Latin American Countries Rank Low In Employee Retention, Study Finds

CHICAGO — Labor is an important part of any country's economy, and employers retaining talented employees is vital for growth. Unfortunately, a new report from the International Institute for Management Development (IMD), an independent academic institute founded by business executives, revealed that Latin American countries ranked low in retaining "talented" employees.

The study analyzed employment in 64 countries on the basis of how much countries and employers invest in developing "home-grown talent" and how appealing it is for workers to remain in the local labor force.

"The success of the investment in and development of talent and the ability to attract and retain talent is reflected in the availability of skills and competencies to sustain an economy's talent pool," reads a section of the report.

Chile was the highest-ranked Latin American country for employee retention and came in 50th place. According to the report, job investment was average in Chile; however, local employees were not attracted to remain in the local labor pool, which resulted in the low rating.

A similar story is seen throughout Latin America as countries fail to appeal to local workers to remain in the local labor market, according to the report. Nations such as Argentina (54), Peru (55), Colombia (57), Mexico (59), Venezuela (62) and Brazil (63) were among the lowest ranked countries in the International Institute for Management Development's labor study due to having low appeal for local workers.

The study did not include Central American countries and some countries in South America, including Uruguay, Ecuador, Paraguay and Bolivia.

Another factor in Latin America's low ranking in the study could stem from high unemployment rates in the region. For example, Chile and Brazil both have unemployment rates north of 8%, while countries that ranked high in the study, such as Switzerland and Germany, have unemployment rates in the 2% range.

Latin American countries have also hemorrhaged skilled workers through migration in recent years. It is estimated that since 2020, some 25 million Latin American and Caribbean residents have left their home countries, according to the UN.