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Headhunters woo low-cost Venezuela talent amid crisis

Stock MarketsAug 05, 2015 02:07PM ET
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© Reuters. Employees of multinational headhunter Korn/Ferry work at the headquarters office of the company in Caracas

By Girish Gupta

CARACAS (Reuters) - Headhunters across Latin America are tapping Venezuela for low-cost professionals as a deepening economic crisis has left many skilled workers earning less money than taxi drivers and waiters.

Highly-trained Venezuelans are seeking to escape a decaying socialist economy in which they often have to work second jobs and spend hours in line to buy basic goods such as milk or diapers.

    The crisis has created a fertile market for global search firms including Korn/Ferry (N:KFY), Caldwell Partners (TO:CWL) and Stanton Chase as well as smaller regional companies.

Apple (O:AAPL) software developer Hector Ghinaglia, 24, was earning about $130 a month at the black market exchange rate until he was recruited through LinkedIn (N:LNKD).

"One day a message appeared offering me work," said Ghinaglia, who was offered $900 a month plus the cost of his flight and visa to work in Colombia.

He is happy with the move despite the higher cost of living there.

The most sought-after professionals include IT experts who face few opportunities in Venezuela's withering private sector and oil and gas engineers loathe to work for state-run PDVSA, which under late socialist leader Hugo Chavez became focused on social development projects rather than operational efficiency.

"If we're looking to fill a special position, such as a geologist or a specialization in oil or gas, Venezuela is a strong option for us," said Claudio Fernaud, the managing director of Stanton Chase's operation in Argentina.

Headhunters have in the past targeted Latin American countries at times of economic crises, including Argentina in the early 2000s and Brazil in the 1980s.

'TRAGEDY'

Particularly destructive to salaries in Venezuela is the collapse of the bolivar currency, which has left an iPhone costing several months' worth of an executive's salary.

Currency controls peg the bolivar at 6.3 per dollar but the black market rate governs much of the economy and is now at 687 bolivars per dollar, having weakened from 173 bolivars at the start of 2015.

"Everybody is looking for payment in hard currency: dollars, pounds, euros - anything but bolivars," said Leonardo Lacruz, the Venezuela director of multinational headhunter Korn/Ferry, adding he has seen "desperation" among executives to leave the country.

"People do the math and realize they're making nothing here."

The Panama branch of Stanton Chase said it receives 30 to 40 resumes per day from Venezuela compared with just one a day from Colombia.

Local businesses are unable to keep salaries in line with rising consumer prices, let alone pay qualified professionals at rates that compete with neighboring countries.

These firms constantly worry that their skilled technicians will be poached, said Juan Carlos Dao, president of Bancaribe, one of the country's top 10 banks.

"It's a tragedy that's very hard to deal with," Dao said in an interview earlier this year. "This is happening to everybody, to all the major corporations in the country."

In turn, foreign companies have little incentive to hire in Venezuela due to price controls that force some to sell at a loss and currency controls that leave them unable to repatriate revenue.

Steady devaluations of the bolivar have caused billions of dollars in balance sheet losses for multinationals ranging from General Motors (N:GM) to Energizer (N:ENR).

MCDONALD'S OR MATH?

Around 5 percent of Venezuela's population of 30 million has left the country since Chavez came to power in 1999, said Caracas-based sociologist Tomas Paez, who has published papers and books on migration.

The government denies the country is losing talent but it does not offer statistics on how many leave.

Venezuelan authorities do not restrict emigration though many who want to leave say they don't have the money to start a new life elsewhere.

Most migrants often don't have the luxury of a job contract before they leave so they hope relatives and friends will be able to help when they arrive in other Latin American countries and especially Miami in the United States.

Frustration with Venezuela's dysfunction has led some professionals to sign agreements that may be less than ideal.

Andreina, 35, says she was earning around $300 a month at the black market rate as manager of corporate affairs for a major multinational in Caracas.

Sick of being unable to find milk and diapers for her young son, she signed up to LinkedIn and was quickly scooped up by an Ecuadorean firm.

She moved in April. Despite now bringing in $2,500 a month, Andreina, who asked that her surname not be published, is aware she is earning less than half what she would in a normal market."They pay so little because they know our quality of life is so bad in Venezuela," she said, adding that her outgoings were now much greater than back home.

But the allure of leaving still shines bright for many.

"I'm earning the same as someone who works in McDonald's," said 28-year-old math professor Anthonny Arias in the city of Merida, an expert in mathematical logic who makes the equivalent of $4 per week at the black market exchange rate.

"Who has more responsibility, someone frying French fries or someone teaching the next generation?"

Headhunters woo low-cost Venezuela talent amid crisis
 

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