The Nearshore is buzzing. M&A activity is rising as companies make decisive actions to push on with long-term strategies following the last 18 months. Meanwhile, cross-industry digital transformation is pressuring recruitment in Nearshore markets including Mexico, Colombia, Costa Rica, Argentina and Chile.
And while some businesses are fully engaging in the dog fight for digital talent, others are sharpening their tools of retention. Citing the concept of organizational capital, leading tech companies are structuring company culture and benefits to ensure valued talent aren’t tempted to look elsewhere.
“Every day an employee is with the company, their knowledge grows, increasing their value to the company and its clients,” Lucas Hendrich, Chief Technology Officer at BairesDev, a technology solutions company, told Nearshore Americas recently.
“This value often grows exponentially, which is also a loss when that employee cannot be retained. This makes retention – which I equate to employee happiness – an extremely high priority for technology organizations. Even the most talented new hires have a ramp-up period to arrive at peak productivity, which underscores the importance of a strong organizational culture that incorporates strategies for retention.”
The Value of Retention
Retention is a data point that can speak volumes of an organization. High turnover tends to raise questions about the care and promise employees see within a company. The technology and software development industry had the highest turnover rate of all industries according to a 2018 LinkedIn study. If workers were paid well, enjoyed the environment and saw opportunities to develop themselves, why would so many leave?
But beyond the general negative impression high turnover creates, the act of frequent recruitment can generate cost centers within a company structure without adding value. Recruitment processes can take months and if a company has hired the help of a specialist recruiter – the fees of which are 22% of the employee’s annual salary, according to recruitment firm Top Echelon – can become nothing but cost if the employee leaves a couple of months down the line. Retention, then, is clearly an area for the boardroom to focus on.
DJ Edgerton, CEO and founder of Colombia-based digital services company Zemoga, claims that building a strong company culture and empowering his employees have been the drivers behind Zemoga’s success.
Over a decade ago, Zemoga began to allow employees to work from home for part of the week rather than the physical office spaces in Bogotá, Cali, Barranquila and Medellin, as a reward for 100% of the workforce turning in their timesheets on time. Edgerton credits this early adoption with the company’s success over the pandemic, in which the company grew by 180 people.
“There was zero velocity lost, and it proved that agile remote work functioned. Many of our clients who were on the fence about Nearshore saw that offices in places like Bangalore couldn’t adapt quickly enough. To bring in remote working was one of the best decisions we ever made,” said Edgerton.
Recently the company flew 370 staff to fly to the US to be vaccinated after Colombia’s slow start to its vaccination rollout. Other companies have made similar efforts or are paying employees to get vaccinated
“We’re a people before profit company,” said Edgerton. “This decision makes sense. The more the company cares about its employees the more the employees care about the company and profit is generated,” he argued.
“Focusing on retention illustrates greater commitment from both sides, and removes the risk that new staff pose if they fall short of expectations,” added Edgerton. “Investing in the employees who really ‘work’ inside the organization bears greater value and loyalty.”
A Cohesive Company Culture
At BairesDev, retention is built into the fabric of the company, says Hendrich. Process and working practices are structured in such a way as to offer employees the optimum working conditions for them. Programmers like to program, those with families don’t want to waste time in long commutes, and everyone likes to work from home. The company’s 2,500 employees work from home throughout Latin America and the US.
“In knowledge-based industries, remote working leads to greater productivity and focus, greater quality of life, less environmental impact and enhanced security. It’s much easier to secure the end point than it is the physical space at an office,” Hendrich said.
Despite the remote setup, involvement within the company promoted and the idea of working within the community helps to create a cohesive workforce.
“All of our developers have a life beyond the projects they’re working in at the company. We’re big on knowledge sharing and cross-pollination so we do a lot of lunch and learn activities. This also helps everyone understand what their peers are doing in the company,” he said.
“Retention of staff reflects how a company operates, not its mission statement of how it aspires to operate” — Lucas Hendrich
Emerging interests like corporate responsibility activities are also gaining influence in employees’ opinions of their employer. Thought leadership is another area of interest growth. “We do our best to elevate our employees and actively encourage them in their pursuits. We tell them to use the company as a platform because we have the tools in a way individuals might not,” said Hendrich.
There’s no magic bullet for retention, but walking the walk and helping employees progress in their professional development goes a long way to ensure employees will remain at a company where they feel valued.
“A company’s culture reflects what it does, not what it says it does. Retention of staff reflects how a company operates, not its mission statement of how it aspires to operate,” he said.