Partner and Head of Latin America Juan Dominguez spoke to Gerardo Hernandez at Spanish-language publication El Economista about what he sees in store for talent in the region in 2023.
Juan said executive wages have been stable during the past year. "Supply and demand in the labor market will drive a reduction in guaranteed (or base) salaries towards other forms of compensation.”
Companies in Latin America looking for talent are no longer confining their searches to their specific geography, according to Juan. Companies are looking for executives globally; so there are more opportunities for candidates–but at the same time, more competition.
Below is a transcription of the article, which originally appeared in Spanish.
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War for talent will intensify in 2023, but with lower salary offers
Massive cuts in industries such as technology will generate a greater supply of talent and, although competition for some profiles will remain strong, this phenomenon is projected to push down salary offers in the short term.
"Supply and demand in the labor market will drive a reduction in wages," warns Juan Domínguez, partner and director of True Search for Latin America.
According to the specialist, this year companies will continue in a war for the best talent, especially in the field of digital profiles, but given a massive reduction in jobs in some sectors, it is likely that the availability of labor will be higher and that has an impact on the salary offer.
But this will not be the only challenge for recruiting this year. “The second challenge is that there will be people who will transition from traditional companies to startups and vice versa. It is very difficult for people who come from the startup world to adapt to the rigid models of traditional companies”, explains the executive.
In 2022, a hiring boom was observed in some sectors, but the other side of the coin is that the reorganization of various profiles was registered in the technology sector. “In 2023 I think that the salary levels that had been growing unsustainably will stabilize, it seems that the bubble has burst a bit, but the macroeconomic situation is also causing that bubble to shrink and the players who did well in the season remain. homework," says Alejandro Paz, Robert Walters country manager in Mexico.
The specialist underlines that throughout this year the technology industry, particularly the world of startups, could face a great movement of talent, which will generate a greater availability of profiles in the market, mainly for management positions.
However, despite this, it is likely that not all talent can be absorbed by the market. Given this context, Juan Domínguez believes that independent consulting services could have a rebound as a refuge in the face of the difficulty of reintegrating into a formal position.
In addition, an additional element is added to the equation of recruitment challenges: the war for talent and the competition itself among professionals will maintain its growth on a global scale. “The biggest and probably scary trend is that we are no longer competing with people from the same country. When looking for a Human Capital director, you will not only look for a Mexican or an Argentine, the talent pool becomes more regional”, he indicates.
Regardless of this scenario, considers Alejandro Paz, what will not change this year is the list of skills that companies will prioritize in candidates for executive positions. "They are going to continue looking for agility in decision-making, flexibility in strategies and they are going to look at profiles with a business partner dynamic."
From the perspective of Juan Domínguez, the search for executive profiles is linked to digital thinking and that will not be the exception this year. While managerial talent may be more likely to relocate to another company between downsizing, it will be important for them to develop digital skills.
Regardless of this scenario, considers Alejandro Paz, what will not change this year is the list of skills that companies will prioritize in candidates for executive positions. "They are going to continue looking for agility in decision-making, flexibility in strategies and they are going to look at profiles with a business partner dynamic."
Lack of adequate talent… and training
According to the Monitoring of Business Perceptions of Vestiga Consultores, 27% of business leaders in Mexico consider that they have the right talent at the managerial level and 31% think that they "more or less" have it.
To this we must add that 62% of executives believe that there is a poor availability to select and recruit the right profiles for managerial positions.
For the partner and director of True Search for Latin America, this shortage of talent is also linked to a debt with the internal development of collaborators. “Large companies need to have digital skills in their people, and there is a debt in the development of digital skills in the people who are such companies. There is no development of a truly digital mindset and that is leading to a breakdown of the succession, where new actors enter traditional companies and the succession charths are left to oblivion.
But the shortage of suitable talent is also linked to the academic lag as a result of the pandemic, says Alejandro Paz. “Over time, there is a gap in professionals who are missing precisely because of this situation. In addition, the companies that come with sustained growth are companies that implemented very strong training strategies”, points out the country manager of Robert Walters Mexico.