Retaining Human Talent and Promoting Productivity

Experienced businessmen and businesswomen will agree that a company is only as good as the collective effort of its employees. While it is important for any company to be profitable, it is equally as important to provide employees with the right working conditions to ensure optimum productivity. Sergio Torres Cross, Director General of Mercer Mexico, explains how his firm helps companies make the best use of their people. “Our definition of making the best use of any given employee does not imply focusing on utilitarian aspects, but rather finding ways of making the workers as productive as they can be by providing a work atmosphere that makes them happy to work in,” he shares. According to Torres Cross, the solution to attaining productivity is found somewhere between the employers and employees in terms of salaries, compensation, and benefits that are provided in the short and long term.

The consulting firm has been working with companies involved in the Mexican oil and gas industry for many years, and has helped clients find the right balance between different productivity factors by making use of global industry benchmarks. However, Torres Cross is aware that the dynamics of human resources in the country will change as a result of the Energy Reform. “PEMEX’s workforce will now be the target for new operators trying to find skilled staff because most, if not all, local specialized workers are currently working in PEMEX’s operations,” he states. The fact that these workers know how PEMEX operates will only make them more valuable for companies starting exploration and production activities. “The number of people required in the energy sector exceeds the amount of experienced people available today. As a result, PEMEX and other well-established companies need to take care of their people,” adds Torres Cross. He also highlights the need for local companies to understand their internal labor market if they want to retain their skilled employees. “The internal labor market refers to the overall state of the workforce of a company. Once companies understand which employees are capable of doing specific tasks, they can deploy their resources wherever they are needed the most,” he explains. “By understanding their own internal labor market, companies already working in Mexico can focus on moving their human talent upward, rather than hiring new people. In doing this, employees also feel that they are being prioritized, which in return can help these companies retain their skilled labor force.”

Another challenge that companies will be facing will be finding the right people for greenfield projects in Mexico. Since these projects entail starting from scratch, it is important to have the right technical and managerial teams that are capable of handling the challenges of such a project. This is why PEMEX’s current staff will likely be the target of new companies, particularly those looking to establish greenfield operations. “The strategy of incoming companies will be to decipher what they need to do in order to attract PEMEX’s employees as they begin operations in the country,” Torres Cross expects. An added layer of difficulty arises for PEMEX when taking into consideration that executive positions in the private sector are usually better paid than what PEMEX is able to offer. Additionally, long-term incentives such as stock options and other benefits that private firms may offer are not something that PEMEX generally works with. As PEMEX and other local players struggle to keep their employees, they may look to Mercer to help them become better employers. “We worked with a company that had signed 100 different agreements with its employees over the course of five years. Combining these 100 individual agreements into one, where all employees would have standardized benefits, was an absolute challenge for us. Convincing employees that they would have to let go of existing benefits was not easy. We knew most people were going to lose something, since their agreements would not be tailored to their needs anymore,” says Torres Cross. In order to achieve their standardization goal, Mercer had to work intensively with the company’s leadership team, and in the end, only five people out of 100 refused to migrate into a standardized regime. Mercer’s client now has an internal structure that is cleaner, better organized, and has all of its 400 employees working under the same contracting framework.

Currently, Mercer is working with companies that are looking to improve their productivity through an enhanced internal structure, along with companies requesting salary benchmarks. “Mercer helps its clients decipher which are the best ways to share their success in a given market with their employees, so that retribution, in the form of compensation or benefits, is fair for all parties involved,” states Torres Cross. Companies looking to remain competitive must understand how their employee compensations and benefits compare to what other companies are offering. “By using the International Position Evaluation (IPE), organizations are able to move human resources from one country to another without affecting their working conditions. The IPE establishes standardized levels of various factors so that employees can enjoy comparable benefits as they move to a new country or region,” expresses Torres Cross.