Companies in Latin America are looking to employee benefit programs to increase employee productivity and attract and retain talent in a highly competitive business environment, according to a new study released.
In the study, employers in Brazil, Chile and Mexico gave insights into how they inspired employee loyalty. And increased talent retention and productivity. According to the study, a majority of employers in all three countries – 99% in Mexico, 87% in Chile and 85% in Brazil – said that offering benefits is tied to their efforts to increase employee productivity. This is an increasingly important outcome as companies in Latin America want to stay competitive with other emerging markets, an ongoing challenge that cuts across the entire region.
Mindful of a tight labor market in Latin America, especially for skilled workers, managers in Mexico (98%), Brazil (90%), and Chile (88%) agreed that “increasing employee job satisfaction” is a top employer objective for offering benefits. This marked a 7% increase for both Brazil and Mexico since being surveyed in the 2011, highlighting the growing need to attract and retain talent. And employees agree that benefits are critical for job satisfaction – among employees with benefits, 80% of Chileans, 79% of Mexicans and 57% of Brazilians said they were satisfied with their job. This drops an average of 15% among employees in both Chile and Mexico who do not receive employer-paid benefits.
The study also found that there is a strong correlation between employees who are provided benefits and those employees who feel “a strong sense of loyalty to my employer.” Eighty percent of Chilean employees agreed with this statement, as did 72% of Brazilian and 70% of Mexican employees. The study also found that loyalty drops an average of 20% among employees in both Chile and Mexico who do not receive employer-paid benefits.
Potential Headwinds: Rising Costs and Expectations
As employers across Latin America look to leverage employee benefits as a way to improve performance and attract and retain talent, companies are facing potentially strong headwinds as they seek to balance the rising cost of benefits and the growing expectations of their employees. A large majority of companies surveyed said that controlling the cost of health and welfare benefits is a top concern (94% in Mexico, 85% in Chile and 82% in Brazil).
At the same time, employees in Brazil, Chile and Mexico are grappling with growing financial concerns and are looking to their employers for help. Despite millions of Latin Americans achieving a middle class standard of living¹, four in ten Chilean and Mexican workers, and three in ten Brazilian workers, say they live “paycheck to paycheck.”
Employees in these three countries also reported that having enough money to cover expenses during a sudden income loss (due to job loss, disability or illness); having enough money to pay for their children’s education or for good child care; having adequate healthcare; job security; and outliving one’s money in retirement were all common concerns.
It does appear that both companies and employees may find common ground through voluntary benefits programs (where the employee pays all or part of the benefit), the study found. More than half of companies surveyed in Brazil, Chile and Mexico plan to add protection, health and financial products as voluntary benefits in the next two years.
Employees in these countries are increasingly receptive to paying for all, or part, of certain benefits to improve their lives. Half of employees surveyed expressed an interest in a wider variety of voluntary benefits options. Nearly half of Brazilian workers are interested in adding to their retirement savings with a supplemental pension plan, while life, accidental death and disability are of more interest to Chileans and Mexicans.
Employees in all three countries also rate very highly the option to pay for benefits via payroll deduction, which could lead to more discipline around achieving savings goals.
From : MetLife