According to the latest World Bank report, Latin America (LATAM) is tracking to post its slowest annual growth rate since 2009.
The organization sees the region at a crossroads; improving productivity is emerging as a key underlying factor to address its challenges. It’s a contention that’s supported by the latest research findings from an Oxford Economics study that reveals how companies in Brazil face a looming talent crisis that threatens growth prospects.
The worldwide survey was supported by SAP and entitled, “Workforce 2020.” Its findings are based on feedback from executives and employees encompassing C-level, mid-level, and line-of-business managers, as well as front-line employees from a variety of industries. LATAM-based businesses cite the following top five labor market shifts: difficulty recruiting employees with base-level skills (66 percent), the globalization of the labor supply (58 percent), increasing number of intermittent/seasonal employees (56 percent), increasing numbers of consultant employees (55 percent), and an aging workforce (50 percent). Here is a summary of responses from Brazilian companies, including how they stack up against other parts of the world.
Millennials Are Different, But Not as Different as Companies Think
Unlike other major world regions surveyed, millennials entering the workforce didn’t make the top five labor shifts affecting workforce strategies at companies in Brazil. However, similar to respondents from all other countries, Brazilian executives appear to misunderstand millennials. Fifty-six percent think millennials expect more feedback on the job, but only 40 percent of millennials say they do. The survey reveals additional gaps between commonly-held assumptions about millennials and the reality. For example, just 32 percent of millennials are interested in quality of life over career path compared to 42 percent of non-millennials.
Companies Don’t Understand What Employees Really Want
Fewer Brazilian employees are satisfied or very satisfied with their jobs (23 percent) versus those in other major regions such as Europe and Asia-Pacific (both at 41 percent). However, similar to many parts of the world, there’s a large gap between the competitive compensation that employees in Brazil value most in terms of benefits and incentives (70 percent), and what executives say their companies actually offer (35 percent).
Employees Need More Technology Training
Demand for skills in advanced technologies, such as analytics and cloud-based software, is expected to grow market-wide. Fifty-eight percent of employees in Brazil say their company provides the right tools to help them grow and improve job performance. However, 53 percent expect to be proficient in analytics in the future, compared to just 22 percent who claim that level of skills today.
Companies Unprepared to Meet the New Face of Work
Brazilian responses about the changing make-up of workers were pretty much aligned with other regions in terms of the gap between hiring practices and the perceived need for HR policy shifts. Eighty-two percent of executives in Brazil say they are increasingly using contingent, intermittent, seasonal, or consultant employees. Yet only 38 percent believe that this workplace demographic shift requires changing HR policies.
Building a Stronger Future Vision
Perhaps the most troubling finding of this report is that executives in Brazil have the lowest responses to questions about their company’s future vision compared to the rest of the world. Just 43 percent say their company has an execution plan for achieving its vision of workforce management, and 33 percent say their company has a strong vision for the workforce it wants to build in three years. Only 30 percent say workforce issues drive strategy at the board level.
Despite these findings, the news is not all downbeat. The World Bank predicts Brazil will be one of the few Latin American countries to experience some growth this year. Some high-growth organizations are pursuing recruitment and employee engagement strategies designed to attract and retain like-minded top talent. “I think the Gen-Y style fits the type of business we are in. We need speed. We need high-tech people. We need people who like to enjoy life while they work, and we have a lot of celebrations here when we make records in sales or units, whatever it is. They also value the social responsibility of our business,” said Alessandra Ginante, VP of Human Resources at Avon Brazil.
In many ways, Brazil exemplifies the challenges Human Resource professionals face in meeting the demands of a radically changing workforce. Unlike most other parts of the world, Brazilian executives ranked both increasing numbers of consultants plus intermittent and seasonal workers in the top five labor market shifts. This makes for a dramatically different face of work. To stay competitive, companies will need to turn these new workers into top performers. The path to a long-term vision for a more successful future might just include ample training, valued incentives, and effective leadership.
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