Human resources heads from Novartis, Intcomex discuss driving engagement, loyalty
Hiring and retaining the best talent is only a piece of the puzzle for human resources directors in Latin America. More important is showing executives how having vibrant human resources functions that generate loyalty among employees that could be spread out across a region can directly benefit a business’ bottom line.
“People are the only assets a company has to win,” said Carlos Benitez, vice president of human resources for Intcomex at WorldCity’s HR Connections on May 11. The Miami-based technology distributor with “1,600 employees spread throughout 13 countries [with] $1 billion” in revenues.
Benitez was brought on to build out the company’s human resources department from scratch. As the company continued to grow rapidly, its needs for greater sophistication in HR expanded. The success of the company, Benitez said, had been built upon the environment of friends and family, and a community of entrepreneurs.
To explain the benefit of human resources “you do it with numbers.” The company tied bonuses to the profitability of each subsidiary, and Benitez went on a road show to explain the new goals to employees and managers throughout Latin America. In order to keep the company on its growth course, and satisfy its public debt holders, it began culling top management in its subsidiaries across the region.
“At the beginning of 2011 in the first five months of the year we let go of five of the 13 general managers, one per month,” Benitez said. Of those five, he added, two were shareholders in the company and three were founding managers. Even though the company continued growing, it saw one-third of its rank-and-file staff laeve. Half of them did so by resigning.
Despite the fact that there was a strong core of friends and family “there wasn’t a lot of generations behind it.” Intcomex began developing a more cohesive HR strategy that included a balanced scorecard and working overcome the challenge of “how do you convince your mangers that their job is to develop the people to get results, not them, then you can scale your HR practice.”
How to develop people, however, remains a key point of research, debate and testing. At the core of developing and retaining good people, human resource directors for multinationals working in Latin America agreed, is engagement. That goes beyond just satisfaction, and includes an element of loyalty.
That mentality also rings true at Novartis, said Marcelo Fumasoni, who heads human resources for Latin America and Canada for the pharmaceutical giant.
“One of the key components of engagement is career development,” he said. In Novartis “you are accountable to retain and develop these [high potential] people, if some of those people leave then other people get nervous,” he said. “Then you are accountable for the competitiveness of your strategy, you’re accountable to use your budget and to get the most out of it.”
Often companies will do surveys to get an idea of how satisfied or engaged employees are, but they’re no exact science.
“When you do surveys in Latin America, especially for the first time, people don’t always say exactly what they think or what they feel,” said Sara Baker, HR director for Western Union in Latin America on sabbatical pursuing a master’s degree. “They have concerns about the anonymity of the survey and so they tend to say what they think the company or management wants to hear.”
On top of that “the first year [of a survey] is a nice effort to undertake but it means nothing,” said Ken Finneran, chief people officer of the Americas for Hellmann Worldwide Logistics, “What people are waiting for is to see what you do with it.”
Beyond opportunities for advancement and communication within the company, there’s also an element of “emotional salary.”
“What kind of programs like work-life balance, what kind of initiatives or projects are there where people feel more comfortable and understood,” said Carlos Forlenza, managing director for European Institute of Social Capital. “This is what the younger generations are looking for, what kind and quality of emotional salary you have to offer.”
HR Connections is one of five event series organized by WorldCity to bring together executives on international business topics. The HR series is sponsored by the University of Miami School of Business Administration, Diversified Search, and the European Institute of Social Capital. The next meeting is set for July 20.