In 2013, get ready to pay more to hire multinational executives in key Latin American nations.
The surge in pay for top managers in Brazil should level off, but salaries likely will keep rising for top managers in Colombia and Peru and for manufacturing chiefs in Mexico.
Those were among the trends outlined by two managing directors of retained executive search firm Diversified Search, Lorena Keough and Marjorie Kean, and discussed by human-resources managers at WorldCity’s first HR Connections meeting for 2013 held Jan. 11.
Worldwide, the recruiters are seeing increased demand for multinational executives beyond the biggest emerging markets: Brazil, Russia, India, China and Turkey. More companies now are looking to expand in smaller but fast-growing nations, such as Colombia and Peru in Latin America. Talent in those smaller markets can be limited, so salaries for top executives there generally are rising. In some cases, companies are plucking more experienced managers from Latin America for posts in other emerging regions, even in Africa, said Keough and Kean.
To fill the talent gap, more Europeans are heading to emerging markets, propelled by Europe’s slowdown. Spaniards are taking positions across Spanish-speaking Latin America and Portuguese engineers in Portuguese-speaking Brazil, sometimes in infrastructure projects, the duo said.
“Many [Europeans] are agreeing to come as national employees, not expatriates, “said Keough. “They’re willing to accept local packages, without all the bells and whistles, because it’s a lot better than sitting in Europe with no job.”
Executives also are moving within their emerging regions. Problems in select countries are pushing managers from those nations to more stable lands nearby. Venezuelans are heading to Colombia and Panama, Argentines to Chile and Egyptians to United Arab Emirates, to name some shifts, they said.
For human-resources managers, it’s no easy task to identify the right people to fill top positions across borders and to help executives and their families adapt to a new culture in a new land. Some companies do better than others in dedicating time and staff to help with the difficult transition.
Medical device maker Medtronic is “very purposeful” in helping managers adjust in a new country, even assigning a dedicated coach in some cases, said Sabine van der Meulen, Medtronic’s director of human resources for Latin American operations. “You need a strong acculturation piece” for relocations to work, said van der Meulen.
Other companies attempt to reduce the problems of relocations by building teams across nations. Information technology distributor Intcomex, for example, often keep specialists in their home countries and builds their regional expertise from that base through trips and meetings. Top executives at times brings the far-flung team together for strategy sessions by videoconference.
“Sometimes you need to be near, but not always,” said Intcomex HR director Carlos Benitez.
Even with Latin America, compensation trends now differ widely by country and industry, participants said.
Brazil: South America’s largest market has become hugely expensive for multinational talent, with packages for technology executives sometimes four times the cost of other countries, said Emre Memecan, the top human-resources manager for Microsoft’s Latin America division.
Salaries have become so high for Brazilian talent that “it was cheaper for me to bring someone from New York City to Brazil” than hire locally, said Melissa Ribeiro, human resources director for Latin America and U.S. Hispanic markets for Internet heavyweight Yahoo!.
The surge in Brazil’s executive pay is moderating, however, as the country’s economic growth slows, said Keough.
Colombia: With violence tamed and the economy growing at a steady clip, Colombia is increasingly being used as a regional hub for northern Latin America for multinationals, said Intcomext’s Benitez. That’s pushed up salaries for top executives, especially in the capital city of Bogota.
Mexico: Some manufacturing of goods destined for the Americas is heading back from Asia to Mexico. That’s because China’s wages are rising and higher fuel prices make long trips lots more expensive. As more multinationals set up Mexican factories, including auto plants, costs for top manufacturing chiefs are rising, participants said.
Rising demand for top talent means an expanding role for HR executives serving Latin America, Kean told the group.
Multinationals are building bigger HR teams for their Latin American divisions, and they’re seeking more specialists in areas such as compensation, talent acquisition and professional development. They’re also looking for HR managers familiar with mergers and acquisitions, who can handle HR due diligence before a merger or acquisition deal and then, can help integrate staffs after the deal closes, said Kean.
HR Connections is one of six 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, retained executive search firm Diversified and the European Institute of Social Capital.
The next HR Connections is set for March 8.