What are Venezuelan companies doing to attract and retain talent in an adverse environment?
By Egberto Fernandez, Venezuela Career Advisor

Private Venezuelan companies are going through tough times. From an economy based on respect for private property, an open attitude towards foreign capital and diversification, we are going towards a social and economic model called the “Socialism of the Twenty-first century.” In this model, the state controls private activities and dominates all the means of production of goods and services, aimed at socializing them and thus becoming the nation’s main employer and generator of almost 50 percent of the jobs. Laws, regulations, inspections, temporary and definitive shutdowns of companies and an integration policy with regional governments - to the detriment of local entrepreneurs - hamper the activities in the traditional sectors of manufacturing, agro-industrial, textiles and public services.

Being an entrepreneur in Venezuela and keeping the labor force motivated is a major challenge. Labor costs have become very expensive; as a result, many companies have disappeared in the past eight years and others have sprung up. Those which have remained have done so thanks to the creativity, ingenuity and willpower of their businessmen and managers.

On the other hand, the high cost of life, the scarce offer of quality products and services, the difficulties in obtaining housing, medical care costs and insurance, the situation of personal insecurity and the political environment make it difficult to maintain motivation in a labor force that has to compete in a global market. This situation is also fostering a brain and talent drain towards other countries. Under these circumstances, there is no room for poor practices.  The current strategic agenda of leading companies includes their personnel as their main asset. The importance of the human capital is a topic of discussion at congresses, workshops and seminars, not only at the local but also at the regional level. Corporations, consulting agencies, universities and professional associations are seeking ways to attract and retain talent.

This scenario has given rise to an opportunity for international consultants such as the Hay Group, Great Place to Work (GPTW) and Hewitt to conduct studies identifying the best talent-retaining practices in order to help to implement a culture that reinforces commitment.

A study on a group of corporations published in Gerente magazine (www.gerente.com) in March 2007 listed the best practices in the management of human resources that define these corporations as excellent work sites:

They offer effective leadership that creates clarity and trust.

Employees receive a firm and respectful treatment.

• Conditions are in place for employees to be successful in their roles.

• There are opportunities for growth and development.

• Quality products and services are developed.

The study also shed light on areas where attention must be placed:

• The highest levels of dissatisfaction are among the workers with two to 10 years in the company. These workers are unhappy with the work/life balance and their work loads which create high stress levels for them. They feel their salaries are not in line with their performance.

• Women are more critical and demanding regarding the work/life balance, cooperation and teamwork and they greatly value flexibility. The incorporation of a high percentage of women into the labor market is an element that must be taken into account.

• The higher the level of education, for example employees with fourth level studies, the higher the level of expectations from the company and its managers. The topics of the allocation of roles, functional autonomy, development and compensations, work load and work/life balance are highly criticized.

The management of human capital in Venezuela and the region has undergone noticeable changes in the past 10 years. Efforts have been observed towards improving the organizational climate and increasing performance and satisfaction, even in the midst of a complex environment.

• A high percentage of large companies have restructured their human resources functions using a more decentralized approach, changing the name to human management, talent management or human capital management, and outsourcing their administrative operations. The aim is to consolidate a more strategic, less bureaucratic role.

• Due to the surplus professionals, companies do not have to make much effort to recruit personnel. The candidates and the education centers are taking the initiative. Recruiting via the internet has also increased; Eighty percent of companies use this method.

• The selection process has been perfected and has become more demanding and rigorous. This process is costly; the companies are in search of the best candidate. The use of competence models has become generalized. Individual interviews continue to be the method most generally used, although some companies use other methods such as assessment centers.

• In spite of the high unemployment figures, finding competent candidates is not easy. Talented personnel are scarce and in high demand.

• As far as compensation is concerned, variable schemes adjusted to the businesses’ performance are being used.

• Training and development is in line with business requirements. Very few companies have structured career and succession plans. The training of managers in coaching and leadership skills is a strong trend. The use of the Internet in training is still in its early stages.

Talent retention is a difficult task that poses a tremendous challenge on human resources managers and corporate leaders. The consolidation of the socialist model does not bode well for major companies although small and medium-sized entrepreneurs may find niches of opportunity if they learn to handle themselves in an uncertain environment.

About Author
Egberto Fernandez is a human development specialist who has more than 20 years of experience with organizations and individuals. He combines his private career-coaching practice with other areas of human development, including facilitating group workshops in management, leadership, team building, and change management. For more information, e-mail Egberto at egberto.fernandez@cantv.net.