High staff turnover dents productivity at Brazilian companies: Economists

Generous welfare system makes it easier for some to change jobs

High staff turnover dents productivity at Brazilian companies: Economists
Workers clean the windows of an office building in Sao Paulo, May 15, 2015. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) — Persistently high staff turnover at Brazilian companies, despite record unemployment, is hampering efforts to boost corporate productivity as firms await the end of the worst recession in decades, economists said on Tuesday.

Employee turnover ended last year at 4.71 percentage points, according to calculations by consultancy firm Tendências based on payroll data, in line with its level of a decade ago.

While the rate was down from a peak of seven per cent at the height of Brazil's commodities-driven boom earlier this decade, economists say the fall is not as large as expected given a sharp rise in unemployment. The jobless rate hit a record 11.5 per cent last year.

"It's strange that staff turnover has not fallen more sharply," said Alessandra Ribeiro, an economist with Tendências. "When unemployment grows, it's harder for employees to jump from one job to another."

However, experts say that Brazil's generous welfare system makes it easier for low-income and low-skilled workers to change jobs frequently.

The monthly jobless benefit, paid for up to five months, is worth at least the minimum wage, so many workers have an incentive to quit their jobs without any income loss.

Severance pay is also mandatory in Brazil.

A survey by Brazilian industry confederation CNI showed that 20 per cent of workers who left school before fifth grade held more than 10 different jobs during their working life, compared to just eight per cent of workers with college degrees.

"Workers become less skilled and companies less inclined to invest in training," said the head of research at CNI, Renato da Fonseca. "This hinders economic and productivity growth."

On average, the productivity of Brazilian workers is around one-quarter the level of their U.S. counterparts, economists say.

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