While most North American and European countries struggling are struggling with high unemployment rates Latin America has been bucking the trend. Averaging 6.5 percent, unemployment in 13 Latin American countries has fallen to near historic lows, contrasting sharply with rich nation’s rates and its own historic peak of 11 percent a decade ago. 35 million jobs were created over the past decade as the average length of education rose by three years, and 65 percent of women aged 25-65 had joined the workforce, and salaries have risen leading to the narrowing of income gaps. This good news trend for workers is expected to continue with the projected average growth for 2013 for Latin America to be around 4 %, which is above the overall estimated growth for developed economies.
“It’s quite remarkable that Latin America has been able to break with the tradition of high unemployment and informal employment to bring down overall unemployment rates to new historic lows.”
World Bank Regional Chief Economist Augusto de la Torre.
While all this is great news for the average worker it does present some challenges for businesses throughout the region. A recent Economist Intelligence Unit report sponsored by SAP stated that due to the regional economic boom small and medium-sized enterprises (SMEs) are facing major challenges of finding and retaining skilled workers. The report was based on a survey of 175 respondents from companies throughout Latin America. Respondents were clear that Latin American SMEs face significant challenges in recruiting, attracting, developing and retaining skilled workers. In order to compete, Latin American SMEs will need to address this problem quickly.
The main findings of the SAP sponsored survey include:
SMEs face internal organisational challenges as they try to embrace a culture of continuous learning. While 42% of respondents to our survey identified the need to change the organisational culture as the largest problem they face in the area of innovation, executives also underlined the need to encourage teams to work together (34%) and to transform ideas into marketable goods/services (39%).
SMEs lack an organised way of analysing strategy. When asked to describe the way their organisation analyses strategic issues, a majority (51%) of respondents said there was either no process (5%), claimed it was largely ad hoc (16%) or said it varied by business unit or from year to year (30%).
A lack of good workers remains an obstacle to success. When asked to characterise the market for qualified, high-potential employees, 63% of executives complained of either an extreme shortage (10%) or a limited supply (53%) of talented workers. When asked to identify the three largest workforce-related challenges facing their organisations, the biggest single response (30%) was the inability to attract qualified candidates.
Recruitment and retention continues to be a challenge. Three of the other four most common responses to the same question pointed to recruitment and staffing problems: a mismatch between employee skills and organisational priorities (27%), an inability to retain key employees (26%), and an inability to build a properly motivated workforce (22%).
Source: An Economist Intelligence Unit report sponsored by SAP