great extent 40%

Yes, to a moderate extent 48%

Yes, to a slight extent 8%

Not at all 4%

On the contrary, it has bene ted from it 0%

How well has the company managed the negative impact compared withother rms in the industry?

Substantially better than peer group 2%

Slightly better then peer group 52%

About the same as peers 16%

Slightly worse then peer group 0%

Substantially worse than peer group 0%

Almost all companies interviewed were negatively

affected by the economic downturn (96%) but mostof them judge that they have managed this impactbetter than their peers.

Within the largest companies interviewed, (thosewith more than 2,500 employees), 13 of 14considered themselves to have been affected bythe crisis. Among the smaller companies, nineof 11 said they were affected to a moderate or

Reaction to economic downturn

Figure 4. Measures and reaction

Actions taken by companies as a reaction to the currenteconomic downturn:

Hiring freeze 48%

Layoffs/redundancy/reduction in workforce 48%

Organizational restructuring 44%

Reduced working hours 28%

Salary freeze 28%

Sabbaticals 16%

No bonus opportunity 16%

Expenditure reductions 16%

Staff re-allocation across countries 16%

Training reductions 16%

great extent by the recent turmoil. Only 4% of the

companies said they were not affected by thecrisis; none of them believed they managed thenegative impact worse than their peers.

The most common measures taken by rms toface the economic downturn were to freeze newhiring, reduce the workforce, create redundanciesand organizational restructuring; that is, actionsmainly affecting workforce size. Other actions


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Employers perceptionsEmployers were asked their opinion about theimpact of the previously mentioned measures onemployees attitudes and perceptions.

When asked about talent mobility, there is no clearperception of the effect of the economic crisis onemployees mobility and hence on retention needs.Managers were equally divided between thosewho agree that market mobility will decrease andthose who do not. In fact, 36% of the managersdo not have a clear opinion about this statementand think that it is highly linked to an employeesindividual attributes.

Interviewed managers said that the market isdepressed, but that there is more mobility forexceptional cases, especially for top-performersand critical-skill talent. Some rms experienced theloss of top-performers who were then able to ndother good job opportunities during the downturn.

Employees are not going anywhere in the current economic environment

32%

36%

32%

Partially agree/disagree

Agree

Disagree

Figure 6. Employers perceptions regarding talent mobility

Figure 7. Employers perceptions regarding the effects of salary measures (understanding)

58%

34%

8%


Agree

Disagree

Employees understand salary freeze and bene ts cuts

In line with the previous comment, othermanagers mentioned that opportunities dependon characteristics such as age, expertise oreducational background.

When asked about the statement: Employeesunderstand salary freeze and bene ts cuts, morethan half of companies (58%) nd that employeesfully understand pay freezes and bene ts cutsgiven the economic downturn. Just 8% disagreewith this statement, and 34% do not have a clearopinion about it.

In the 34% of mixed responses, the mostmentioned argument by managers is that theyagree on the statement provided certain otherconditions are given. They argued that employeescomprehension of these types of measuresdepends on how they are communicated; on whatthe competition is doing; and on employeesorganizational rank. They believe that employeesunderstand these measures if they are well


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Despite the 53% believing employees understandpay freezes and bene ts cuts, only 25% disagreeon top-performers feeling demotivated by thesemeasures. So, most managers believe that evenwhile understanding the measures, these will have

an important impact on employees performance.More than 60% of the companies nd that thecurrent economic crisis is a great opportunity torecruit top-performing and unskilled employees.There is a large overlapping of managers believingthat their employees understand their own rmsmeasures, but that their competitions employeesdissatisfaction is a good opportunity to recruittalent. This shows that rms rather tend to taketheir employees understanding for granted,even when they seem to recognize that there isincreased mobility within the talent supply.

communicated and they see that there isconsistency in these measures across the rm.Further they think that if these types of actionsare taken by other companies in the market,employees are more likely to understand them.

Other managers said that although mostemployees realize that cost reductions arenecessary, there is usually a small group ofemployees that still claims against employers.Finally, they declared that employees at higherbands are more understanding.

With respect to top-performers being demotivatedby the measures taken during the crisis, morethan 60% of managers agree on this, while 25%disagree on this statement, and 12% do not havea clear-cut opinion.

Figure 8. Employers perceptions regarding the effects of salary measures (motivation)

63%

12%

25%


Agree

Disagree

Top-performing employees will be demotivated by pay freezes and bene ts cuts

Figure 9. Employers perceptions regarding the effects of the economic crisis ontalent attraction

61%

9%

30%


Agree

Disagree

The current economic environment is a great opportunity to recruittop-performing and unskilled employees


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Figure 11. Employers perception attraction and retention

The current economic environment is agreat opportunity to recruit top-performing and unskilledemployees

AgreePartially agree/partially disagree

Disagree

Employeesare not goinganywhere in thecurrent economic

environment

Agree 62% 0% 38%

Partially agree/

partially disagree44% 12% 44%

Disagree 83% 17% 0%

Figure 10. Employers perception salary measures and motivation

Top-performing employees will be demotivated by pay

freezes and bene ts cuts

AgreePartially agree/partially disagree

Disagree

Employeesunderstand salaryfreeze andbene ts cuts

Agree 57% 7% 36%

Partially agree/

partially disagree62% 25% 13%

Disagree 100% 0% 0%

Employers perceptionsCompanies that agree that employees understandsalary freeze and bene ts cuts also agreethat top-performers are demotivated by these

measures in 57% of the cases. This seemscontradictory, especially if employees are believedto understand that these actions were not relatedto their individual performance.

Overall, more than half of managers thinkingthat employees understand these measuresstill anticipate a decline in top-performersperformance due to demotivation. On the otherhand, and as expected, all those employers whodo not think that employees understand themeasures, also agree top-performers willbe demotivated.

Of those employers who think that employeesare not going anywhere in the crisis, 62% alsothink that the current economic environment isa great opportunity to hire, which seems to be acontradiction. In fact, if labour market mobilityis seen as low, it should also be thought thatrecruiting new talent is dif cult.

There seems to be a tendency among managersto see more understanding for measures takenduring the downturn among their own employeesthan among those of the competition. Inaddition, some rms think that they can take

advantage of the current situation: as the labourdemand is low, employees who are looking foranother job when leaving a sinking ship mayaccept a lower salary than in normal times,representing a great opportunity for rms whichcan afford new hires.

On the other hand, if rms think that employeesare moving, it is reasonable that they feel this isa good opportunity to hire this is consistent withthe 83% overlap between those two answers.

E ects on talent attractionand retentionMore than 40% of the companies nd that theretention of talent is not affected by the crisis.This is consistent with the thinking that there arefewer opportunities in the labour market due to theeconomic downturn.


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More than half of the interviewed managers thinkthat the attraction of talent will not be affectedby the crisis. The rest of the opinions are dividedbetween 20% that think it will be positivelyaffected and 28% that it will be negatively affected

by the current economic environment.Some of the most mentioned arguments fornegative effects are higher competition in thelabour market and bad publicity for companiesthat had to freeze salaries, cut bene ts, or

re employees. On the other hand, the mainreasons for positive effects are the increaseof (potential and actual) labour supply and the

On the contrary, another 44% think that itis now more dif cult to retain talent. Thestrongest argument for this is that employeeswith outstanding performance may nd otheropportunities in the market during crisis times.

This belief is consistent with managers seeingtheir employees demotivated by salary freezesand bene ts cuts.

Only 12% of the companies think they canbene t from the crisis in terms of the retention ofemployees. The main reason mentioned is thatthere are fewer opportunities in the market andthis can reduce turnover.

Figure 12. Effect of the economic crisis on talent retention

44%

44%

12%

Negatively affected

Not affected

Positively affected

52%

28%

20%

Negatively affected

Not affected

Positively affected

Figure 13. Effect of the economic crisis on talent attraction

Figure 14. Effects on talent attraction and retention

Effect on talent retention

Positivelyaffected

Not affectedNegativelyaffected

Effect on talentattraction

Positively affected 0% 40% 60%

Not affected 23% 54% 23%

Negatively affected 0% 29% 71%


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Figure 17. Effects on talent retention and employers perceptions (mobility)

Retention problems

Yes No

Employees are not goinganywhere in the current

economic environment

Agree 50% 50%

Partially agree/

partially disagree

89% 11%

Disagree 100% 0%

Figure 15. Effects on talent retention and employers perceptions (understanding)

Retention problems

Yes No

Employeesunderstand salary freezeand bene ts cuts

Agree 79% 21%

Partially agree/

partially disagree88% 12%

Disagree 50% 50%

Figure 16. Effects on talent retention and employers perceptions (motivation)

Retention problems

Yes No

Top-performing employees

will be demotivated by payfreezes and bene ts cuts

Agree 73% 27%

Partially agree/

partially disagree 100% 0%

Disagree 83% 17%

availability of more quali ed workers lookingfor new opportunities

With respect to the interaction of the economiccrisis effects on talent attraction and on talentretention, 60% of the companies that think theeffects on talent attraction are positive alsothink that the effects on talent retention arenegative. Although at rst sight this seems to becontradictory it may be evidence that:

The reasons employees consider when joiningan organization are different from the reasonsthey take into account when deciding to stay inthat rm.

Firms take advantage of the crisis to change thepro le of their employees.

Firms may be positively biased when believingemployees understand their measures and whilefocusing on nding new talent they fail to seethe needs of existing staff.

Of the 28% of the rms that were negativelyaffected in their talent attraction, 71% were also

negatively affected on talent retention, showingthat almost 20% of companies faced dif culties tomaintain and to attract new talent.

Seventy nine percent of the employers who thinkthat employees understand the reasons behindsalary freeze and bene ts cuts also acknowledgehaving talent-retention problems. This depictsa mismatch between the way employers believethese measures were understood by theiremployees and their employees actual reaction.It further supports the fact that rms seempositively biased towards believing their employeesunderstand their measures and failing to see theiractual needs. On the other hand, it also may implythat rms retention problems are not related tomeasures affecting salaries or bene ts.

The perception that top-performers will bedemotivated by the measures taken in theeconomic downturn is reinforced, with 73% of

the employers agreeing with this statement alsodeclaring retention problems.


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Figure 18. Priorities during economic crisis

Actions consider as priorities during currenteconomic downturn:

Retaining top-performer employees 88%

Retaining critical-skills employees 80%

Retaining engaged employees 76%

Attracting recent university graduates 44%

Attracting critical-skills employees 36%

Replacing high-earning employees with

cheaper talent16%

Replacing older employees with

younger talent 12%

On the other hand, 83% of those who thinktop-performing employees will not be demotivatedalso have retention problems, which couldbe implying:

A wrong perception from employers oftop-performers motivation.

A tendency to believe that measures are wellcommunicated and understood and will notaffect the workforces performance.

Myopia or lack of a global overview that seesboth retention and talent performance from onlya single perspective.

That retention problems are of a more structural

nature and go beyond the speci c actions takenduring the crisis.

Among those rms which agree that employeesmobility is not an issue in the current economicenvironment, 50% declared retention problems.This again shows that there is a mismatchbetween the way employers perceive the labourmarket environment and the problems they arefacing in their own rms.

During the economic crisis, Multilatinas focusedon retaining employees with remarkable features,

such as top-performers (88%), critical-skills (80%)and engaged employees (76%). Furthermore, they

said that they stopped hiring during the economiccrisis. This decision coincides with the focusdeclared by managers on retention ratherthan attraction.

Attraction of recent university graduates was apriority for 44% of the companies, and attractionof critical-skills employees for only 36%. Fewcompanies declare using the current economicsituation to replace high-earning employees

with cheaper talent, or older employees withyounger talent.


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of attraction. Approximately one-third of the

companies mentioned that employees areattracted by the base pay and the nature ofthe work. Other reasons, such as workingenvironment, promotion opportunities, organizationculture and job security, were also mentioned bythe interviewed managers.

All rms in our analysis use the local talent poolas the main source of recruitment. This happensfor all categories of employees. Companies onlyseek foreign talent in speci c cases where certaincapabilities in the local market are scarce.

The foreign talent pool and potential repatriatesare rather seen as sources of executive talentand talent with a very speci c set of skills. This isconsistent with the broad availability of technicaltalent at reasonable cost in emerging markets;while senior executives and talent with soft skillsare rarer.

Although companies tend to restrict the searchfor employees to the local market, they do notlimit it to their competitors. Above 75% of thecompanies recruit personnel from companies inother industries.

As expected, when looking for general employeesmore companies recruit from other industries thanwhen looking for employees with speci c skills.Professionals, while also mainly recruited fromother industries, still have the highest proportionof intra-industry recruitment, with 25% of rmsdeclaring this cadre comes from competitors.

In line with these ndings, more than three-quartersof interviewed Multilatinas claimed not to monitor orrecruit their employees from their competitors.

Almost two-thirds of companies reported having

dif culty attracting critical-skill, top-performing andhigh-potential employees. Most of them believethat the dif culty is relatively modest, but a few

rms (8%) declared major problems when hiringworkers from these categories.

However, only a minority admitted to havingproblems when attracting recent universitygraduates or general employees. Moreover,none of the interviewed managers think thatthe attraction of recent university graduates isa major problem.

Interviewed HR managers believe that thereare speci c characteristics of their companiesthat make them attractive. Career developmentopportunities and employer reputation areindicated by 56% of the companies as elements

Figure 19. Reasons for joining the rm

Top reasons a prospective employee would beattracted to the company:

Career development opportunities 56%

Employer reputation 56%

Base pay 36%

Nature of work 32%

Working environment 24%

Promotion opportunities 20%

Organization culture 20%

Job security 16%

Percentage

0 10 20 30 40 50 60 70 80

68Critical-skill employees

68High-potential employees

60Top-performing employees

24Recent university graduates

40General employees

Figure 20. Attraction problems by category of employees

Sourcing and attraction of talent


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Figure 22. Sources of talent by industry

0 10 20 30 40 50 60 70 80 90 100

Companies in other industries Competitors

75 25

Technical/professional

92 8General employees

82 18Other speci c skills

Senior management78 22

Percentage

Figure 23. Recruiting and selection

Recruiting and selection decisions arebased on:

Global criteria 56%

Country/region speci c criteria 36%

Ad hoc 8%

Recruiting and selection decisions aretaken by:

A local recruiting team 72%

An individual manager 28%

A global recruiting team 16%

Percentage

0 10 20 30 40 50 60 70 80 90 100

55

18

27

Senior management

Local tal en t Foreign talen t Poten ti al repa tr ia tes

Other speci c skills67

19

14

General employees83

10

7

83

Technical/professional

7

10

Figure 21. Local versus foreign sources of talent

Note: the category Other speci c skills includes employees with industry-speci c skills thatcannot be considered as technical or professional staff.

Recruitment and selection decisions are in thehands of a local recruitment team in 72% of cases.In the other 28% these decisions are taken byindividual managers, who mostly act in conjunctionwith a recruiting team, either global or local.

In 56% of the cases recruiting and selectiondecisions are based on global criteria, whichare applied by either a local or a global team.Almost 8% of the companies apply ad hoc criteriaand claimed not to have a speci c process forrecruiting and selection. In these cases decisions

are taken by local recruiting teams, either alone orcombined with a manager.


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Retention of talentexperienced retention problems despite adjusting

salaries through competitive benchmarking orexternal comparison.

Almost all companies (88%) declared laggingbehind their peers from developed countries in atleast one of the components of their HR strategy.

Performance assessment of talents and offeringcareer development opportunities were the mostmentioned areas in which companies think thatthey lag behind peers from developed countries.

Of the interviewed Multilatinas 24% also nd itdif cult to link performance to pay and to develop

a total rewards philosophy. Almost 90% think thatthey are competitive in terms of the compensationoffered. Finally, the leadership skill of executivetalent is not seen as an area for development by80% of the rms.

Although only 12% of rms believe that they lagbehind their developed countries peers regardingthe level of compensation offered, 60% of themanagers said that employees leave the rm dueto base pay. On the one hand, this could re ect

Figure 25. Retention problems and salary adjustments in high-potential, top-performing andcritical-skills employees

Retention problems

Yes No

Measure takenby the rm

Freeze salaries 86% 14%

Increase salaries 60% 40%

Adjust salaries through competitive benchmark or

external comparison 85% 15%

Percentage

0 10 20 30 4 0 5 0 60 70 80

High-potential employees76

General employees52

Top-performing employees72

Critical-skills employees68

Recent university graduates52

Figure 24. Retention problems by category of employees

When rms were asked about retention of talent,

76% of the companies declared dif cultiesholding onto high-potential workers, while 72%have problems retaining top-performers and 68%retaining critical-skill employees.

The majority of employers declared having moderateproblems in retaining employees in these threeabove mentioned groups, while only a few of themconsidered retention here a major problem.

Keeping recent university graduates as well asgeneral employees is a problem for more than halfof the interviewed rms, but the dif culty is lowerthan for other categories.

Of the interviewed companies, 80% declaredexperiencing dif culties retaining one or more ofthe following groups of employees: high-potential,top-performing and critical-skill employees.

Companies that freeze salaries had problemsholding onto employees in at least one of thesegroups in 86% of cases. Retention problems alsoappeared in companies that increased salaries,but to a less extent (60%). Finally, 85% also


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a mismatch between employers and employeesperceptions about the competitiveness of theremuneration package. On the other hand, itmay evidence a situation in which Multilatinasare losing their employees to local rms and

not to developed countries multinationals.Regarding other reasons for leaving the rm,52% of managers mentioned the lack of careerdevelopment opportunities and almost 40%felt that lack of promotion opportunities is alsoan important reason for employees to leavethe organization.

Several factors mentioned as reasons for leavinga company were also declared as the mainreasons for joining, such as career developmentopportunities, base pay and nature of work. Thisapparent inconsistency could be re ecting a high

level of competition for talent in the labour market.It also seems to con rm the tendency of taking

Figure 26. Lags in HR strategies

Areas where your organization lags behind its developed countries peersin terms of HR strategy:

Performance assessment of talent 28%

Offering career development opportunities 28%

Linking performance to pay 24%

Development of a total rewards philosophy 24%

Communication of Employee Value Proposition 20%

Leadership skills of managers/supervisors 20%

Generating long-term commitment among employees 12%

Level of compensation offered 12%

Material resources and tools available 12%

Figure 27. Top reasons for leaving

What are the top three reasons that employees give for leavingyour organization?

Base pay 60%

Career development opportunities 52%

Promotion opportunities 40%

Nature of work 20%

Relationship with supervisor/manager 20%

Work/life balance 12%

Work-related stress 12%

Force majeure 12%

own employees for granted while focusing effortson attracting new talent. Further, it displays abetter external marketing of the rms practicesthan internal communication.

Of the interviewed companies, 60% say that base

pay is mentioned by their employees when leavingthe organization.

It is remarkable that this reason is mentioned toa greater extent in companies that adjusted theirsalaries or even made general salary increases,62% and 80% respectively, than in companies thatfreeze salaries (43%).

One explanation for this apparent paradox maybe rooted in conditions before the crisis. Somecompanies paying below market averages mayhave had to raise base remuneration in an attempt

to keep staff. Judging by the answers, thesecompanies have not been entirely successful.


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The results in Figure 29 seem in line with whatwas expected since most managers who agreedthat employees understand salary freeze (64%)state that base pay is not one of the top reasonsfor employees leaving the organization.

Additionally, all the managers interviewed whodo not believe employees understand salaryfreezes, acknowledged that base pay is one ofthe main reasons employees decide to leave theorganization. The retention problems declared by

rms that believe their employees understand themeasures they have undertaken seem thus tostem from reasons beyond pay.

Sixty seven percent of those who assent thattop-performing employees are demotivated by

Figure 28. Interaction of salary measures and base pay as reason for leaving the rm

Base pay among the three top reasonsfor leaving the organization

Yes No

Measuretaken bythe rm

Freeze salaries 43% 57%

Increase salaries 80% 20%

Adjust salaries through competitive benchmark or

external comparison62% 38%

Figure 29. Base pay as reason for leaving the rm and employers perception regarding theeffects of salary measures (understanding)


Yes No

Employees understandsalary freeze andbene ts cuts

Agree 36% 64%

Partially agree/


Disagree 100% 0%

freezes and bene ts cuts state that one ofthe main reasons for employees leaving isbase pay.

The same percentage state that employees arenot demotivated by these measures and did notconsider base pay as one of the main reasons forthem leaving.

These outcomes are also in conformity with ourexpectations since employers who state one ofthe main reasons for employees resigning is salarybase, would be likely to agree that freezes orbene ts cuts demotivate employees.

The consistency among the results discussedfurther supports the idea that most of the 83% of

Figure 30. Base pay as reason for leaving the rm and employers perception regarding theeffects of salary measures (motivation)


Yes No

Top-performing employeeswill be demotivated by payfreeze and bene ts cuts

Agree 67% 33%

Partially agree/


Disagree 33% 67%


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20 towerswatson.com

of the interviewed companies, such as introductionof more exible work schedules, more choices inbene ts, as well as implementation of off-cyclepay increases.

Strengths in HR strategyWhen it comes to identifying the companysstrengths in terms of HR, work climate is identi edas a major plus by most rms.

In second place, they mention points relatedto personal growth opportunities, such ascareer development, training and promotion.Companies said that employees, besidesconsidering the nature of the work, areinterested in their own development andpreferably on a fast path.

Managers also referred to some characteristics ofthe rm, such as the employers reputation, long-term stability, the complexity of the company generally also related to rm size and theprospect of facing challenging tasks as positiveaspects for retaining talent.

Finally, they also highlighted their remunerationpackage, including salary, compensation levels

and bene ts offered to their employees as afurther strength.

rms that disagree with that statement but stillhave retention problems are not necessarily failingon the compensation side.

Of those managers who say that employees arenot going anywhere, 62% also say that one of themain reasons for them leaving is base pay. At thesame time, half of those who disagree with thisaf rmation also maintain that base pay is one ofthe main reasons for employees departing.

This suggests that although base pay is animportant reason for employees quitting theorganization, the decision to stay or leave isdriven by factors other than pay.

Actions frequently taken by companies to reduceturnover are related to the exibility given tothe employee, and not to base pay or careeropportunities. This shows a discrepancy betweenthe actions taken by the companies and thereasons why they consider employees leave. At thesame time, such a discrepancy is understandablegiven these types of measure have less impact onthe cost side and are easier to implement than payadjustments during economic downturn.

Even though most rms did not take any actions

to reduce turnover in the past two years, certainmeasures were mentioned by approximately 20%

Figure 31. Base pay as reason for leaving the rm and employers perception regarding theeffects of salary measures (mobility)


Base pay No base pay

Employees are not goinganywhere in the currenteconomic environment

Agree 62% 38%

Partially agree/


Disagree 50% 50%

Figure 32. Actions to reduce employee turnover

What actions has your organization taken speci cally to reduce turnover in the past 24 months?

Introduced/improved exible work schedules 28%

Offered more choices or exibility in bene ts 24%Adjusted staf ng levels 20%

Off-cycle pay increases 20%

Increased base pay 16%

Accelerated career development opportunities 16%

Restructured jobs/job accountabilities 16%

Improvement in internal communication (EVP) 16%


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which they operate, while the rest apply different

criteria in different countries.This demysti es certain preconceptions aboutpractices in Latin American rms. According to oursurvey, most Multilatinas have global processesin place that link rewards to performance, similarto those applied in developed countries MNCs.Besides, tenure and seniority only play a role inrewards as a further signal of experience and forthe positions requiring more expertise. The beliefthat Multilatinas support long-tenure employeesrather than top-performers can be hence refuted.Even most of those having started as family-owned

enterprises are today applying state-of-the-artHR practices when it comes to performanceand rewards. Faster growth paths as a furtheringredient to their performance and rewardsstrategy make them sometimes even moreattractive than peers in developed countries.

Almost all companies (92%) take into account

employees performance for salary increases.In the case of market trends, cost-of-livingadjustments and external benchmarking are alsoconsidered as determinants of salary increases,although to a lesser extent (75%).

Finally, just a minority consider seniority andlength of tenure when deciding wage increases.

All the companies in the study say that theyconsider performance as the main factor whendeciding promotions. On the contrary, in the caseof length of tenure only 24% of them take it into

account. In general, consideration of length oftenure is related to speci c positions in whichexperience is a key aspect.

Further, 88% of the companies apply the samepromotion criteria in all the regions/countries in

Performance and rewards

Percentage

0 10 20 30 40 50 60 70 80 90 100

Performance92

Market trends76

Cost of living72

External benchmarking72

Seniority and length of tenure16

Figure 33. Salary increase determinants

Figure 34. Promotion criteria

0 10 20 30 40 50 60 70 80

Percentage

90 100

Global criteria88

Performance100

Seniority and length of tenure24


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Latin America is the region that claims leastproblems regarding attraction of any type ofemployees, being also the region where moremultinationals declared having no problem at allin attracting employees. Please note that thevery high gures of Latin American rms claimingno problems in attracting talent may just mirrora certain over-con dence or subjectivity bias inresponses. In particular, most Multilatinas declarehaving no recruiting dif culties at all within theclasses of recent university graduates (76%) andgeneral employees (60%). These two gures are

respectively more than double and triple those ofother regions.

Attraction problemsIn this section, we compare our results withthose from previous Towers Watson studies formultinationals from other regions. 4 Accordingto these surveys, companies from all regionsexperience problems in the attraction of talent.

While companies seem to have dif culties in theattraction of critical-skill, top-performing and high-potential employees, recent university graduatesare not a pressing problem for most rms.Additionally, on average multinationals seem to

have moderate to slight problems in the attractionof general employees.

Problems of attracting talent seem to be lesspressing for US and Latin American rms thanpeers in Asia-Paci c (AP) and Europe,Middle East and Africa (EMEA).

Figure 35. Dif culties in sourcing and attracting talent

RegionGreatextent

Moderateextent

Slightextent

Not at all

Critical-skillemployees

Asia-Paci c 39% 43% 16% 2%

Europe, Middle East and Africa 20% 51% 26% 3%

United States 13% 55% 21% 11%

Latin America 8% 52% 8% 32%

Top-performingemployees

Asia-Paci c 27% 47% 22% 4%




High-potentialemployees

Asia-Paci c 22% 49% 23% 6%




Recentuniversitygraduates

Asia-Paci c 2% 19% 32% 47%




Generalemployees

Asia-Paci c 2% 44% 43% 11%




Multilatinas versus multinationals fromother regions

4 Watson Wyatt Worldwide and WorldatWork (2009), Global StrategicRewardsSurvey 2008/2009.


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Figure 36. Sourcing and attraction of talent

Percentage

0 10 20 30 40 50 60

Base pay

Asia-Paci cEurope, Middle East & AfricaUnited StatesLatin America

Career development opportunities

32

40

39

36

35

37

46

Nature of work

14

17

Organization culture20

26

24

Promotion opportunities20

7

9

5

Job security16

5

15

17

Flexibility or choices in bene ts12

3

3

4

Organization's product/services8

18

15

19

Health care bene ts8

15

4

8

Employer reputation

34

35

41

56

56

32

34

22


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24 towerswatson.com

notably, receive up to treble the proportion ofmentions in Latin America than other regions.

In terms of base pay as an attraction factor,Multilatinas seem to think more similarly to theirpeers in developed countries than to Asia-Paci cMNCs. For the latter base pay is mentioned as themost important determinant of attraction and whilealmost 50% mention it in Asia-Paci c rms, it isonly cited by around 35% of rms on average in theother regions.

Furthermore, job security is shared as animportant factor by Multilatinas, Europeanand Asia-Paci c MNCs, while US MNCs do notmention it often enough as a reason making themattractive to talent. The reverse happens withhealthcare bene ts and organizational culture,which matter a lot more to US rms than to MNCs

in other parts of the world. In fact, while incentivepay, healthcare bene ts and the rms productsor services matter to around 20% of rms asattraction reasons in the US, less than 10% ofMultilatinas see these factors as important. Inthe case of healthcare bene ts this could be dueto the fact that in Latin America contributionsto the healthcare system are usually mandatoryand hence, they are not considered an additionalbene t in the compensation package. On thecontrary, exibility, promotion opportunities and

job security are mentioned more than twice as

often by Latin American rms than US MNCs asreasons for attraction.

In relation to developing economies, companies inAsia-Paci c are experiencing problems attractingemployees to a greater extent than those inLatin America. While 87% of rms in Asia-Paci creport having talent attraction problems of aslight to moderate extent, only 36% of rms do

so in Latin America. Even among groups such asrecent graduates, twice as many businessesadmit to having dif culties in Asia-Paci c thanin Latin America. With respect to the attractionof critical-skill employees in both regions,around 60% of rms admit to slight to moderateattraction problems.

Reasons why prospective employeesare drawn to an organizationAlthough there are important differences amongthese four regions, companies state that

employees are mostly attracted by employerreputation, career development opportunities,base pay and organizational culture.

The answers provided differentiate Latin Americanfrom peers in all three other regions with respectto the importance of certain rm attributes.The rms products and services matter lessin this region than in the other three, whilethe nature of work, the employers reputation,career development opportunities, promotionopportunities and exibility are much moreoften mentioned as talent attraction factors by

Multilatinas than by MNCs in other parts of theworld. Promotion opportunities and exibility,


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retention problems affect critical-skill and top-performing employees.

Latin America seems to have the leastpressing retention dif culties, particularly fortop-performing and critical-skill employees. Heretoo, the proportion of rms that declared noproblems in retaining employees is always largerin Latin America than in the other regions for allgroups of employees.

Even though Asia-Paci c companies are morelikely to experience greater problems thanLatin American peers attracting recent universitygraduates, this difference mitigates whenconsidering dif culties of retention, where in bothregions less than 5% of rms say theyhave problems.

Altogether the proportion of rms declaringgreat or moderate dif culties in retainingcritical-skill, top-performing and high-potentialemployees is 1.5 times larger in Asia-Paci c thanin Latin America.

Recruiting and selectiondecision-takingIn Latin America, the majority of the recruitmentand selection decisions are based on globalcriteria (56%), a similar percentage to the onedeclared by US global companies whose HRmanagement is centralized (53%).

This result is expected due to the fact that ascompanies become more global and extendthemselves, there is a need for the internalconsolidation of HR practices to keep up withdeveloped countries MNCs standards. Thisfurther supports the fact that Multilatinas haveinnovated in their organizational and talentprocesses lately, and that they have HR structuresin place that are more similar to those of US rmsthan their Asia-Paci c counterparts.

Retention problemsIn all four regions rms have greater attractionthan retention problems. The most important

Figure 37. Dif culties in the retention of talent

RegionGreatextent

Moderateextent

Slightextent

Not at all

Critical-skillemployees

Asia-Paci c 28% 47% 21% 4%




Top-performingemployees

Asia-Paci c 21% 44% 29% 6%




High-potential

employees

Asia-Paci c 16% 48% 30% 6%


United States 1% 41% 46% 12%Latin America 4% 40% 32% 24%

Recentuniversitygraduates

Asia-Paci c 3% 21% 38% 38%




Generalemployees

Asia-Paci c 2% 42% 47% 9%





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26 towerswatson.com

Figure 38. Retention of talent

Asia-Paci cEurope, Middle East & AfricaUnited StatesLatin America

Nature of work

Promotion opportunity

Career development opportunities

Base pay

Percentage

0 10 20 30 40 50 60 70

Incentive pay opportunity

Job security

Physical work environment

Work/life balance

Stress

Relationship with supervisor/manager

6044

45

51

52

59

38

51

40

43

33

26

20

9

13

22

20

35

25

30

12

10

13

15

12

30

23

22

8

5

3

8

5

4

3

8

10

5

10

1


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other parts of the world. This has two alternativeinterpretations. On one hand, it can be regardedas a further indicator of mature and effective

management, as well as healthy organizationstructures. On the other, it can be argued thatin developed countries multinationals, as basicneeds like salary and job security are covered,other factors such as work/life balance and therelationship with managers gain more importance.

It has to be noted that, according to ourresults, although base pay is considered tobe only the fourth-ranked reason for joiningthe company, it is the most important reasonmentioned by employees for leaving. This againhighlights a mismatch in perceptions or lack of

clear communication between employers andemployees with respect to their dissatisfaction.It can also be interpreted as a mismatchbetween the entry-level salary and the exit salary,indicating less-than-expected growth and/ora slow salary adjustment process.

Finally, Multilatinas and US MNCs assign a similarimportance to promotion opportunities as a reasonfor employees leaving, weighing double in the scorefrom Asia-Paci c. Conversely, with respect to thephysical work environment, US and Asia-Paci c

rms see it as less important, whereas Multilatinas

mention it twice as much; here being more similarto their European counterparts.

Reasons why employees leavean organizationAccording to the surveyed companies, the mainreasons for employees leaving the organizationseem to be similar in the four regions: base pay,career opportunities and promotion opportunities.

Still, the proportion of managers mentioningeach reason slightly differs from one region toanother. Certain patterns in those differencesare worth mentioning. Latin America is in linewith Asia-Paci c with respect to the importanceof career development opportunities and thenature of work, but while both regions rank the

rst motive as more important than in the US, the

latter prevails more among US managers answersthan in those from emerging markets MNCs.Moreover, stress and incentive pay are mentionedby less than 15% of the interviewees in all fourregions and differences among regions are notsigni cant with respect to those two factors asturnover triggers.

On the other hand, answers referring to fourreasons for leaving clearly distinguish Latin Americafrom all other three regions: base pay and jobsecurity are mentioned more in Multilatinasthan in other MNCs, while work/life balance and

the relationship with managers and supervisionseem to matter less in Latin America than in


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Finally, our results seem to con rm the idea ofsenior executives in Multilatinas having weathered

so many economic crises that they are currentlybetter positioned to face them. Indeed, none ofthe interviewed rms sees either attracting orretaining senior executives as an issue. Half of theinterviewed companies made salary adjustmentsbased on performance and external benchmarkingand most judge themselves to have managed thecrisis better than other rms in their industries.This matches the conclusion that during the crisis,talent retention was prioritized ahead of attraction.The reported HR practices further seem to havebeen more robust here during the crisis than inAsia in terms of employee retention.

When compared to the US, however, Multilatinashave more dif culty holding onto employees in allcategories and only have less trouble attractingemployees when it comes to new graduates. Onthe other hand, they still feel that their HR strategylags behind their US and European peers, althoughour hard data points to rms in all three regionshaving a similar degree of centralization regardingHR management as well as global recruitment andselection decisions criteria.

Overall, our study points to Multilatinas as a

powerful competitive force in the future, who willcontinue to aggressively expand into other markets.In fact, Multilatinas seem to have all the ingredientsneeded to take advantage of the current economicenvironment for their global strategy. By investingin training and innovation in organizational andproductive processes rather than new productsduring the crisis, Multilatinas have prospered within-house generated talent. This combined with lowleverage ratios position them favourably to be ableto further grow in the medium term, outperformingthose enterprises that are only now restructuring

and balancing their budgets to deal with theconsequences of the economic downturn.

Latin Americas strong fundamentals haveenabled the region, as well as its growing MNCs,

to better weather the crisis than North America,Europe and even Asia. Nevertheless, it seemsthat Multilatinas and their success in copingwith the crisis are still not included in mostdiscussions on multinationals as global economicagents. This report examines how Multilatinasreacted to the economic crisis in terms of theirHR strategies and it was able to nd remarkableresults. Unlike Asian MNCs, Multilatinas facefewer talent attraction-retention issues andare currently able to capitalize on the regionsstrong level of local talent. This, combined with

low levels of leverage, made it possible forMultilatinas to effectively weather and even growduring the crisis. Our survey interviewed the HRmanagers of 25 MNCs in Brazil, Chile, Mexicoand Uruguay. Besides looking at the way inwhich they reacted to the nancial crisis, we alsofocused on how Multilatinas differ from theircounterparts in other regions of the world interms of their HR strategies.

Latin Americas large and increasingly skilledtalent pool makes attraction-retention problems inMultilatinas more similar to those of their European

and US counterparts than those of emergingmarkets peers. Multilatinas are mainly looking fortalent in the local labour supply even when recruitingtechnical staff and professionals. In addition,Latin American MNCs adapt and develop themajority of their talent to their needs through in-house and on-the-job training, instead of lookingfor specialized talent within their industry or fromcompetitors. In other words, they are not yetcompeting for talent at a global level, but theirstrengths in the HR arena combined with their futuregrowth strategies will change that soon enough,

since they could be better prepared to nd and toretain high-skilled workers in emerging markets.

Conclusions


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