Costa Rican Companies Predicting 2009 Growth

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According to El Financiero, some of Costa Rica’s major employers are planning on maintaining and or increasing their payrolls in 2009. In the shadow of a decelerating economy and a downturn in new job growth, some companies are preparing to add employees. Major employers have been revising their strategies, based on payroll information provided by the Social Security System (CCSS).
Those organizations with the best performance are talking about keeping up their pace and searching for new opportunities. HP (Hewlett-Packard) is the company with the greatest employment growth (161% during the past three years), and is planning to employ as many as 8,000 people in Costa Rica in 2009. According to María Luisa González, human resource manager of HP in Costa Rica, “Hewlett Packard is expanding its printing solution portfolio with the intention of capitalizing on the market now evolving from analog to digital.”
In the private sector, Sergio Gallardo, human resource manager of United Supermarket Corporation owned by Wal-Mart Central America, indicated that their staff will grow based on local expansion plans. Additionally, Grupo Empresarial de Supermercados (GESSA), #2 in the top ten ranking, is also predicting growth. Alejandro Oreamuno, GESSA human resource manager, indicated that in 2009 they will proceed with their strategy to increase their presence in different regions, which allowed them to grow 20% in 2007 and 34% in 2008. “Our group has experienced significant personnel growth because we have opened stores in different markets.”
The size of the payroll isn’t the problem; obtaining new business in the current economic environment is the challenge.
This conclusion is supported by the Manpower survey about employment expectations during the first quarter this year. Although the indicator dropped ten points compared to last quarter (from 29% to 19%), employers are still planning to add not subtract employees: 61% of those asked said they would maintain their payroll, 28% said it would increase whereas only 9% expect layoffs. Eric Quesada, regional director of Manpower, pointed out that despite the current economy, Costa Rica remains one of the few countries in Latin America where employment loss hasn’t been as dramatic as in other regions.
However, a genuine challenge lies ahead. Quesada stated that the international financial crisis could have aftershocks in the country because the reduction in the foreign demand of goods will effect employment. According to Procomer, exporters employ 409,439 people in Costa Rica (21% of the workforce). The generation of new jobs slid from 96,000 new jobs in 2007 to only 32,000 in 2008: a 66% decline.
This is why the National Employment Rescue Plan promoted by President Arias is a needed. The plan’s purpose is to prevent additional unemployment. And the government’s role as an employer needs to be carefully balanced because of the countries top ten employers, six belong to government entities, three to production unions and only one to the private sector. The Ministry of Public Education (MEP) maintained its high ranking while the Public Works and Transport Ministry (MOPT) slid in the ranking (dropping 8%). Banco de Costa Rica (BCR) is the entity with the greatest public sector employment increase (28%).
In 2008, associations experienced fluctuations: from a solid 20% growth in three of the top ten leaders, to standstills or losses in three others. The Union of Small and Medium Agriculture Producers rose to first place, followed by the Union of Independent Producers and Various Activities (UPIAV). The agricultural industry is restoring its potential to be one of the main employers in Costa Rica.
Costa Rica’s major employers have changed in recent years: 60% are in private sector, 23% in the public sector and 17% are associations. In this new environment the private sector companies are strongly emerging. According to María Luisa González, human resource manager of HP in Costa Rica, “Despite the downturn in the economy, Hewlett Packard is moderately optimistic about 2009.” She’s projecting approximately 250 new employees will be hired each month, in a continuous search based on prospects that speak English in the information technology, customer service and accounting areas. Alejandro Oreamuno, of GESSA added, “It’s an old adage; only with business growth can the payroll increase and only with good workers can the business stay afloat.”

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