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Less brain drain in the tech industry?: How does the smaller exchange rate gap impact talent retention? - Infobae
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www.infobae.com
February 26, 2024
After the pandemic and the great difference between the official and parallel exchange rates, many workers chose to seek employment abroad. What is happening today
By Natalia Donato
In companies in the knowledge economy sector, they affirm that the departure of personnel fell but that the reduction of the exchange gap still has an incipient impact' (Creative Work in the Knowledge Economy - visualIA)
The very high exchange rate gap that predominated in Argentina in recent years, and that skyrocketed after the Covid-19 pandemic, reaching more than 160% in some months of 2022 and 2023, generated an employment crisis in several sectors, but fundamentally in the knowledge economy sector.
The temptation of many young professionals with profiles that are highly in demand in the world (such as technology professionals) to abandon their dependency relationship in a local firm to become hired by a company abroad, earn money in dollars and then exchange them in the informal market. It was huge. In addition to the fact that salaries in dollars are higher, the gap made it much more beneficial to emigrate.
After the change of government and the sharp drop in the difference between the official dollar and the parallel dollar - today it stands at 26% -, the equation begins to change for companies in this sector. And it is estimated that it will do so much more if the Government finally unifies the exchange market in a few months, manages to reduce inflation and the industry becomes more competitive to be able to pay higher salaries.
According to several sources in the sector, a timid change in trend is perceived - for now - also helped by the lower demand for employment at a global level.
From Argencon , an entity that brings together companies providing services in the knowledge economy, its executive director, Luis Galeazzi , told Infobae that “the exchange rate gap was reduced recently, so it cannot yet be seen if that impacted a change in trend”, but he did admit that last year there was less talent drain than in previous years and that it could have been due to a change in the global market.
Archive photo. A thousand Argentine peso bill sits on top of several US hundred dollar bills in this illustration. Oct 17, 2022. REUTERS/Agustin Marcarian/Illustration
“We don't have statistics, but from conversations with companies we know that staff retention increased. The most critical moment was 2021 and the beginning of 2022, when personnel departures reached 35%; That is, in 3 years, a company lost all its staff. Now it is returning to a more normal situation, from 12 to 15%,” highlighted the manager.
Regarding the reduction of the exchange gap, Galeazzi stated that "it is assumed that the change in the economy as a whole, and much more so if there was an exchange rate unification, will improve the conditions for retaining talent."
“Market conditions are changing and I believe they are changing in favor of companies having a more profitable export dollar than before and being able to have the full amount of the dollars they export. They could apply that to the payment of salaries more than what they are doing now. But Argentina is a strange country. Recovering normality will have a positive effect, but we have to see how long it takes to achieve it and how long it takes the market to adapt to that,” added the Argencon executive.
The smaller exchange rate gap, the stability of the dollar and the still high inflation, with salaries in pesos that adjust to the CPI, mean that for many workers the equation of working freelance abroad is no longer so attractive to emigrate (Europa Press)
In turn, from the Argentine Chamber of the Software Industry (Cessi) they stated that a change in trend is indeed foreseen, for now incipient, but that "if the smaller exchange gap and the rise in inflation are sustained, it is no longer "Working abroad is so profitable, since asking for an increase in dollars is almost impossible and locally salaries in pesos will adjust to the CPI and the dollar is stable."
This was explained by María Laura Palacios , director of the Talent Space and pro-secretary of Cessi, who added that “if the scenario continues along those lines, the second semester will return some workers who chose to move.”
“At the moment, those who are in a dependency relationship now think much more than before about making the decision to emigrate, since unless the difference is very high, it quickly dilutes and they end up remaining informal,” explained the director.
According to another source in the sector, there are 50% of companies that bill locally and will not be able to retain talent because their billing in pesos does not accompany the dollar."
With a little less optimism, Santiago Mignone , partner at PWC, observed that “the reduction of the exchange rate gap should help, but he considered that other labor issues must be consolidated so that it is attractive again to work in local firms and abandon freelancing abroad. ”.
The worst moment of talent drain was in 2021 and 2022, but last year, due to the lower global demand for employment, the very high turnover was stopped (visualesIA)
“The labor reform of DNU 70 is suspended by Justice, the deregulation of social works is not yet regulated; the issue of income tax. All of this makes noise for a person who wants to enter a company blank. Furthermore, the gap has to be closed. With a gap and without free access to the exchange market, there is still no incentive to leave freelancing and enter the formal market,” Mignone considered.
In any case, the PWC executive stated that the departure of personnel decreased, due to the recessionary scenario: “People take risks when they see that the expectation is good. When there is uncertainty, you tend to stay in a safe harbor. In addition, we have been adjusting salaries with inflation every two months, which is not a bad condition either,” he said.
Meanwhile, Paula Silvestro , from the global consulting firm Gi Group, highlighted: “We understand that the drain on talent is being felt much less than during the pandemic, because not only are workers returning to in-person presence within Argentina, but also in other countries. countries, which means that many people can no longer work remotely and decide to develop within the country.”
In addition, the executive explained that “the pandemic and remote work resulted in the excessive hiring of technology personnel, and that this type of profiles was in high demand and totally necessary to put all companies in conditions to be suitable for remote work and continue their activities despite the pandemic. But after this situation, most companies noticed that the IT personnel hired at the time to implement 100% remote work are no longer necessary, so the dismissals began.
For his part, Marcelo Roitman , managing director of Experis , of Manpower Group , considered that there continues to be a flight of talent despite the current market conditions. In dialogue with this medium, he pointed out that this is due to the growing availability of job opportunities in contractor format, the attraction of foreign start-ups with compensation packages in dollars and the dissatisfaction of some professionals with the return to a contract format. more face-to-face work in certain organizations. “This change challenges companies to reconsider their work and talent retention policies to adapt to new employee expectations,” said the manager.
In turn, he stated that “the reduction of the exchange rate gap is having an impact on people's employment decisions, although the problem is still relevant.” “Despite this decrease, the lack of confidence in our currency drives many to look for jobs in contractor format, even if these do not guarantee complete job stability and are carried out on a project basis,” Roitman stated.
Source:
¿Menos fuga de cerebros en la industria tech?: cómo impacta la menor brecha cambiaria en la retención de talentos
Tras la pandemia y la gran diferencia que había entre el tipo de cambio oficial y el paralelo, muchos trabajadores optaron por buscar empleo en el exterior. Qué está sucediendo hoy
www.infobae.com
February 26, 2024
After the pandemic and the great difference between the official and parallel exchange rates, many workers chose to seek employment abroad. What is happening today
By Natalia Donato
In companies in the knowledge economy sector, they affirm that the departure of personnel fell but that the reduction of the exchange gap still has an incipient impact' (Creative Work in the Knowledge Economy - visualIA)
The very high exchange rate gap that predominated in Argentina in recent years, and that skyrocketed after the Covid-19 pandemic, reaching more than 160% in some months of 2022 and 2023, generated an employment crisis in several sectors, but fundamentally in the knowledge economy sector.
The temptation of many young professionals with profiles that are highly in demand in the world (such as technology professionals) to abandon their dependency relationship in a local firm to become hired by a company abroad, earn money in dollars and then exchange them in the informal market. It was huge. In addition to the fact that salaries in dollars are higher, the gap made it much more beneficial to emigrate.
After the change of government and the sharp drop in the difference between the official dollar and the parallel dollar - today it stands at 26% -, the equation begins to change for companies in this sector. And it is estimated that it will do so much more if the Government finally unifies the exchange market in a few months, manages to reduce inflation and the industry becomes more competitive to be able to pay higher salaries.
According to several sources in the sector, a timid change in trend is perceived - for now - also helped by the lower demand for employment at a global level.
From Argencon , an entity that brings together companies providing services in the knowledge economy, its executive director, Luis Galeazzi , told Infobae that “the exchange rate gap was reduced recently, so it cannot yet be seen if that impacted a change in trend”, but he did admit that last year there was less talent drain than in previous years and that it could have been due to a change in the global market.
Archive photo. A thousand Argentine peso bill sits on top of several US hundred dollar bills in this illustration. Oct 17, 2022. REUTERS/Agustin Marcarian/Illustration
“We don't have statistics, but from conversations with companies we know that staff retention increased. The most critical moment was 2021 and the beginning of 2022, when personnel departures reached 35%; That is, in 3 years, a company lost all its staff. Now it is returning to a more normal situation, from 12 to 15%,” highlighted the manager.
Regarding the reduction of the exchange gap, Galeazzi stated that "it is assumed that the change in the economy as a whole, and much more so if there was an exchange rate unification, will improve the conditions for retaining talent."
“Market conditions are changing and I believe they are changing in favor of companies having a more profitable export dollar than before and being able to have the full amount of the dollars they export. They could apply that to the payment of salaries more than what they are doing now. But Argentina is a strange country. Recovering normality will have a positive effect, but we have to see how long it takes to achieve it and how long it takes the market to adapt to that,” added the Argencon executive.
The smaller exchange rate gap, the stability of the dollar and the still high inflation, with salaries in pesos that adjust to the CPI, mean that for many workers the equation of working freelance abroad is no longer so attractive to emigrate (Europa Press)
In turn, from the Argentine Chamber of the Software Industry (Cessi) they stated that a change in trend is indeed foreseen, for now incipient, but that "if the smaller exchange gap and the rise in inflation are sustained, it is no longer "Working abroad is so profitable, since asking for an increase in dollars is almost impossible and locally salaries in pesos will adjust to the CPI and the dollar is stable."
This was explained by María Laura Palacios , director of the Talent Space and pro-secretary of Cessi, who added that “if the scenario continues along those lines, the second semester will return some workers who chose to move.”
“At the moment, those who are in a dependency relationship now think much more than before about making the decision to emigrate, since unless the difference is very high, it quickly dilutes and they end up remaining informal,” explained the director.
Faced with an improved position for export companies, which will be able to retain more talent and pay higher salaries in dollars because they are more competitive, firms that sell services in the domestic market will be in trouble, since they will not be able to compete with the salaries that they offer those that sell abroad, added the expert.
According to another source in the sector, there are 50% of companies that bill locally and will not be able to retain talent because their billing in pesos does not accompany the dollar."
With a little less optimism, Santiago Mignone , partner at PWC, observed that “the reduction of the exchange rate gap should help, but he considered that other labor issues must be consolidated so that it is attractive again to work in local firms and abandon freelancing abroad. ”.
The worst moment of talent drain was in 2021 and 2022, but last year, due to the lower global demand for employment, the very high turnover was stopped (visualesIA)
“The labor reform of DNU 70 is suspended by Justice, the deregulation of social works is not yet regulated; the issue of income tax. All of this makes noise for a person who wants to enter a company blank. Furthermore, the gap has to be closed. With a gap and without free access to the exchange market, there is still no incentive to leave freelancing and enter the formal market,” Mignone considered.
In any case, the PWC executive stated that the departure of personnel decreased, due to the recessionary scenario: “People take risks when they see that the expectation is good. When there is uncertainty, you tend to stay in a safe harbor. In addition, we have been adjusting salaries with inflation every two months, which is not a bad condition either,” he said.
“The decrease in the exchange gap did not change the trends significantly. Technological profiles continue to be difficult to obtain and local companies will have to coexist and compete against those that offer payments abroad. The trend could only change when inflation stabilizes and companies can catch up with salary restructuring,” said Soledad Ruilopez, partner in Human Capital at Deloitte.
Meanwhile, Paula Silvestro , from the global consulting firm Gi Group, highlighted: “We understand that the drain on talent is being felt much less than during the pandemic, because not only are workers returning to in-person presence within Argentina, but also in other countries. countries, which means that many people can no longer work remotely and decide to develop within the country.”
In addition, the executive explained that “the pandemic and remote work resulted in the excessive hiring of technology personnel, and that this type of profiles was in high demand and totally necessary to put all companies in conditions to be suitable for remote work and continue their activities despite the pandemic. But after this situation, most companies noticed that the IT personnel hired at the time to implement 100% remote work are no longer necessary, so the dismissals began.
For his part, Marcelo Roitman , managing director of Experis , of Manpower Group , considered that there continues to be a flight of talent despite the current market conditions. In dialogue with this medium, he pointed out that this is due to the growing availability of job opportunities in contractor format, the attraction of foreign start-ups with compensation packages in dollars and the dissatisfaction of some professionals with the return to a contract format. more face-to-face work in certain organizations. “This change challenges companies to reconsider their work and talent retention policies to adapt to new employee expectations,” said the manager.
In turn, he stated that “the reduction of the exchange rate gap is having an impact on people's employment decisions, although the problem is still relevant.” “Despite this decrease, the lack of confidence in our currency drives many to look for jobs in contractor format, even if these do not guarantee complete job stability and are carried out on a project basis,” Roitman stated.
