INTERVIEW
With "América Economía"
http://www.americaeconomia.com
América
Economía was
founded in 1986 in the middle of
the so-called "lost decade of
Latin America." Its founders
decided to bet on the economic and
social development of the region,
creating the first pan-Latin
American business magazine. Today,
the results of this bet are in
sight: AméricaEconomía is one of
the most respected business
publications of the region
América Economía reporter Juan Pablo Dalmasso asked ART's Managing
Director to comment on
salaries being offered to
Latin American Managers
Atlantic
Research Technologies, L.L.C.
(ART), https://www.atlanticresearch.com,
is a global executive search firm, recruiting in the
industrial, high tech and
service sectors, for senior- and
middle-management positions in
general management, sales and
marketing, finance, supply
chain, manufacturing, IT, and
human resources.
América
Economía: Do
you consider that a world talent
competition is affecting Latin
American labor markets?
ART: "In
many industries, we are seeing a
boom in the hiring of senior and
middle managers in Latin America.
In Mexico and Brazil, in general,
this trend has existed for many
years, with only some pauses in
certain market sectors or regions.
Economic stabilization in
Argentina, FTA's signed by Chile,
and the recognition of a good
infrastructure in Costa Rica, have
helped those countries recently
attract more foreign investment,
and a consequent recruitment of
world class managers, who are
earning higher salaries.
"What
is interesting about the current
global competition for world class
talent is that not only are
foreign companies entering Latin
America and competing to employ
the best managers, but also
excellent Latin American managers
are relocating to North America,
Europe, Asia, the Middle East or
Africa, and obtaining senior
management positions in those
regions and receiving high
compensation levels. In addition,
people from these other regions
are coming to Latin America in
order to obtain greater
opportunities and salaries. People
from all countries and regions are
going back and forth between
countries or continents, and,
instead of a classical "brain
drain" in Latin America, with
Latin American managers leaving
forever for more developed
economies, we are seeing Latin
American managers who had left the
region now returning to start
their own companies or to lead
local business units of foreign
companies."
América
Economía: Is that producing
wage inflation?
ART: "I
would not say that there is 'wage
inflation.' 'Wage inflation'
suggests that salaries are out of
control, perhaps due to larger
economic forces beyond anyone's
control. In reality, no company is
forced to offer a high salary, and
no person is forced to ask for a
high salary. Why have many
managerial salaries risen? The
local laws of supply and demand
dictate what salaries might be
asked for and what salaries might
be offered. No company pays a high
salary unless the candidate has
high qualifications that bring
immediate value to them. Some
people might say that salaries
have increased greatly and
suddenly, but I would say that if
there happen to be many
opportunities for that person, and
if companies are willing to offer
those rates, it is because at that
time and place, companies are not
seeing enough people with such
qualifications and they see great
value in that person for their
organization. I think that in free
markets, salaries tend to be at
the correct levels for that
market.
"Our
company recruits in over 100
countries, on six continents, so
we see similar trends all over the
world. What seems to be happening
is that global companies are
creating certain types of
management positions that require
similar qualifications from
country to country, and the
salaries tend to be similar. So a
General Manager in China at a
major company is probably earning
a salary that is similar to what a
General Manager is earning in
Toluca, Mexico or in São Paulo,
Brazil or in Atlanta, USA, or in
Grenoble, France. A Latin America
Regional Managing Director at a
global automotive products firm is
probably earning a salary that is
very similar to a similar Managing
Director in North America, Europe,
or Asia. These kinds of salaries
exist not just for foreign
companies, but also for many
leading Latin American firms
expanding to Europe, North America
or Asia. They need top people and
many are paying the salaries that
are required to find the right
people for their business goals.
"The
best way to have a chance at
earning 'world class salaries' is
to develop the 'world class
skills' that are considered most
desired in one's field. In Latin
America, one always hears 'learn
English,' and I agree that good
English is an investment that
could provide a better path of
opportunities. But also, I would
add that a Spanish speaker should
try to learn good Portuguese -
especially through work or study
in Brazil - and a Brazilian should
learn good Spanish. A truly
trilingual Latin American manager
has a much stronger chance of
securing a Latin America Regional
Director or Vice President
position at the best companies.
People who learn German, French,
Japanese, Korean or Chinese also
could have enhanced career
opportunities in their own
countries or worldwide. A good MBA
also could provide a qualification
that companies might consider as
evidence of 'world class'
training. Best of all, is to have
made great achievements at one's
companies. In my experience,
global companies are most
interested in people who bring
evidence of success at good
companies.
"Much
of today's wage growth in Latin
America is directly related to
years of hard work, sacrifice,
dutiful study, and good work
successes by Latin Americans who
eventually entered the managerial
ranks. Higher compensation is not
a matter of luck as much as the
result of years of good
preparation."
América
Economía: In which
industries have you been seeing
salaries rising?
ART: "We
have been seeing the strongest
growth in the consumer products,
energy, and automotive markets,
but also in various service
sectors. We believe that in many
manufacturing sectors, there have
been falling salaries or salaries
not rising due to jobs moving out
of Latin America or due to local
instability.
América
Economía: Do
you perceive a challenge for
local or smaller
companies?
ART: "The
current challenges of
globalization affect every
company, every city, every
country, every industry, and every
person. Some companies will not be
able to retain their best
employees, because these managers
might decide to work for larger
multinational firms that could
afford higher salaries. The only
advice that I could offer smaller
local companies is to try to find
new ways of looking at their
companies, their products, and the
way that they do business. This is
occurring in the United States,
Canada, and Western Europe. Some
companies in these 'rich
countries' will not survive
because their management does 21st
Century business the same way that
they did business in the 20th
Century or even in the 19th
Century. Nothing is guaranteed or
safe for anyone in any country.
Latin American businesses have
many of the same challenges that
are faced in other regions. But
there is hope. Some companies see
the value of hiring 'world class
managers' and paying them 'world
class salaries' and often good
results follow. We are currently
working with a Mexican firm that
is seeking a Sales Director in
Spain. They have some of the best
trained managers, well paid, and
they are seeking this kind of
person in Spain to lead their
business in Europe. A few
management salaries at competitive
levels sometimes can repay the
investment many times over in
increased competitiveness in
global business.
"The
main waste in Latin American
business is not in employee
salaries, but in the way that
business tends to be done. A few
good managers can transform local
companies into great global
companies - tomorrow's Latin
America based multinationals - and
create jobs for all categories of
Latin American workers. The
greatest hope for positive change
is that this new generation of
Latin American managers might help
transform the culture of Latin
American business management from
a privileged club of comfortable
'hidalgos' or authoritarian
command-and-control managers into
a results-oriented,
unbureaucratic, managerial class
that is capable of encouraging and
nurturing their workers. These are
the managers who will achieve the
greatest results in any company,
in any country, and such managers
should have their compensation be
directly related to their results,
not to their genealogical, class,
or political associations.
"Latin
American business has never had a
problem paying very high salaries
to its top executives - many of
whom live luxurious lives to a far
greater extent than do many of
their counterparts in even wealthy
countries. So the corporate money
is often there. It is a matter of
how to allocate it, to whom, and
for what purpose. Latin America's
greatest challenge will be to
demand of its business leaders,
results, solid achievements, and
good business ethics. If those
goals are accomplished, then Latin
American businesses could finally
fully enjoy the fruits of being in
an easily accessible regional
market of over 500 million people,
as well as being great companies
participating globally. This is
not an issue of parceling smaller
and smaller pieces of a fixed
gross national product, so I
profoundly disagree with those who
are
not interested in raising
people's long term standards of
living by creating "a larger pie."
"Latin
America is a region with
tremendous growth opportunities
for everyone. It just needs
business people to take their
education and experience as a
great opportunity to improve their
companies, the lives of their
staff, and their nations. With
this kind of sincere patriotic
devotion, good compensation will
come to those individuals, and
also, we hope, an eventual end of
the cynical cycle of corruption
and underdevelopment or stagnation
that has plagued Latin America for
too long."
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