I thoroughly enjoyed my conversation the other day with Gerardo Guerrel, Partner at Guerrel Arosemena Training and Consulting based out of Panama City, Panama. In addition to being an incredibly gracious individual, Gerardo offered up an insight-filled exploration of the trials in hiring and retention during the pandemic as it raged in Panama. Sourced from his multi-decade career in recruiting, talent retention, human resources and corporate training, in the service of local and multinational companies, NGOs and government entities, Gerardo’s observations and insights are readily translatable to any job market in turmoil.
What follows is an abridged version of my conversation with Gerardo from earlier this year.
Tell me a little bit about your background in Human Resources.
Well, I had about twenty-two years working in HR, recruitment, organizational development, contracting, hiring performance evaluation, about the whole cycle in human resources. Now I work with training and other topics besides human resources, for example, emotional intelligence, team-building and social abilities. I’ve worked at four different companies, in different areas, mining, technology, pharmacy. I worked for a non-governmental organization for about five years, as well as the government for about four years. Now I’m working as a consultant in HR and training.
How did COVID change things in Panama?
Well, COVID-19 changed everything. The thing is, in my case, in Panama, a lot of companies closed after the quarantine, because they couldn’t survive. The economic situation was so bad, and you had so many people looking for a new job. After that, the labor secretary in Panama needed to ensure the situation. They changed some laws to help companies try to keep their employees and keep proper labor relations.
After that, companies were trying to come back step by step. A common example would be a company that went into the pandemic with sixty employees. When they came back to work, they might only retain twenty, and the other forty are out in the market looking for work. But for those positions they retained, they are looking for people with greater abilities and qualifications. And these people are expecting higher salaries. It became difficult to find people for them. It was like making Christmas wishes looking at profiles, this one would have this qualification and that one would have that one, but you weren’t finding a superhero who had it all.
The other challenge is, we had a lot of candidates. Emails coming in from all over, LinkedIn, other platforms, looking for jobs. Before the pandemic, the unemployment rate in Panama was I think less than 12%. Now some people say it’s closer to 40%.
So there is a reduced number of opportunities, and then a deluge of candidates who are not completely qualified for those positions. How are you seeing companies deal with that challenge?
I think it depends on the situation of the company. If we’re talking about the bigger multinational companies, they tried to keep more people or even all of their people, companies like Proctor and Gamble for example. But now they have maybe 50% coming in everyday and working in the company proper and another say 40% working from home. If you’re talking about the second segment of companies, mid-sized companies, they found it more difficult. Some of them were looking for outsourcing tools, for example hiring someone to do HR or payroll, to avoid having to keep four or five people on staff with a salary in a payroll department.
Then there were some companies, I think good companies, not necessarily bad companies, that had some not so good, not so ethical practices. We have a lot of people coming in from Venezuela, from Colombia, from Nicaragua, and companies will hire them without paying Social Security, taxes, things like that. And then paying them a lot less than they would pay a Panamanian to work the same job, the same work. This was happening pre-COVID as well but now it’s more complicated because we have a lot of people from other countries living here looking for work. The competition is very hard.
Another way companies are dealing with the situation is they are consolidating departments. So in a situation where you might have two departments dealing with related issues, let’s say ten people in each department, now you have one department with let’s say twelve people total.
As a headhunter, we know the company is looking for the best people. Usually you’ll send three people to the client when you are hired. You’ll send them the best three people and they choose between these three. Now, companies are asking us to send them “the best, the best person,” if they need to pay more, then fine, because sometimes they’ve combined two or more roles into one and the profile they are looking for is so specific.
Another thing companies are doing is, normally people work from say Monday to Saturday, eight hours per day, that would be normal. But now it’s more common to say, I will hire you to work Monday to Thursday. There isn’t any law that says you cannot and there isn’t any law that says you can, as long as you pay according to the law, it’s fine.
“...but what they don’t understand is when you hire people, fire people, you spend a lot money with HR, training, induction, outsourcing hiring, etc.”
What are companies doing to take care of the folks that they are hiring, so they don’t lose them?
Besides salary, I think they’re investing more in training their people. In Panama, I think in 2012, the World Bank had a study that showed not a lot of companies were investing properly in training. It’s interesting and it’s sad because to keep the best people and provide the best service, you need to train the people, of course that’s important. And I think we are learning this, especially in HR, and in older, family owned companies as well.
In Panama, about 30% of companies are multi-generational, family owned companies. And the old people, like my grandpa’s age, they say, don’t worry, if you don’t want to work by my rules, there’re a lot of people waiting for a job. Sometimes that’s possible, but what they don’t understand is when you hire people, fire people, you spend a lot money with HR, training, induction, outsourcing hiring, etc. I think now, these companies are changing. And also because it’s not the grandpa, it's the grandchild in charge of the company. They studied properly, probably at a university outside of the country. They invest more in training.
Also they focus more on good relations with employees. For some people, you have a “toxic boss,” you don’t want to go to work, you wake up and you want to stay in bed, because it’s a bad environment. I think especially in family and mid-sized companies, they are worried about the labor culture in the organization, and training. And now more, because if you get a good manager and an employee that is good, you need to keep it because right now you have to keep the best in this difficult economic situation. I think that’s a good thing to come out of this pandemic situation.
“I think we are in this moment where people are learning how to make it a benefit and not a problem because it is not going away, it is the future of work for many things.”
How has the move to going remote played into all of this?
The first step was for the government to approve the law about working remotely, because without the regulation, it is quite difficult. After that, some companies were fine because they already had the infrastructure and processes set up. The big multinational companies, like Dell for example, were already used to having some remote employees. For the mid-sized and small companies, in Panama, we are not used to this. The regulation exists now, it provides guidance, fine. But how to deal with issues like, trust in the employee. Do you need to see your employees on a webcam all day to make sure they’re working? I need you to send me a picture or whatever, things like that. I think we are in this moment where people are learning how to make it a benefit and not a problem because it is not going away, it is the future of work for many things.
Another thing that is a good thing, if you have people working in the home, you don’t need to rent an office. And sometimes people are more productive working from home.
Now there is another situation, with the labor regulations for this. A union in Panama is complaining that their people are working more hours than eight, and they received payment for eight hours. You send me an email after six, do I need to respond to you? The client is X, the meeting is tomorrow at nine. The employee says after six I’m in my free time, I’m home with my family, it is not mandatory that I check the email.
Right now they are kind of blending, the balance between work hours and free time. And we are learning, both sides are learning, union workers and employers. We know there are benefits but it is new.
“…even when the law is clear, the key is how you explain it to your employees so that everyone understands how it would work in practice.”
And the ones who are finding benefits, what are they doing well?
Training. For example, two months ago, I gave a training to all the engineers in a technical company. We presented the ins-and-out on the law for remote work. Then we discussed how to resolve conflicts. Because even when the law is clear, the key is how you explain it to your employees so that everyone understands how it would work in practice. This kind of training is how you develop confidence and trust between managers and employees.
Companies have also allowed employees to work from home some of the time. So that, you can come into work on let’s say Monday, Wednesday, and Friday, and work from home Tuesday, Thursday and Saturday. This might sound like a romantic statement, but it’s important to keep your people happy. If managers are interested in performance and productivity, they have to keep their employees happy. It is more difficult for some managers, if they are not used to doing things this way, like we mentioned earlier.
On the other hand, employees working from home have the challenge of balancing remote work with home life. This is especially difficult for women, who are often expected to be more involved in the household when they are home. Sometimes, you see a comic in the newspaper of a mother working on her laptop, cooking dinner, feeding the baby, and talking to another child, all at the same time. It’s a joke but it’s true. So employees might be more productive and happy working from home, but they do have to work on that balance.
Are there any signs of a Great Resignation?
I don’t have the statistics on it, but I’m not sure that is happening as much in Panama because of the economic situation. Most people are hanging onto their jobs because there are a lot of people around with no job at all. I think similar to other countries, when you feel that the job is too stressful, it’s making you feel bad, feel sick, you need to be asking yourself, ok, I need the money, but I need mental health as well.
Maybe that’s happening more for people at the middle level, like unit managers, supervisors, or young people. That’s the story about this generation, the millennials, that’s happening around the world. In my case, my parents’ case, the dream was to begin in one company and retire at that company, finance your life, pay for your children’s education, that’s another generation. The young people don’t have this stay characteristic, if they don’t like something, they are looking for another situation. This was happening before the pandemic, but I’m not sure if it is happening as much now, with unemployment at 40%, I think people are holding onto their jobs.
Thank you to Gerardo for taking the time to chat with us from Panama!
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