Mexico Talent Forum 2015 provided an excellent opportunity for more than 100 HR professionals interested in discussing the main trends in the human talent market. Guests filled the Bugambilias Hall of Mexico City’s Sheraton Maria Isabel to share the greatest challenges they are facing in attracting and retaining human talent and to present their successful initiatives in doing so. Human capital is a highly relevant topic for every company and many different strategies are required to address it. Participants at the Mexico Talent Forum 2015 shared the responsibility of providing Mexico with the talent it needs. The event provided an excellent networking opportunity for participants to discover and develop new solutions to attract human capital.
Human Talent: Supply and Demand Outlook
Mexico Talent Forum 2015 began with a conference by Ignacio Cano, Vice President of Human Capital at Grupo ICA. Cano started his conference presenting some figures on Mexico’s position as an oil producer and the challenges this presents after the recent deceleration of PEMEX and CFE operations. He stated that talent is indeed one of the challenges, and is among the main concerns for HR leaders who are concerned about the availability of talent in the near future to satisfy the industry needs. Cano mentioned a study performed by Grupo ICA and FIDER, which determined that, of all engineering degrees, two disciplines stand out to recruitment managers: industrial engineering and systems engineering. “Within this study, we projected the amount of graduates that each degree will provide,” Cano comments, “and the graduate number is worrying since there will be an oversupply of engineers in some areas, while others will not be able to satisfy the industry needs in the next five or six years.” Cano claims that this places them in a complicated situation, meaning that the infrastructure and energy sector should generate new, alternative solutions to develop talent, such as adapting engineers from other fields or taking measures to attract foreign talent.
Cano then proceeded to talk about Grupo ICA’s specific strategies and solutions. Being a construction company, its influence depends directly on economic and politic cycles, so it is important to understand projections and talent demand. For Grupo ICA, talent is treated as a corporative property. Key talent is discussed by top management, but one challenge is the complexity of the career path. Learning is fundamental and Grupo ICA’s main focus is to develop individual capabilities that help to build upon the expertise of the organization. “We concentrate on four main pillars when developing our talent: project management, contract management, financial management, and mergers and acquisitions”.
For Grupo ICA, human capital is the most important asset. Cano recommended that, “The human resources department should be strategic, but also intimately involved in operations. In our case, our model is adequate for our sector, but when considering strategy, its development must adhere to our talent agenda.” There are important challenges to overcome on the horizon, one of which is indeed talent scarcity. “There is going to be a talent war, we will see wage inflation in the medium term, and we will have to be extremely strategic to ensure the availability of the talent we require,” he concluded.
Matching Education and Industry Needs
The first panel of the day, Matching Education and Industry Needs, was moderated by Carlos Ortiz Gómez, Director General for Research, Technological Development, and Human Resources at the Ministry of Energy (SENER). Ortiz introduced the panel by stating the importance of communication across all sectors to address industry needs in the matter of qualified human capital. He claimed that there are several ways to address this topic. As he stated, “Ensuring that students have the appropriate talents is not a matter of investment, but a matter of ensuring the proper academic environment.” He encouraged panelists to introduce themselves and to provide their expert opinion on this topic.
Panelist Mario Zavala, Professor at the Faculty of Accounting and Administration of ANAM, gave a brief recount of the history of this problem, which he claims has existed for a long time. According to Zavala, since the period known as “Milagro Mexicano”, universities were considered as the final step for personal development. However, this line of thought failed to address labor demand and isolated universities from the job market. Zavala claims that the industry needs solutions “just in time”, but that universities teach certain subjects “just in case”. Ortiz agreed and stated that “Students attend universities expecting to acquire the necessary training, and universities must address that need.”
José Manuel Bas, Vice President of Human Resources for Mexico and Latin America at Laureate International Universities, spoke on the challenges universities are facing to train future professionals. In his opinion, planning is the main component of this problem, as it is necessary to proactively estimate the future needs of the industry. Bas claims that “If a student chooses a career based on the current market, by the time he or she finishes college, that career may be obsolete.”
Next, Patrick Schaefer, Executive Director of the Hunt Institute for Global Competitiveness at the University of Texas El Paso Campus, compared his experiences at El Paso Texas to the situation in Mexican cities. He spoke of the need for engineers to generate leadership and communication skills and how to support them in doing so. Schaefer states that he “sees a lot of promise in Mexico and in relations between the country and the US”.
Schaefer was followed by Edgar Ángeles, Academic Director of Earth Sciences at Universidad Olmeca, who presented the contrasting point of view regarding academia. He states that one of the main problems faced by universities in Mexico is that the education system changes every six years, after each presidential election. The current education system is based on capabilities, and students are no longer failed for bad grades, which generates professionals who are unable to accept failure. Another problem is elementary education teachers who are not committed to education, mainly in the southeast of the country. This leads to university students who are entirely unprepared for college-level work and are unable to solve problems on their own. Ángeles also praised the importance of “informal” education, referring to communicative skills, ethics, and values. He states that universities are now implementing an “eco-education” model, which addresses both formal education and social skills.
Ortiz reinforced the need for curriculum planning, taking into account possible industry trends and analyzing the most necessary capabilities. After speaking on the role of the government and academia, he asked the panelists to comment on the role of the industry in addressing the university curriculum. Zavala answered by stating that the industry is essential to determine the educational needs of future employees, as these players set the requirements. Zavala addressed Ángeles on teaching students to address the uncertainty of the market and stated that the industry “must consider the generation of talent as a permanent measure instead of in short bursts”. Ángeles agreed and added that “The most important matter is to reinforce education on basic science, as this disciplines hones a graduate’s problem solving ability.”
The moderator thanked participants and asked for audience questions. One audience member stated that “talent is addressing industry needs”, and claimed that school curriculums must be generated by an industry panel, as nowadays the universities seem to generate degree courses individually without considering industry needs. In response, Ángeles explained the process universities follow to generate new study programs that are generated by a “Comite de Carrera”, an autonomous body that determines the curricula, formed by 50% researchers and 50% industry representatives. Schaefer also reinforced the need to create networks among universities and the industry. As an example, he referred to a program called “Con Redes,” a public-private initiative to communicate these needs. He also claims that “We must teach our students to navigate in the darkness, since we may be industry experts but we cannot predict the market, so we must focus on strengthening our students’ abilities to face uncertainty.”
Talent Identification & Recruitment Strategies
Moderator Gerardo Kanahuati, Managing Director of Hays Mexico, opened the debate by asking the panelists what they, as HR leaders, are doing to identify the necessary talent and to attract talented professionals into their companies by implementing best practices and challenges in the recruitment process.
Silvia Mendieta, Director of Human Resources Operations at Audi Mexico, said that the OEM’s primary approach to recruitment is to make HR staff understand the installed processes. However, the radical difference in Audi’s recruitment operations is to include recruitment staff that is well versed in engineering, since the company mainly recruits engineers.
Adrian Monter, Director of Human Resources at Grupo Mexico’s Instructive Division, stated that the main challenge for mining companies is the scarcity of specialized talent. A situation that has impacted Grupo Mexico’s operation is that training is provided in specific areas as new technology is acquired, but other companies doing the same create a niche segment for candidates. The company’s best practices include training in-house talent by recruiting graduates and giving them the opportunity for international experience, which will transform the employees into loyal assets. Montier believes that “The key element is to make Mexican talent stay in Mexican companies”.
Patricio Gil, CEO of Blackhawk de Mexico and Vice President of the American Foundry Society, mentioned that the company was founded in a time of turmoil due to a talent crisis. At the time, the average worker was 29 years old and there were only three specialized engineers. In order to turn the situation around, the company sought retired engineers and paired them with young talent. “This strategy delivered a 30% compound growth for the company,” he claims. Currently, Blackhawk includes three talent groups. The first includes those individuals with qualifications in metallurgy, the second is focused on people familiar with the automotive industry, and finally the administrative staff. Each segment has different strategies but all focus on developing local talent.
Kanahuati then asked the panelists to discuss the skills that are lacking in the current talent. Mendieta pointed out that there are two gaps: supply chain and technical development. They tackled the second issue by implementing the German model of dual education two years ago. The OEM expects to start its operations in Puebla in May 2016, having recruited the first generation of 87 graduates from mechatronics engineering. “We expect to generate 100 graduates per year through this program and we are betting on the development of local talent,” she stated.
Monter added that for ten years, Mexico did not produce enough engineers so now there are no optimal candidates to assume managerial positions. “Some leaders are close to retirement and they have not been able to pass on their knowledge,” he laments. “The succession plan we are developing now is a challenge because we need trained and experienced talent, and the generational gap limits the empowerment of younger talent. However, some of the more experienced people are now working as advisors to guide them through the process of greater responsibilities.”
For Blackhawk’s strategy the main issue was motivation, but they faced the problem not with competitive wages but by improving the employees’ quality of life. Therefore, the company implemented clear working hours and respected them, allowing employees to engage in other activities. Another fruitful tactic was restructure and optimize the company. “We removed supervision levels, simplified the KPIs, and shortened the meetings”. Blackhawk was subsequently named foundry of the year.
Kanahauati moved to another question, in an attempt to identify the most scarce jobs and talents. Mendieta pointed out that, for Audi, the main problem was the location of the plant since it is situated 100 km away from the main city. Moreover, the compensation package was equal to that offered by competitors, even though the brand is perceived as premium. “We had to think of innovative ideas to retain our talent,” she stated.
Gil mentioned that the main problem for the foundry is not the lack of qualified technicians or engineers, but their level of English. “It is a pity because there are several training programs in the US but our workers cannot participate because they do not speak the language,” he lamented. Gil also suggested that school programs should focus on teaching how to learn, instead of just teaching specific topics.
Finally, the moderator asked how the digital revolution and digital tools have changed the way recruitment works. Mendieta mentioned that HQ wanted to move toward a fully digital approach, but due to a need to adapt to the local environment, some computers were installed in the region to allow candidates to apply for the vacancies. For Grupo Mexico, tools such as LinkedIn are relevant but the most effective tool for talent acquisition is the image the company portrays.
Talent Development and Retention
After a coffee break, moderator William Gaber, Founding Partner at Atabay Consulting led an interactive panel on Talent Development and Retention. He introduced panelists Juan Ángel Vargas, Client Consulting Leader for Human Capital and Energy & Resources at Deloitte Consulting Group, and Jorge Ponce Stirk, Integrated Projects Human Resource Manager for Mexico and Central America at Schlumberger. To introduce the panel, Gaber illustrated the challenges recruiters face on a daily basis and the energy sector’s needs on the matter of human capital. He stated that recruiters must take into consideration the fact that the market is divided into upstream, midstream, and downstream, but they must also consider short, middle, and long term plans. Another topic to consider is geography, as several areas of the country have a surplus of professionals while others are facing a shortage.
Both Vargas and Ponce mentioned the problems that the energy sector is facing and their strategies to address them. Vargas explained that after the price decrease in oil barrels, PEMEX reduced its supply chain, generating a surplus of talent. This was unexpected since the sector was expecting a larger demand of talent after the Energy Reform. He now estimates that for the next two years, this surplus will continue, but at Deloitte they have identified areas that will require qualified talent in the mid-term. Furthermore, he predicts a large gap in highly qualified labor in the next ten years but this much needed talent is not being adequately developed. Ponce also remarked on the effect of the depreciation of oil prices on the energy sector causing a temporary surplus of labor, but he also mentioned his company’s strategies to negotiate this issue. His solution is to mobilize talented individuals into those geographic areas, both nationally and internationally, which most require attention. This method is highly beneficial as it provides talented individuals with many opportunities and job security. These talented employees should be prioritized over new recruits as they possess a comprehensive knowledge of the industry and its clients. He commented on his experiences both in Mexico and abroad, as he states “Companies have to expose their professionals to different cultures and work environments in order to prepare them for change”. On the other hand, according to Vargas, mobility seems be decreasing in the energy sector as employees seem to be moving to the automotive industry. “The energy industry is facing infrastructure problems that are slowing down mobility programs.”
Next, Gaber shifted the discussion onto retaining high value individuals. Vargas mentioned a recent study by Deloitte, in which five different retention strategies were determined. The first is to make these individuals aware of their value to the company. The second is to help their subordinates to recognize the value of their leaders. The third is to generate a positive work environment and the fourth is to make high value employees aware of the growth opportunities they are acquiring through training. Finally, the most important step is to generate trust in leadership. Ponce remarked that growth within an industry and retaining valuable individuals is a process that begins at the recruitment stage. He states that, from the outset, there must be transparency in the recruitment processes regarding the benefits to which the future employee may be entitled and possible growth. Identification of the correct individuals is essential. “The first six months to one year are essential to determine whether the individual is correct for the position.” Ponce also states that companies should perform a self-assessment to determine whether they are truly competitive, as he says “it is necessary to analyze the market to determine whether we are competitive, otherwise it will not be possible to retain talent.”
Gaber mentioned an initiative to attract, develop, and retain talent, named “We Are All HR”. This initiative aims to involve all upper management and directors in the retention of talent. Ponce reiterated the importance of involving managers in each step, as “when a person leaves a company they are generally not abandoning the company but their immediate management”. Thus, he highlighted the importance of training management and providing them all the necessary tools to ensure this. Vargas mentioned another strategy, which is to create a sense of belonging within all staff members, and to encourage management to continuously look for talent and to try to retain it. Ponce also commented on the importance of identifying and flagging high value individuals. Finally, he continued that a possible motivation for newer and older employees is to manage a company through meritocracy, meaning that all promotions should be attained by merit.
Outsourcing & HR Services
The panel on outsourcing & HR services began with specific questions for the panelists. Claudia Sánchez García, Vice President of Human Resources at PAE, asked Fernando Garrido, Managing Director of TMF Group to explain Mexico’s position within the use of Business Process Outsourcing (BPO). The managing director of TMF Group stated that outsourcing services has been positive, particularly with Mexico’s opening to international trade. “India, China, and Malaysia are some of the largest countries using this scheme, and in Latin America, Mexico is the biggest in the development of BPO, with a growth rate of this segment almost 12% annually.” The reason for this is that the main users of this kind of service are foreign companies arriving in Mexico. The benefit of using BPO is that it allows companies to focus directly in the development of their business. However, the main challenge is to completely fulfil client needs and comply with all the regulatory requirements.
Subsequently, moderator Sanchez directly addressed Bruno Blackmore, Partner and Co-founder of BlackTrust in order to explain the relationship between business, digitalization, and human capital. Blackmore mentioned there exist three main gaps in the evolution of the digital world. Firstly, he explained that the dot com companies are valued at almost US$60 billion, Facebook has a significant value of US$30 billion, and a third component in digitalization is the “Uberization” of the world. Yet, the correct name for our circumstance is shared-economies. After explaining this, Blackmore said that the relationship between the three concepts could be attributed to one word: Generation. This means that millennials are influencing the work place while other generations are adapting to the millennial way of functioning. He stated that, “Some companies, in Latin American countries in particular, are not adapting to change. Companies now do not want to have an HR department as we know it. We need to focus on this generation.”
Lewis Adams, Principal of Industry Practice at Heidrick & Struggles added that the digital generation has also changed with a new phenomenon called reverse mentoring, where young employees are assigned to senior staff to train them in the use of the available digital tools. The HR industry is now creating alliances and partnership relationships, rather than just transactions. He then said that, with the automotive boom in Mexico and the Energy Reform, the face of HR services in Mexico will irrevocably change, and 2016 will bring interesting challenges. According to Adams, “The main competing sector will be Tier 1 and 2, because they will need to commence operations in short timescales with the best talent possible.”
Discussing risks and trends in human capital services and outsourcing, Blackmore insisted that the HR culture is intensifying, and that evaluations, scorecards, and bonuses are no longer relevant. “Millennials should not spend more than three years in any job.” Also, the revealed that companies need to change the way in which productivity is measured. “We believe that productivity can be measured by the time we are seated in an office. Today we are helping companies to change this mindset and allow employees to work from home, which can reduce indirect costs by 80% and reduce inefficiency at the office.”
Finally, the moderator asked about the HR role in today’s corporate offices. Lewis was quick to answer, and stated that the main challenges faced by CEOs are people management and development. “HR was traditionally a support area, but now it has to play a more strategic role in the development of the company by fostering human capital.”
Understanding the Legal Environment
“The law is involved in every area,” began Alfonso Pasapera Mora, Partner at Gastélum Abogados, “While every company has many different divisions, all of them important, a legal department is essential for every company.” Pasapera gave an overview on the legal environment companies are facing nowadays. He commenced with a brief history on the international agreements regarding human talent and their importance in shaping the current Mexican regulatory environment on the matter of relations between employers and employees. He mentioned an international agreement signed in 1979 to address discrimination, among other factors. Pasapera discussed strategies for companies to avoid discrimination and penalties established by law. “While it is difficult to sanction,” he said, “nowadays it is possible to bring legal charges against either coworkers or employers for discrimination.” In order to avoid lawsuits, companies must create clear policies and explain them properly. Recently, there has been a particular focus on moral reparation which has led to several compensation lawsuits. To avoid this, Pasapera encouraged attendees to pay close attention to both local and international law.
Pasapera also spoke about human resources law. One of the topics upon which he touched was the difference between an employee and a service provider. However, he warned attendees that the distinction could become blurry, which could be problematic. Pasapera mentioned examples of companies that had tried to exploit this distinction, or that were unaware of it, and were taken to court. He stated that the key distinction between them is “subordination”, which refers to the relationship between the individual and employees. If a worker is not considered an employee by the company, but can prove his or her status in court, there is subordination between employee and employer, and the petitioner has a strong case for a lawsuit.
On the matter of retaining employees, Pasapera lamented that there were no options for making an employee stay, even if the company had spent a large amount of money in training and has not received a return on this investment. He says that in those cases, the only thing that a company can do is include punitive clauses in their contracts, imposing a monetary penalty if the employee leaves before a determinate period. Another topic he highlighted is the need to include penalties in contracts for former employees who release confidential information and enforce infringement in a court of law. Pasadena claims that the most effective strategy to protect the company is to strengthen the relationship between employee and employer and generate loyalty and trust between both parties.
The Future of Women in the workplace
Lorena Cruz Sánchez, President of Instituto Nacional de las Mujeres (INMUJERES) began her conference by highlighting the importance of empowering women, both for their personal lives and for the entire Mexican economy. She delved into the inequalities women face in Mexico, starting from elementary school. According to the OECD, Mexican women graduate at an almost equal rate to men, but have fewer opportunities. There are also certain careers where gender seems segregated but this gap is shrinking. On the other hand, female participation in economic activity has increased by 4% in the past ten years, but this is not enough, especially in comparison to Chile, Colombia, and the US. In Mexico, there is a considerable opportunity for women to increase their participation in the economy.
Cruz mentioned that women often have to juggle a double workload, as they often work both inside and outside of the house. Wages are also dissimilar in comparison to their male peers, and in order to achieve equal pay it is necessary to increase women’s wages by 6%. Cruz mentioned that even though the pay is lower, women have to work longer hours. On average, women work 63 hour weeks, while men work 53. She proceeded to list further statistics detailing female inequity in the workplace, including the fact that 15% of working women over 15 years of age claim to have faced a complicated situation that arose as a result of their gender, 10% claim to have suffered discrimination, and 19% have suffered workplace or sexual harassment.
This situation has social and economic implications for the whole country. At a macroeconomic level, the country loses productivity. “Greater participation of women in the workplace can raise the GDP by 25%,” says Cruz. She believes that in order to do this, it is necessary to create appropriate positioning for women and improve their working conditions. Cruz also remarked on the importance of creating a safe work environment for women to facilitate their self-sufficiency. “In Mexico, 63 out of every 100 women have suffered from violence,” she mentioned, “and a woman who is not self-sufficient will probably be unable to break out of this circle.”
Cruz finished her speech by emphasizing the importance of involving the public sector in the dialogue, and remarked that the present presidential administration has promoted workplace equality. She said, “This is a matter in which everyone must be involved, as gender equality is a key element in the competitiveness of Mexico.”
Development of Human Capital and Talent Management
Alberto García Martínez, Undersecretary of Employment and Professional Training at the Government of Guanajuato, began the last conference of the day with the quote: “Good talent will always move freely. It cannot be contained.” García spoke of Guanajuato’s experience and potential as an industrial hub. This state is becoming the business platform of North America for a number of reasons, including its central position in Mexico. The center of Mexico can proudly state that it contains 80% of the Mexican market and 70% of international commerce. Guanajuato has a lot to offer local and international companies, as the state has 5.5 million inhabitants, excellent train connections, and a strong workforce. García mentioned that the state has created a development plan to guide them until 2035, which relies on the strengthening of traditional companies in the state.
García recounted the history of manufacture in the state and highlighted its fast growth and diversification. The state began by manufacturing mainly shoes but now it has branched into many other industries including food production, petrochemistry, agrochemistry, and automotive, among many others. From 2012, the state has invested in the construction of 12 industrial parks to host all foreign companies coming into the country, and these parks are expected to be completed by 2018. Now, the automotive industry is one of the main drivers of the state and companies in this sector are being encouraged to generate value chains and develop high value technologies in Mexico. García also remarked on the development of a new business culture in the state due to the arrival of Japanese and German industries, and highlighted the importance of generating strong alliances with both countries. For example, the state is collaborating with the German government to generate education models to train new professionals.
In order to strengthen human capital in the state, the government is implementing strategies to link universities and the industry, and updating curricula to reflect industry needs. He referred to the dual education model, which is being implemented in collaboration with Germany to transfer technology to Guanajuato. He also mentioned the “Capacitación sin Fronteras” program, which aims to educate well-rounded professionals by offering programs where students undertake six months of study in Mexico and six months abroad, with a recruitment guarantee on their return to Mexico. This program has produced encouraging results as several students have been trained for highly specialized positions, and so far 100% of students undergoing this program have been hired in Mexico.
García capitalized on the importance of “just in time” training, as foreign companies entering Mexico ted to feel like there is a lack of qualified professionals. The state of Guanajuato has promised to fill 14,000 local job vacancies through investment by next year, therefore the state needs to acquire a large number of qualified professionals in a very short time. “Just in time” training provides education focused on a specific company’s needs and it will be tailored for the companies coming into the state. Alongside universities, the state is recruiting college students in their final year for this project. This project will benefit individuals as it will improve their quality of life, and this will also benefit the state by reducing crime, improving social development, and reducing absenteeism. García believes that it is of the utmost importance to align the state’s education system to these needs, since more than 200 companies are coming to Guanajuato in the next few years, which will elevate the city to international standards.
Mexico Talent Forum 2015 provided an excellent platform to share innovative strategies on the attraction and retention of human talent. It also provided networking opportunities for participants to meet potential new clients and partners, and to develop strategic alliances among attendees. All in all, the event was a resounding success, allowing members from the industry, academia, and the government to connect and discuss the development of human talent in Mexico.
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