Living in Peru : your everyday companion

Info provided and translated by the
American Chamber of Commerce of Peru (AmCham Peru)

A Project is Born

The process took a year. To a great extent, this was due to the complicated nature of defining the characteristics of indicators and also due to the different ways in which the companies measured their indicators. During several meetings, first of personnel from Deloitte and the AmCham Human Resources Committee, the most relevant indicators were selected, as well as a group of questions to collect information on certain human resource practices. Then the companies were invited to participate. After 12 companies had expressed interest, the process began, which demanded several work sessions, of the companies directly with Deloitte as well as in groups to standardize the criteria to be used. In this process we were able to clarify what information would have to be considered for each indicator, and if the data to be taken had to be the average, end-of-year or accumulated data, etc. We saw how each company assigns different roles to the human resources area and so, it was necessary to filter much data. Thus for example, some companies had the cost of security as part of their human resources budget, others had all company training there, among other points. It was interesting to see how to achieve consensus in the criteria to be used as well as in the indicators.

Why a Benchmark in Human Resources?

The big question of the reader must be related to the usefulness of this information. It is interesting data, but how can it be useful in my management or for my company?

a) All management needs a reference point. This can be internal, so that one is being measured against oneself and when observing the trend, you can appreciate if you are improving or not. But there will always be the doubt about whether there is a better way to do things, and this is where desire is born to compare oneself to other companies, especially with those that are related to your business.

This is where certain indicators enter, such as invoicing, operating costs and profits per employee, data that is much more relevant if you compare yourself with companies in the same sector. Then there are indicators that measure the total compensation and remuneration on the invoicing or operating costs. This it is an interesting piece of data, because it can be seen that the service companies are very sensitive to any fluctuation in the cost of labor, because this component can come in at 40% of the invoicing of a company, versus an average of 15% for industry.

There are also indicators of the cost of searching, rotation, training, and intermediation, to mention a few.

b) All human resources managers need arguments to be able to convince the general manager or the management committee, especially if he wants to recommend an increase in resources or the incorporation of some new practice. This information provides certain elements, for example how many people are necessary in the area of human resources (the medium of this study indicates that it is 1 for each 79 employees), what other elements must be used in the compensation model (bonus, commissions, prizes, etc.), investment per capita in training (the medium was S/.640 per employee), etc.

While the data obtained can be extremely interesting, the challenge is that each year more companies participate, and thus there is the possibility of being able to exploit the data of sectors that are the most relevant to our lines of businesses.

Additionally, if continuity is obtained in the measurements, with the passing of the years we will be able to measure a tendency, which will permit seeing progress achieved. The next challenge will be to measure these indicators regionally.