Global Spotlight on Colombia

Despite moving away from its drug-led violent history, Colombia is in a somewhat chaotic state as far as employment legislation is concerned

June 2014 | By Colin Cottell


Despite moving away from its drug-led violent history, Colombia is in a somewhat chaotic state as far as employment legislation is concerned

“It’s very rare that we get asked about safety,” says Carlos Costa, Morson Group’s senior account manager for the Nokia Solutions Market in Colombia. In a country that was once a byword for drugs, violence and kidnapping, and where according to Costa, only five to six years ago it was common “to have to reassure candidates about their safety”, that is quite a change.

Indeed, these days with consistent economic growth of more than 4% a year and an open economy attracting huge amounts of direct foreign investment, the issues faced by Colombia’s recruiters are of a very different kind. 

“US companies contacted every single member of our staff via LinkedIn,” complains Nick Aldridge, chief executive officer of Kogi Mobile, a mobile application software development company based in Bogota. “There is very little loyalty among staff here.” As a result of high levels of staff attrition, Aldridge has had to hire a total of 50 people in just three years to build his 30-strong company.

Aldridge is keen to praise Colombia for its flexible labour market, which means that employers are relatively free to hire and fire, and are not overburdened with legislation, which he says is on a par with that in the UK. However, he points out it is a double-edged sword. Employers are not allowed to include notice periods in employees’ contracts as it infringes their freedom, he explains, something that “has created chaos”. 

Aldridge claims that “big companies and even the government” use this to their own advantage. “They interview someone on a Thursday afternoon and they tell the person that if they don’t start immediately on Monday they won’t have a job,” he says. 

Putting such practices aside, with a burgeoning oil & gas sector and many multinationals using Colombia as a regional hub, “Colombia is one of the most sophisticated countries in South America”, says Carlos Ratto, who covers Colombia’s human capital sector for international M&A advisers Golden Hill. However, he adds: “It is not yet sophisticated in human capital.”  

Ratto continues: “It is early days compared to the UK and the US. Most jobs are not advertised but filled through networking.”   

However, Costa says the market has matured compared to when Morson first entered the market in 2001. In those days, he says “the requirements were for a skill set that wasn’t available in South America”, with technical staff brought in from the Philippines, Malaysia and Indonesia.

Today, Costa says there is greater demand for local support staff that can speak the language. “Locals don’t have the highest skill set but there is a requirement for them that never existed before,” says Costa. He says that Morson has been able to meet this need by using the expertise of foreign workers that it brings in to train local staff.

Duarte Ramos, Hays’ country manager for Colombia, says the market has “switched very quickly” from one in which employers held all the cards to one in which companies are now “very worried about attracting, recruiting and retaining the right people for the right roles”.

Yet, according to Ramos, HR departments are behind the curve by being “reactive and not planning ahead”. “HR departments are still working as they used to six or seven years ago,” he says. Indeed, so much so that “HR can almost stop the activity because they are so bureaucratic”. He says, by way of example, “they need to see three people”, even though they have the ideal candidate in front of them. 

Martin Padulla is managing director of Staffingamericanalatina, a website that specialises in the South American labour markets, and former managing director of Clett&a, the Latin American arm of Ciett (the International Confederation of Private Employment Agencies). He warns that despite the efforts of the government skills agency SENA, the country’s education system has failed to keep up with the pace of change in the labour market.

 “The country is completely unprepared from an educational point of view,” agrees Aldridge. There is just not enough resource for all the markets, the local market, the international market and the outsourcing market,” he says.   

That said, and certainly compared to Colombia’s troubled past, Aldridge acknowledges “these are good problems to have”.

Key indicators

Colombian facts and figures 

Population: 47.7m

Unemployment: 9.2%

Colombian government statistics

GDP per capita $11.1k (£6.6k)

Real GDP has increased by more than 4% a year in each of the last three years

Size of labour force 23.75m (estimated 2013)

Labour force breakdown (estimated 2011)

agriculture: 17%

industry: 21%

services: 62%

CIA World Factbook

According to the 2014 Freedom Index report, published by the Wall Street Journal and Washington think tank The Heritage Foundation, it takes less than 10 procedures to start a business in Colombia, with no minimum capital required. 

Colin Cottell

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