Bruna Zampieri Colpani and Maísa Vidal
Lawyers at Marcos Martins Advogados
INTRODUCTION
In the struggle to achieve their business and social goals, companies face stiff competition from major conglomerates on a daily basis, which requires constant efforts, with innovation and creativity, to offer excellent products and services at fair prices. This is a scenario in the Brazilian economy that has tapered off in the face of recent global events, in which companies have increased the already fierce competition for recognition in the market, both in relation to their target audience, but especially in terms of retaining top talent, given the shortage of qualified labor.
It is therefore increasingly necessary to adopt strategies to provide a good working environment, especially by strengthening and retaining human talent, because it is through them that the mission and objectives are achieved.
Retaining talent is nothing more than carrying out strategic management to attract, identify, develop and retain employees with potential and great skills, and providing compatible remuneration, working on challenging projects and an adequate infrastructure, in other words, aligning interests between the company and employees.
CAREER AND SALARY PLANS AS A STRATEGIC TOOL FOR RETAINING TALENT
Ever since society moved away from the logic of working for the community to producing for the community and started thinking about surplus production, in other words, profit, labor has been exploited and this exploitation of labor has generated what we know today as wages.
However, for more than 300 years, the basis of the Brazilian economy was slave labour, and even after 1888, when slavery was abolished, the government was slow to move to demarginalize the employee-employer relationship.
It wasn’t until 1940 that the first discussions on a minimum wage emerged, with the enactment of Decree-Law 2,162 of May 1. The Consolidation of Labor Laws was only sanctioned in 1943, through Decree-Law no. 5,452 of May 1, by then president Getúlio Vargas.
Article 76 of the CLT defined the concept of the minimum wage as “the minimum consideration due and paid directly by the employer to every worker, including rural workers, without distinction as to gender, per normal day of service and capable of satisfying, at a given time and in a given region of the country, the normal needs for food, housing, clothing, hygiene and transportation”. Article 457 goes on to say that: “In addition to the salary due and paid directly by the employer as consideration for the service, tips received by the employee are included in the employee’s remuneration for all legal purposes”.
That said, it is an indisputable fact that structuring and implementing a job and salary plan provides numerous benefits and advantages in the organizational scenario. CHIAVENATO (2014, p.10) teaches that “People as partners in the organization are capable of leading the organization to excellence and success. As partners, people make investments in the organization – such as effort, dedication, responsibility, commitment, risks, etc. – in the expectation of reaping returns on these investments – through salaries, financial incentives, professional growth, satisfaction, careers, etc. Every investment is only justified when it brings a reasonable return. To the extent that the return is good and sustainable, the tendency will be to maintain or increase the investment. Hence the character of reciprocity in the interaction between people and organizations, and also of autonomy and action – no longer passivity, inertia and dependence.”
In short, the majority of a company’s employees are interested in investing work, dedication and personal effort, along with knowledge and skills, as long as they receive an adequate return.
The best position is the one that disconnects the difference between salary and benefits, so that the employee sees the whole of what is being provided, and thus feels more motivated by knowing where they stand and what they need to do to reach the highest position.
Let’s see, a well-structured system of positions and job descriptions that is attentive to the real demands of the business allows for an effective division of labor to achieve objectives, detailing the activities to be carried out and what performance is expected, and not least, it provides subsidies for the hierarchical remuneration policy, which should be based on the complexity and strategic nature of each function, generating the power to attract and retain talent. The job and salary plan established by the organization aims to align the personal career plan with the development plan proposed by the organization.
A career plan is the formal explanation of a planned, structured, sustained and sequential set of stages that consolidate the evolutionary reality of each individual, in an interactive way with the needs of the companies and the communities in which they operate. (OLIVEIRA, 2018, p.4.)
In other words, the more complex the functions, the higher the level of skills required, the greater the demand for professional maturity. The more strategic, the greater the value of the position for the organization. In this way, the more complex and more strategic positions will always have higher salaries and benefits, and the structured job and salary plan explains the reasons for the existing salary differences and what should be done to reach higher levels in the organizational pyramid. Mendonça (2002) states that retaining talent is the effort made to keep people satisfied and committed to the results of the organization they work for and to generate motivation so that they don’t leave. Talent retention is the organization’s ability to keep professionals on its staff who will help the company to remain competitive for longer in a transient market. According to Senge (apud CASTRO, 2011, p. 02):
“Learning organizations are those in which people continually expand their capacity to create the results they really want, where new and comprehensive thinking patterns are encouraged, collective aspiration gains freedom, and where people continually learn to learn together. Keeping talented people in organizations has ceased to be a differentiator and has become a secret of success, with their work recognized, the degree of involvement increases and they have more and more of their knowledge at their disposal.”
In conclusion, it is the primary function of companies to align their pay practices with their own demands for quality of service, and this requires the adoption of a new way of generating value, what we call strategic remuneration, a competitive differential to attract talent and keep them stimulated to constantly offer better performance. Along these lines, what defines the amount received at the end of a month’s work is defined through a set of metrics based on individual performance and each person’s needs, taking into account their dedication, performance indicators, quality of deliveries, among others.
To this end, companies are increasingly using flexible, more advanced and sophisticated processes to incentivize professionals, developing reward systems capable of having a direct impact on the ability to attract, retain and motivate their employees, who end up contributing to the organization’s objectives and increasing profitability.
Most organizations deal with remuneration by dividing it into basic remuneration and salary incentives. Basic pay is the fixed payment that the employee receives on a regular monthly or hourly basis. Incentive pay, on the other hand, is a program designed to reward employees who perform well and provide a better quality of life, a balance between personal and professional life.
Incentives are granted, such as bonuses and profit-sharing, as a reward for results achieved. Benefits, almost always referred to as indirect remuneration, are granted through various programs such as vacations, life insurance and transport etc.
Thus, total remuneration is the package of quantifiable rewards that an employee receives for selling their workforce. Employee retention or loyalty to the company is influenced by the attractions offered by the company and the reconciliation of these with one’s personal goals.
Transparent communication, participation in events, quality of life, corporate citizenship and valuing potential are all aspects that enrich this relationship.
“It’s not enough to pay people for the time they dedicate to the organization. That’s necessary, but not enough. They need to be continually encouraged to do their best, to go beyond their current performance and achieve challenging goals and results.” (CHIAVENATO, 2004, p. 288)
Therefore, keeping talent in the organization is directly linked to the management tools they use. These tools are what competitive companies prioritize, such as fulfilling the mission, vision and values, highlighting issues such as respect for people, integrity, ethics and increasing learning and the possibility of career development and competitive advantage in the organization’s niche. Employees who receive recognition feel part of the business and are therefore encouraged to carry out their duties to perfection, as they effectively become a driving force for success.
LABORCOMPLIANCE AND THE REDUCTION OF LABOR LIABILITIES
According to the General Labor Justice Report, more than 1 million new lawsuits were filed in 2020, and this means a very costly scenario for companies in general, especially after the judgment of ADIns 4425 and 4357, which determine the monetary correction of labor debts by the IPCA-E, an index that, in 2016, accumulated 6.58%, while the TR, the index used to update credits until 24/3/15, accumulated 2%. Add to that the default interest of 1% per month, procedural costs, social security charges and income tax, which sometimes triples the amount originally owed.
It is clear that throughout history, and even more so in the last two years with the pandemic, it has been difficult for companies to comply with labor regulations, mainly due to the financial aspects required to do so, and given this situation, adopting a compliance program is one of the best solutions for preventing labor liabilities. Mathis and Jackson (2003) point out that it is important to value employees and retain talent, as this results in lower turnover rates translated into lower recruitment, selection and training costs; individual and organizational performance is increased by the continuity of employees who know their jobs, their colleagues, their organization with its values, culture, products/services and its customers; and employee retention leads to a better organizational image, which in turn attracts new talent.
The authors also highlight organizational components, career opportunities, work projects, rewards and relationships with employees as determinants of talent retention.
As discussed in the previous topic, when companies organize themselves, adopt well-defined rules and criteria, and effectively manage the Job and Salary plan, they create a consistent and solid basis for preventing risks and defending themselves in the event of labour disputes.
Thus, compliance has emerged as a governance practice, which is nothing more than a self-regulatory tool for institutions, both in terms of preventing future labor liabilities and in terms of adapting the company’s internal structure in order to prevent illicit activities and promote a corporate culture based on ethics and respect for the law. Investing in compliance is like investing in a collaborative working environment that stays away from any kind of conflict and litigation.
Good compliance in the area of labor rights involves providing companies with important information about a company’s rights and duties. According to specialist Roberta Luna Cerqueira Campos, “labor compliance is based on advisory and preventive action by specialized lawyers, so that companies comply with the rules in force and, consequently, risks are mitigated, providing business continuity”. That said, compliance includes time banks, breaks between and within working hours, granting of vacations, bonuses provided for by law, FGTS, 13th salary, maternity leave, etc.
However, it is essential that, in addition to creating guidelines, a mechanism for monitoring and internal sanctions is created, within the limits of an employer’s directive power, in order to continue avoiding damage to the company’s image and reputation and providing a healthy organizational climate. A well-implemented labor compliance program brings numerous benefits to the company, allowing good business continuity and bringing greater peace of mind to the employer, as well as to the employee.
It is therefore essential that labor compliance is structured with the direct assistance of a lawyer who specializes in labor law, in order to effectively achieve compliance with the law. According to Fachini, labor compliance can address a number of issues, such as, for example, the types of labor contracts, recruitment and selection processes, hiring and firing employees; safety at work, personal protective equipment, additional health and safety benefits, and workers’ health; hiring outsourced workers, clauses, taxes, payments, risks and preventions; values and culture in the corporate and work environment, interpersonal relationships between employees, means of integration and promoting respect for diversity; working hours, definition of duties, hours, bonuses, remuneration policies, permitted and prohibited behavior, characterization of deviation or accumulation of duties, application of penalties; environmental impacts resulting from the company’s activities and the implementation of prevention and awareness measures; customer service and other external clients, guidelines for action, behavior and good practices, among others.
In other words, it is through the adoption of compliance in all areas of the company that labor aspects are kept within the law, from recruitment to any dismissal, transmitting credibility, commitment and transparency in actions, even enabling business expansion.
CONCLUSION
Based on this critical analysis, it can be said that, over the years, people have become a capital of fundamental importance for the prosperity of organizations, so the demand for qualified professionals is growing all the time.
However, it is not enough to identify and hire a good workforce, it is essential to retain them, develop them and provide them with adequate remuneration, which happens through a well-structured and effectively applied job and salary plan.
In this way, organizations need to structure themselves according to their own objectives and make it clear to their employees that there is no link between salaries and benefits.
Furthermore, and of the utmost importance, as a governance strategy, compliance, based on advisory and preventive action, mainly from the labor perspective addressed here, helps to comply with legal and internal rules, avoiding unethical and/or illegal actions, cooperating for the company’s growth in the eyes of shareholders, to the extent that it avoids labor liabilities with transparency, allowing for a more credible relationship between employee and employer.
REFERENCES
CHIAVENATO, Idalberto. People Management: the new role of human resources in organizations. Rio de Janeiro, Campus, 2014.
National Council of Justice. Justice in numbers 2021. Brasília: CNJ, 2021. Available at: https://www.cnj.jus.br/wp-content/uploads/2021/09/relatorio-justica-em-numeros2021-12.pdf
History of Wages – Special Report. Superior Labor Court. Work and Justice Program – Radio Justice, Brasília. Available at: https://www.tst.jus.br/noticia-destaque-visualizacao/-/asset_publisher/89Dk/content/reportagem-especial-historia-do-salario (Accessed on 22/11/2021)
MENDONÇA, Márcia da Costa Furtao de. Retaining talent through recognition and reward. São Paulo, 2002. Available at: https://bibliotecadigital.fgv.br/dspace/handle/10438/3745.
OLIVEIRA, Djalma de Pinho Rebouças de. How to draw up a career plan to be a successful professional. São Paulo: Ed. Atlas, 2018.
FACHINI, Tiago. What is labor compliance? Available at: https://www.projuris.com.br/compliance-trabalhista/#o_que_e_compliance_trabalhista
