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Latin America’s Workforce Is Adapting To A New Normal–And It’s Here to Stay

By Courtney McColgan

In November 2020, my HR software company surveyed more than 375 companies with operations in Latin America about the future of work in the region, and less than 5 percent said they plan to go back to the office within the next 12 months. Surprisingly, this figure comes from more than just tech companies: finance, marketing, manufacturing, education and energy sectors were also well-represented in the survey.

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Across all industries, managers are rapidly adopting new technologies and are open to further digitalization in the near future. So what does this mean for the future of the Latin American workforce? This region will likely undergo a more accelerated timeline toward digital transformation, innovation and technology adoption. However, this implementation will be lopsided.

While a majority of companies surveyed are prepared to adopt technologies driven by artificial intelligence next year, a UNDP report in July 2020 noted that just one-fifth of Latin American workers are able to adopt remote work. Nonetheless, the democratization of these technologies is making it possible for the smallest mom and pop shops all the way up to the mega manufacturers to move their operations online, with the added pressure of the pandemic increasing the speed of adoption.

Latin America’s HR managers across dozens of industries are preparing to stick out the pandemic and are putting plans in place for the next crisis. Here’s what to expect from the post-pandemic Latin American workforce.

Balancing and leveraging digital tools for a hybrid workweek

Business in Latin America is traditionally done face to face. In fact, in some countries it is considered rude to try to strike a partnership or deal with anyone until you have had lunch or coffee at least once or twice. Given this custom, it is unsurprising that just 14 percent of HR executives in the region said they felt prepared for the current crisis.

Courtney McColgan, founder and CEO of Runa HR.

Nonetheless, as COVID-19 swept the region in March, companies and their employees have quickly found new ways to communicate and come to agreements. Of the companies surveyed, 100 percent noted that they have implemented new software since the start of the pandemic. Two-thirds of this group is using video-calling software to manage remote communication as some workers return to the office and others remain home.

Beyond Zoom, nearly half of these businesses have adopted software to monitor employees’ remote work. With 55 percent of companies in the region adopting a hybrid return to the office—meaning alternate work days for specific employees to reduce contact—the future of work in Latin America is looking much more flexible and less dependent on human contact than before the pandemic.

Going beyond the legal requirements for benefits

The majority of businesses in Latin America have acknowledged the threats that COVID-19 poses to their employees’ physical and mental health. In response, nearly two-thirds of HR departments shared that they have increased benefits to workers, including funding home office furnishings, increasing health benefits, or offering additional skills building opportunities. Delivery startup Rappi and education platform Platzi have even pioneered a permanent “work from anywhere” policy, similar to Twitter’s policy, among large tech companies in the region.

While these changes were already on the horizon, they are particularly groundbreaking in Latin America, where employers face strict legal requirements for employee benefits and rarely step beyond those boundaries. However, as the employment landscape becomes simultaneously more competitive and more precarious for workers, companies across all sectors are finding new ways to hold on to their employees and ensure their safety.

The majority of the new benefits brought on by COVID-19 this past year were developed privately, without the incentive of policy change. And although some tech companies were already offering more progressive employee benefits,  such as stock options, flexible hours, etc., the pandemic is pushing larger, more traditional businesses to follow suit.

After testing the pros and cons of a hybrid or remote workforce, many companies in Latin America will likely never return to the office as strictly as before. These new benefits will hopefully build a base for a happier, wealthier and more stable workforce with a significantly increased standard of living in the region after the pandemic has ended.

Cutting-edge technology is here to stay

Of the companies participating in our survey, 45 percent plan to implement AI within their operations in the next year; 35 percent responded similarly about robotics. From recruiting to algorithms for payroll loans, companies across the region are working on automating tasks to shift their workforce into more creative, intellectual labor. Despite the common concern that automation replaces humans, 92 percent of companies are betting on technology as a way to leverage human capacities, rather than a method to reduce their workforce.

A November 2020 survey by Runa HR of over 375 companies with operations in Latin America about the future of work in the region.

However, the integration of these technologies is still controversial, frustrating and lopsided across industries. It is unclear, for example, how artificial intelligence or robotic automation might be used to support the working class, which has been struck particularly hard both economically and physically by the pandemic. Even among the 375 companies surveyed, fewer than half considered themselves truly ready for the digital era. Smaller businesses might be even less prepared.

The digital transition may be happening more rapidly than ever, but companies operating in Latin America still have an uphill battle ahead to shift the priorities and habits of their workforce away from face-to-face operations. The pandemic has pushed managers and HR executives to face the reality of changing how employees communicate, receive incentives and benefits, and become trained to work in a rapidly evolving environment. On a positive note, many companies are leaning into these changes — rather than pulling back — and investing in new technologies.

It remains to be seen how these changes will evolve as workers are able to return to the office en masse. However, with these systems now in place — and employers preparing intensely for future crises — it is likely that Latin America’s workforce has now become permanently more innovative, digitally savvy, and resilient to the next challenge on the horizon.

Courtney McColgan is founder and CEO of Mexico-based Runa HR, a human resources software solution designed for small to medium-sized companies in Latin America.

Illustration: Li-Anne Dias.

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