Strong Culture Needed to Attract Qualified Talent
The job market is changing, qualified employees are growing scarce and it is no longer enough for employers to simply offer their staff the bare minimum, Michelle Ferrari, CEO of Great Place to Work Mexico told Mexico Talent Forum on Wednesday at the Sheraton Maria Isabel hotel in Mexico City.
In her keynote presentation, Ferrari explained that organizations are now experiencing constant change. “Today, companies are experiencing real issues in talent recruitment, especially given the increased importance of IoT and industry 4.0,” she said. “We are making very interesting changes in the way we operate but it also very difficult to adapt staff to those changes.”
Ferrari said it is ever more important to seek staff that are aligned to the Industry 4.0 revolution and the increasing focus on automation. “We must understand the impact of Industry 4.0 in talent displacement. Today, talent profiles are not ready to adapt to this revolution,” she warned. “Artificial intelligence threatens to eliminate the human factor and as leaders at the forefront of this revolution, we need to understand how human talent fits in.”
According to Ferrari, a Great Place to Work certification has tangible benefits for organizations. “Being rated as a Great Place to Work is directly related to a company’s return on investment,” she said, displaying a graph trending Great Place to Work companies on the FTSE Russel index, which showed a 1,034 percent increase in ROI.
Being a Great Place to Work also creates greater loyalty and reduces staff turnover, Ferrari added. Among companies allied with the program, 84 percent of employees are aligned with their company’s strategy, 81 percent trust the company and 85 percent are committed to the company. She explained that these factors impact outcomes in a tangible way. “People who feel loyal to their organizations are 13 times more likely to make an extra effort to get the job done, 14 times more likely to recommend their friends work in the company and 18 times more likely to adapt well to change.”
As the job market grows more competitive, employers must think about the kind of culture they want to create to attract more and better talent. While these cultures can differ among companies, Ferrari said there are three main pillars: fairness and egalitarianism, strong training programs and a profound sense of purpose.
While all are important, Ferrari said the most important pillar was fairness and a sense of justice. To illustrate her point, Ferrari played a short video that showed a Norwegian social experiment in which two children, one boy and one girl, tasked with sorting and separating pink and blue balls. The children worked together to complete the task. In the end, the reward for the girl was fewer candies than the boy. Both children were confused by this, since they both did the same job. The video concluded with the question: “Unequal pay is unacceptable in the eyes of children. Why should we accept this as adults?”
Ferrari closed by saying that for companies, new generations are now increasingly demanding clearly drawn lines and expectations. “They want to see that 2 + 2 = 4,” she explained. To attract the best talent, she stressed the fundamental need to offer gender equity and fairness. “We cannot talk about self-driving technology while there are still issues related to gender inequality,” she said.
Value Creation Practices for a New Workforce
The workforce in today’s companies is composed of different professional profiles and generations, creating the need to find the best practices to manage differences and diversity, panelists at Mexico Talent Forum 2018 told the audience on Wednesday at the Hotel Sheraton Maria Isabel in Mexico City.
Jaime Cardoso, Marketing Director at Kronos Latin America and moderator of the panel “Value Creation Practices for a New Workforce,” said that HR departments face the challenge of recruiting the best talent while at the same time creating an environment that meets the various needs of a diverse workforce. Added Paola Carranco, Founder Director and Consultant at Talent Lab: “As companies, we need to create a bigger sense of community and communicate to our employees what their purpose is, why they are valuable and why they do what they do. This is the key to being more productive and being a better performer.”
The way employees and the company communicate is vital to improving engagement and the performance of both. At Grupo Posadas, there are 17,000 collaborators with different generational needs, expectations, benefits and perspectives, said Diana Salinas, Director of Human Capital at the group. “Leaders and HR departments must create custom solutions that integrate everyone and which motivate them to be part of the company,” she said. According to Miriam Dávila, Learning Manager for Latin America at WeWork, “the way a company involves their employees and leaders guide their teams is key to performance because it impacts directly on engagement, cultural organization and commitment to the company.
Cardoso said generational changes not only result in differences regarding the needs of the workforce but also in access to technology and the skills each individual has to perform a job. As a result, companies face the challenge of recruiting better and according to their needs and expectations. Uber is among the companies facing these challenges. “At Uber, we need people who know how to learn and develop with our company because it is key to our performance to have professionals who join us in all our processes and values,” said Jonathan Reyes, Head of Recruitment for Latin America at Uber. WeWork’s Dávila concurred, adding that it was also up to a company’s management to show the way. “CEOs and leaders must act as ambassadors of the brand to guide employees through changes and to involve them in the purpose of the company in an authentic way,” she said.
Another challenge in Mexico is the contradictory perception between working times and productivity, said Cardoso. Companies must work to redefine how they measure productivity beyond the hours of work because generations like millennials need less time to be more productive. United Nations Mexico implements a system of performance evaluation for their employees that allows them to measure their own productivity according to the bigger goal. “We create an environment of respect for our employees, wherein they are aware of the flexibility to be with us but also the commitment to the UN,” Gustavo Linares, Director General of Human Resources at UN Development Program, said.
Overall, companies face the challenge of introducing a better work-life balance for their employees and to create more engagement, said Cardoso. “We have to understand that flexibility means different things for different people, so we have to be aware of the need of our employees to provide them with the environment and the motivation to work for us,” added Reyes. Carranco echoed those comments and pointed to the particularities of Mexico City. In a place like Mexico City, she said, “we need to be aware that people need flexibility because of the conditions in which we live here, such as traffic. We need to train our leaders to manage this flexibility to ensure the best performance for all. If we want things to change, we need to do things differently and transform our business and how we manage.”
Outdated Education Plans Must Change to Meet Talent Needs
Mexico might be among the countries that generate the most engineering graduates with over 100,000 per year but it still struggles to narrow the gap between what the industry really needs and what the talent market can offer. At Mexico Talent Forum 2018 at Sheraton Maria Isabel, CDMX, leaders from the academic sector took the opportunity to express how the relationship between the industry and academia can improve to generate the talent the country needs.
One of the most recent examples regarding industry and academia collaboration is the development of the aerospace sector in Queretaro. Bombardier arrived to the state acting as a magnet for further investment from other suppliers, forcing academic institutions to develop the necessary talent to support aerospace operations. “We worked together with the industry, collaborating with top-level executives all the way to plant operators,” said Norma Muñóz, Academic Secretary at UNAQ. “However, the industry is changing all the time and candidates must be capable of adapting to these changes.”
The fourth industrial revolution has been a driver for many companies to embrace new technology trends such as additive manufacturing, advanced robotics and virtual reality and according to Juan Manuel Romero, Innovation and Technology Coordinator at UNAM, the government and academia must work together to help companies embrace these trends. “It has never been more important for the industry, academia and the government to work together and create the right conditions for talent development,” he said during the panel.
Integrating these trends into the education system can be challenging in itself, although, said Katia Villafuerte, Executive Coach and Professor at ITESM, “our education model is outdated. It is based solely on favoring theoretical knowledge.” The model must be updated according to the fourth industrial revolution where all academic areas can coexist and it must incorporate new ways of passing knowledge to more digitally oriented students. “If a teacher lecturing students about a certain topic is no longer effective, we must find new ways to transmit knowledge,” added Zinia Padilla, Director of Culture and Change Management at ITESM.
Padilla and Villafuerte highlighted some of ITESM’s strategies for changing education methods in favor of the industry’s needs. Padilla mentioned the Center for Teacher Development and Education Innovation as one of the main efforts to improve teaching methods, leaning on communication and information technologies. Villafuerte shone a light on the Innovation Week and the Innovation Semester organized by ITESM, where students participate in and solve real industry problems with the help of their teachers.
Understanding what the market is asking for is a key element to consider when developing new academic programs, according to Mariana Monge, COO of Generation Mexico, and it is what can help companies determine the return on investment from any new education methods. “Students must be aware of the job opportunities and salaries they might reach through a certain training program or certification. Meanwhile, companies must understand how easy it will be to retain people after training them and the benefits that these models will bring to the company,” she said. “Education is a continuous process, from university and job training to employment.”
Academic institutions are gradually changing their curricula to adapt to what the industry needs but a strong participation from the industry in student development is key for this effort to succeed. “If the industry is not invested in training students, models like the dual-education system cannot work,” said Muñoz. Marta Román, Academic Director of Collective Academy and moderator of the panel, asked the panelists what they would ask from the industry to improve their participation in the development of new academic programs. Monge identified four main topics. “We need companies to help us identify what their needs are, to map competences among their employees so we can better identify candidates, share that data with us and finally, openly embrace new education and training models.”
Forging the Silk Road to Mexico
Although many people associate Chinese companies in Mexico with behemoths like Huawei and Lenovo, Sergio Masse, Partner and COO of China Campus Network, told the audience at Mexico Talent Forum at the Sheraton Maria Isabel hotel in Mexico City on Wednesday that there is an increasing number of Chinese companies entering the country and if Mexico wants to see even more investment, it needs to have a ready pool of talent.
“More and more Chinese companies are arriving and over time they will have much more relevance,” Masse said. “If we have a pool of talent ready for these companies, this will detonate investment and will mean Chinese companies are much more likely to choose Mexico over other countries.”
He uses the example of China National Offshore Oil Corporation (CNOOC), which won two of the 10 deepwater Perdido blocks on offer during Round 1.4 of the Mexican bidding rounds. The offers made by the NOC greatly exceeded the minimum requirements, meaning the company is expected to bring a great deal of investment to the country.
China Campus Network is a global initiative set up to promote Chinese business abroad. Masse explained that the country wants to move away from its traditional image of poor quality and low-cost manufacturing. “There is a concerted effort to move from Made in China to Made by China,” he said. “In terms of manufacturing costs, Boston Consulting Group actually found that it is 19 percent cheaper to manufacture in Mexico compared to China.”
In 2013, Beijing announced a plan to create a commercial corridor between China and Europe, but over time these plans became more ambitious. The plan now encompasses three “wings:” Western Europe and Africa to the West and Latin American countries to the East, with Eastern Europe, Southeast Asia and Australasia comprising the main axis. “Any organization or country that supports the initiative is part of the initiative,” explained Masse. The cost of the entire project is expected to be between US$4-8 trillion. “To put that into perspective, the GDP of Germany in 2016 was 3.5 trillion,” he said.
Of course, a project of this magnitude demands skilled human capital, and Masse listed the two main challenges as access to local information and recruitment of local talent. “China knows it is of the utmost importance to prepare and attract talent locally,” he said. With more than 16,000 Chinese companies working abroad, it was necessary to create incentives for talent attraction.
He admitted those incentives differed by country, but as a general rule, in developing countries, Chinese companies adopted the strategy of paying higher-than-average salaries. “This has been found to generate much more loyalty among employees and studies have found that employees are much more willing to endure a little more stress for the higher salaries,” he said. As a result, Chinese companies now employ 1.5 million local workers around the world.
How to Manage Talent in the “Gig” Economy
The “gig” economy is not a new trend but contemporary components are transforming the way talent is recruited and trained and how that talent engages with companies, panelists at Mexico Talent Forum 2018 told the audience on Wednesday at the Hotel Sheraton Maria Isabel in Mexico City.
“The workforce is increasingly more mobile and technology is allowing people to do any type of job from anywhere in the world. Companies must work with the advantages and disadvantages that come with the new talent environment if they are to be part of this cultural transformation in the way business is done,” said Alberto Mondelli, Director of Global Services and Solutions for Latin America at Willis Towers Watson.
“The gig economy will become the new normal in the industry. One of every three workers currently participates in this scheme,” said Gabriel Aparicio, Country Manager of Kelly Services Mexico.
In this digital era, one part of the job is being transformed and the other has disappeared with automatization technologies, which has pushed people to seek different ways to participate in the labor market, said Jaime Morfín, Partner at CD Consultores. Roberto Miramontes, Director of Operations at Easy Mexico, highlighted the differences at his company to illustrate the new market. At Easy Taxi, he said, “there is no more face-to-face customer attention because we provide contact centers where everything is done on our digital platform.”
The gig economy is also shifting the way talent management works. “Gig talent must not be thought of as a temporary component of the economy because it is here to stay. It is creating professionals who have an advanced education, outstanding competences and expertise to fill the gaps in different sectors of the market,” said Gabriel Aparicio, Country Manager of Kelly Services Mexico. “Companies are using gig talent to fill their talent gaps, grow their global reach and differentiate their products and services.”
An example is the Mexican energy sector, which acutely feels the challenge of acquiring talent in each segment of oil and energy production. “Outsourcing and modernization trends have both benefits and obstacles, where one of the biggest challenges of the future is going to be retaining talent,” said Guido Van Der Zwet, General Manager America of IPS Powerful People.
For this reason, companies need to generate engagement beyond their formal employees and work more closely with collaborators, associates and those people who work as gig talent to maximize performance, says Morfín. Added Aparicio: “This evolution is changing who holds the power in the market; it is shifting from the employer to the employee. As a result, it is necessary for companies to have good marketing because gig talent chooses the companies and not the other way around.”
One problem lies “in the attraction and engagement of people in a gig economy when the company is non-gig oriented because employers must offer the necessary incentives to appeal to the talent and retain it,” said Mondelli. Also, companies must be “conscious about the impact that social media and other technological tools have when employees communicate their satisfaction or dissatisfaction, which ultimately can become a threat or an advantage depending on how companies deal with these platforms,” Miramontes noted.
Morfín added that HR departments must be key participants in the active process of recruitment in this gig economy and gig talent environment. Communication between departments is also vital. “The operational divisions of the companies must be in constant communication because there is going to be a need to include both formal talent and gig talent,” said Miramontes.
The question for the economy is not going to be whether or not the gig economy is permanent or not but rather, “how the rules are going to work in Mexico regarding this trend and how will they change the way business and talent work together in the market,” said Van Der Zwet.
Mondelli was more direct: “Mexico’s laws are not made for temp jobs,” he said.
Technology, a Challenge for Everyone
It is common knowledge that job applicants must remain up-to-date with the latest trends lest they become obsolete in the talent market. However, CEOs and HR managers must also be aware of these trends and how they might affect their hiring processes. Four C-level executives shared their vision on how companies should face this challenge during the last panel of Mexico Talent Forum 2018 at the Sheraton Maria Isabel hotel in Mexico City on Wednesday.
“Being aware of technology developments is crucial,” said Jan Frowijn, Director of Business Collaboration at Rosen Mexico and Central America. “If something is already a standard in the market, then you are probably too late to incorporate it in your operations.”
Technology is evolving exponentially and priorities must change accordingly. According to Javier García Iza, Director General of IOS Offices, companies used to view the internet as bad for productivity. Now, it is as vital as electricity. “Internet is now a key sales channels for many companies,” he said. “Years ago, there was a clear difference between technology and a company’s business,” added Joao Nunes, Executive Director of Michael Page. “Now, the line is completely blurred.”
Patricio Bichara, Co-founder and CEO of Collective Academy and moderator of the panel, said that Industry 4.0, the cloud, digitalization and many other emerging trends are impacting all industries equally. Furthermore, there is a gap between what Mexico can offer and the type of talent that the global industry demands. “There is very capable talent in the country but the quantity is not enough,” said Nunes. “Meanwhile, companies do not want to be the first to develop the right talent because of the fear of high turnover rates.”
Especially within the manufacturing sector, companies worry about what technology inclusion might mean for talent development. Frowjin said companies must change their vision: “Instead of focusing on the jobs that will disappear, we should analyze what skills will be needed for the jobs in the future. Knowledge is evolving every year and as CEOs, we must keep ahead of every trend and help our employees embrace new technologies.”
Machines might be increasingly important in decision-making processes thus putting the human factor at risk but for García, common sense and the human factor are something that to this day cannot be replaced. For this reason, he sees happiness and motivation for the employee as key factors that CEOs must keep as priorities for talent management. “Work culture is key to retaining talent within the company,” he said. “We have identified six key topics that can make a worker more motivated to be part of the company: Sense of contribution, recognition, responsibility, personal growth, challenges and sense of belonging.”
Within the company, however, CEOs also face the challenge of merging different experiences with new ideas. “Older generations must find an effective way of transmitting yearly experience, while young people must be able to share their knowledge regarding new technologies,” noted Frowjin. This exchange cannot be the sole responsibility of the CEO but of the entire company, according to García. “The CEO has the responsibility to give equal opportunities to every employee in the company,” he says. “But, workers must decide how much they want to grow in the corporation.”
Ultimately it is up to the CEO to provide the environment for growth but up to the employee to rise to the challenge, said Nunes. “The challenge for companies is to find ways to make people perform as well as the Top 10 percent of employees in the organization,” he said. “Not everyone can be considered talent but CEOs can create the conditions for all workers to improve.”
The Meeting of the Artificial and Human Minds
Artificial Intelligence (AI) is the future, but recruiters cannot simply depend on AI to hire competent staff, said Oscar Harada, Senior Relationship Manager for LinkedIn Latin America, at Mexico Talent Forum at the Sheraton Maria Isabel hotel in Mexico City on Wednesday.
“AI is fantastic for narrowing down applications,” he said. “It can already be seen creeping into our everyday lives with the introduction of Amazon’s pioneering checkout-free grocery store that opened its doors in Seattle at the beginning of this year.”
Although he said that not all work functions will be replaceable by automation, there are five that have been identified by McKinsey & Co as the most susceptible: manufacturing, retail trade, hospitality, transportation and agriculture. Those five industries make up 46 percent of activities that are susceptible to automation.
LinkedIn carried out a global survey that asked thousands of recruiters where AI is most helpful to them. Among the answers, 58 percent said sourcing candidates, 56 percent screening candidates, 55 percent nurturing candidates and 42 percent scheduling candidates. “Yet these numbers dropped in terms of interpersonal functions, such as engaging candidates (24 percent) and interviewing candidates (only 6 percent).
Although many of those interviewed agreed that AI is helpful in saving time and money, delivering the best candidate matches and removing human bias, there seemed to be a “gut feeling” element missing.
The major problem of machines is that eventually they reach a plateau, he said. “AI cannot replace building relationships with candidates, find a candidate’s potential beyond credentials, judge the ‘cultural add’ or the cultural fit offered by candidates, gauge candidates’ interpersonal skills or convince candidates to accept offers.”
Harada’s main question was: how can we mix data with that gut feeling so we can find the right candidate for the job?
He explained that LinkedIn is rolling out a revolutionary global program called the Economic Graph to map important factors for recruiters, such as where supply and demand is higher, the competitors to which a recruiter is losing talent and the main skills gaps within the company. The program analyzes 530 million members, 18 million companies, 11 million jobs, 50,000 skills and 29,000 schools. “We want to connect talent and the need for it on a massive level,” said Harada.
He added that the company is incorporating Andrew Ng’s revolutionary theory of deep learning, which is an algorithm that surpasses AI’s learning plateau by constantly feeding more information into the system. “Today we have all the tools to be able to define all the answers,” he said. “All we need is a little time to be able to develop our algorithms further.”
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