Latin America: IT Workers Ride Economy's Roller Coaster

Their fortunes tied to turbulent local economies, IT workers find their best bets are at U.S. affiliates

While a dismal economic outlook has cast a pall over some parts of the region, the twin forces of globalization and technology have served to unify this vast area commonly known as Latin America. From the Rio Grande to Tierra del Fuego, by way of Central America and Brazil, these countries have much in common in terms of IT employment.

As is the case in much of the world, IT is a privileged area of work in Latin America. "Traditionally, workers in the technology sector have a different profile in the workforce," says Sergio Marino, a founding partner at Ferengi Syneptic Links, an Internet application development company in Buenos Aires. "Their technical training, linked to advances in the science that has revolutionized the world over the last 20 years, and their interest in professional qualification and personal growth have served to advance their job opportunities."

But the concept of one company standing head and shoulders above others in terms of fostering career satisfaction and growth is somewhat alien to Latin American employees, except at the higher managerial levels. In many countries, salaries and benefits are determined by law or broad collective labor agreements, so marked differences between companies of similar size simply don't exist. "People are content with having a job," says an Argentine IT industry editor. "They are not picky -- at least not now."

IT's Stake in the Market

Workers in the IT industry, however, continue to have the best prospects in most Latin American countries, where strong demand for skilled IT workers surpasses the available supply. "While unemployment in general is low in Mexico at the moment [approximately 2%], it is practically nonexistent among IT workers," says a spokesperson at the Mexican Office of Labor and Social Insurance in Mexico City. The situation is similar throughout most of the region.

"The [Chilean] market is perfectly balanced -- demand for professionals is met by supply. Chile did not experience the dot-com boom, and as a result, there was no impact on demand; when the sector ran into a crisis, the IT employment market was not affected," says Benjam'n Toselli, general manager at Chilean recruitment firm Activa Gente de Informatica in Santiago.

Right now, the exception to this rule is Argentina -- the third largest IT market in Latin America after Brazil and Mexico. It saw large-scale development of Internet businesses and was considered by some to have been the region's pioneer in this type of commercial development. However, the collapse of the dot-com market began to seriously affect the labor market in 2000, and the situation was further worsened by the economic downturn of 2001.

Carlos Pallotti, vice president of Datastream Computec, a Buenos Aires-based subsidiary of U.S. asset life cycle management company Datastream Systems Inc., paints a serious picture.

"Over recent months, recession and, more recently, the acute Argentine financial crisis have triggered a series of layoffs, and that situation is not likely to slow down in the foreseeable future," he says. "I believe that at least 40% of jobs in the industry will be lost ... especially in international companies that have downsized their workforces or have simply closed down local operations.

"Nonetheless, some local firms will capitalize on the ready supply of qualified workers willing to accept lower wages "to reposition themselves on the market with lower costs," says Pallotti.

Many of these displaced professionals would typically look for opportunities in the U.S. but are now staying put. "Unfortunately, the falloff in jobs in the U.S. will not aid that trend," says Pallotti.

The U.S. recession has also affected other countries in the region. According to a poll conducted among Brazilian employers by the Brazilian American Chamber of Commerce, "the greatest concern is the recession in the U.S.," which could affect exports from Latin American countries and employment. For the most part, this won't affect salary levels in the IT industry because those workers are in short supply, but it will restrict the industry's investment in hardware and training.

Despite that, affiliates of U.S. companies are still the preferred hunting ground of IT job seekers. "The large multinational companies offer an intellectual and professional challenge in attractive technological projects ... a stimulating atmosphere and the chance to gain international experience," says Guillermo Beuchat, managing partner at Beuchat, Batlle & Edwards Consultores, a technology consulting firm in Santiago, Chile.

"Workers aspire to an intellectually challenging environment and the possibility of having some international experience as a desirable plus," he says. In Chile, for example, Microsoft Corp. was recently ranked No. 1 by the Great Place to Work Institute, a workplace consultancy that periodically surveys employees in the U.S. and abroad on the quality of their working relationships. In Chile, 3,800 businesses of all trades were polled in 2001 by the institute and ranked according to the employees' perceptions of the quality of their workplace relationships, says Rodrigo Garib, a spokesman for the organization.

International firms also generally try to protect their highly trained key employees and find positions for them in other affiliates when local operations are downsized.

What Lies Ahead for Workers

Latin American IT employees have traditionally preferred the job stability that comes with staying at one company, and a tough economy has served to reinforce that preference. "This position offers me some stability, and I am thankful for it," says Harold Streuli, a systems technician at the Universidad Cat—lica Argentina in Buenos Aires. But there is growing interest among IT workers for shorter-term contracts that are professionally more challenging. "In the last few years, there has been a radical change in job aspirations. ... Now the tendency is to look for technologically dynamic jobs, with higher professional challenges," says Activa's Toselli.

The greatest challenges in the year ahead for IT workers in the region will be maintaining a high degree of specialization and keeping abreast of change, particularly in Internet-related technology. Unfortunately, with the slowdown in the economy, many Latin American companies are cutting back. "Companies always cut their training budgets first," notes Maria Julia Maestri, conferences manager at E. J. Krause & Asociados, which is the organizer of Comdex Buenos Aires.

Best employers in the region aren't following this trend, however. "Our company is paying and will continue paying for employee training," says Diego Lopez, director of IT at Objeq in Quito, Ecuador. "I was sent to a postgraduate course, for instance, paid by the company." In addition, Objeq contracted a native English-language teacher last year and offered English courses at three levels of proficiency to the company staff, he says.

Although the year ahead is shaping up to be a tough one for IT workers, it's expected to be better than previous years. "The job market will see balanced expansion in all areas. There will be sustained growth -- slow, but steady," says Marcos Possari, a partner at the Prime Group, a human resources and recruiting company in Vila Mariana (Sao Paulo), Brazil. "We will see growth in job openings in IT."

Calabia is a freelance writer in Buenos Aires and Madrid.

Copyright © 2002 IDG Communications, Inc.

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