Companies that evade vacation reform “will save pennies, but lose pesos”

In the implementation of the holiday reform and some ways that companies are analyzing to reduce the financial and labor impact of the changes, companies “can save pennies, but they will lose pesos,” warns Estrella Vázquez, director of the Factor RH firm.

From actions such as granting fewer days than those established in the new vacation formula in the legislation to informing employees that the rest days they have by contract, such as Saturday and Sunday, will be considered when requesting vacations, many companies have taken measures to reduce the initial impact of the reform to the detriment of workers.

Human capital specialists agree that, given the expectations that workers have with the modifications to the vacation regime, the measures adopted by companies that generate “disenchantment” among their workforce, may represent a greatest economic loss for businesses than the intended savings.

“How much does an unmotivated person cost?” asks Estrella Vázquez. “People realize that he could have 12 days, but they are haggling for three for an interpretation. According to the IMSS, an unmotivated person decreases your productivity by 40% And let’s imagine that if a collaborator generates twice his salary, this means that instead of producing 800 pesos a day, he will generate 480 pesos, because it reduces his performance. So, the company loses 300 pesos per day. That’s just doing a hypothetical exercise.”

To this loss, adds the consultant, we must add the cost of absenteeism of workers who are not committed to the company. “A demotivated person is absent on average 15 business days a year. So, by saving three days, we can face a higher absenteeism and that has a cost”.

For Alejandra Toscano, director of DNE Consulting, strategies to avoid more costs due to the impact of the reform can affect people’s commitment and loyalty. “You’re going to save a few days, but in the end, the financial impact that will be had will be greater. Those three days are going to cost you five or ten times more, because that collaborator is going to leave, or if he stays, it is likely that his level of commitment and productivity will decrease. There are also risks that ant theft will increase, because it is related to the level of membership; the less satisfaction, the more incidence”

The consequences of measures of this type, underlines the specialist, will be: annoying collaborators, an increase in turnover, decreased performance and more probabilities of acts of corruption. “These are hidden costs that companies they do not measure and surely the economic impact they have has not been visualized. If you do the math, the apparent savings from those vacation days is not convenient and it becomes a transitory company where people are because there is no other alternative”.

The implementation of the vacation reform, says Estrella Vázquez, offers a key context for Human Resources to adopt the language of business. “If I am in a company where decisions are made based on economy and productivity, then I must have the ability to speak in numbers and expose how much a person produces and the impact of the actions”.

From Alejandra Toscano’s perspective, assuming that businesses do not need workers “is a limited vision”, since it is in emergency situations that the importance of commitment and job satisfaction. “But beyond the legal, it is about building companies that are committed and consistent with the collaborator. It is a matter of dignity and humanity, of recognizing that they form organizations”.

The specialists recognize that the modifications to the vacation regime have an impact on the finances of the companies by increasing the amount of the vacation bonus and the contribution base salary. However, if companies capitalize on the changes, the benefits will be greater than the investment they will make.

The vacation reform came into force on January 1, although the increase will be effective based on the work anniversary date of each employee.

They call to capitalize on the vacation reform

The Mexican Association in Human Resources Management (Amedirh) asked those responsible for talent management in companies to take advantage of the increase by minimum holiday flat to redesign operating strategies and reorganize activities.

“It’s a time when Human Resources has the opportunity to work strongly as a team with all areas of the organization, since now both calendars and processes must be aligned to demand planning so that it can be effective in the very short term,” says Mauricio Reynoso, general director of the association.

No less important will be effective, sufficient and timely communication to employees so that they understand the nature of the changes and what the benefits are, indicates Amedirh.

“It is essential that the workforce have the greatest possible clarity about what are the new alternatives that are available to them with this extension to the basic vacation period inherent to contracting, how it operates and, above all, the impact it has on the calculation of variables such as the vacation bonus, which usually arouses concerns among people”, says Mauricio Reynoso.

Alejandra Toscano believes that the implementation of the reform must be seen from a financial aspect, but also from work environment and commitment. “These are not isolated issues, they are connected and a savings strategy can be more expensive. I believe that companies should have a broader vision”.

In this vein, the specialist recommends companies capitalize on and accept changes in a positive sense. “If we turn the vision towards a topic of results, it becomes something more viable. It is necessary to make alliances with the employees to set the conditions so that all enjoy the holidays”.

Estrella Vázquez agrees on this, Human Resources departments must embrace change and align them to their organizational culture, as well as demonstrating in business language that temporary savings can be counterproductive in the long run. “I think that the companies that are making these decisions are based on numbers, but only seeing a part of the map, and as Human Resources we can provide that complete map.”