Most common challenges faced by Brazilian Businesses

Growing at a rate of 5% per year over the past ten years, Brazil is one of the fastest growing Economy in the world. However, some barriers are still hard to overcome and directly affect the “doing business” part.

Through this article, I have decided to emphasize the most common problems that organizations face in Brazil in order to give you a better understanding of what  you should be careful if you become a leader in Brazil.

      First, there is a high staff turn-over within the workplace. Brazilians do change jobs very often and are not afraid to do so because it is a part of their tradition in which a successful career is directly linked to money and not to the construction of a company or a brand. Be aware that they are used to leave the organization without any warning before, leaving the employer in a tought situation as he will have to rush the hiring process to replace the employee. Also, when an employee leaves, he creates a lot of problems, like both generating costs for the hiring of a new employee and overwork for other employees, which tend to negatively affects the workforce performance and may lead to poor development of the workflow.

So, if you intend to lead a Brazilian business, be careful to spend lots of time discussing with your team and give regular feedback to your employees in order to make them feel valued for their work and increase their satisfaction.




The second challenge that I would like to talk about is the high amount of taxes paid by Brazilian Businesses. Brazil still has the highest tax burden of all BRIC countries (Brazil, Russia, India and China). When opening a company in Brazil, it is estimated that entrepreneurs spend at least 67% of their profits with taxation matters because Brazil has got more than 275000 norms regarding the payment of taxes.

So, before doing business in Brazil, inform yourself on all the taxes usually charged in this country, such as the CIDE, the COFINS, etc, with the aim of forecasting your future expenses.

         
    Thirdly, delay and absenteeism is also threatening at a high level the growth of Brazilian businesses because delay and absenteeism affect negatively the workflow in several different ways.


In fact, because this absenteeism is mostly caused by diseases, stress, demotivation or the willingness to be fired by employer, if you are leading a team in Brazil you have to remember to look carefully after your employees by listening attentively to them, asking them about their satisfaction within the organization, fully engaging them, recognizing their individuality, what stimulates them and keeps them striving to do their best, while maintaining a collaborative environment where everyone is working toward the same end goal. And as Richard Branson, founder of Virgin Group, perfectly said : « take care of your employees and they will care care of your business ».





    Also, benefits are another challenge that Brazilian companies have to deal with. Benefits are what make hiring in Brazil so expensive and is one of the reasons why Brazilians change working position so frequently. But, contrary to what you are probably thinking, I am not speaking only about mandatory benefits but also about non-mandatory benefits. Among the mandatory benefits, we could find extra paid vacations, paid transportation, the 13th Salary, meal’s ticket for employees working more than 8 hours a day, or also the paid leave (four months for pregnant women and five days for men who have become fathers). Among the non-mandatory, we could mention the life insurance and health insurance, the day care center, and the Programa Participação nos Lucros e Resultados (profit sharing plans).

Thus, to avoid loosing any employees within your business, I would suggest you to not forget rewarding your team when they deserve it. For example, by promoting the most efficient workers, giving them rewards when they deserve it, etc.



    Finally, you have to be conscious of the high percentage of the overtime payment due to your employees, directly linked to holidays. In fact, Brazil has got 11 federal holidays and each Brazilian city has its own holidays. For example, Sao Paulo has its birthday on January 25th and celebrates the revolution in July 9th. Most Brazilian holidays are of religious nature and very much related to traditions, like Carnaval. Officially, Carnaval is only a holiday on Tuesday, but most people take off Saturday, Sunday, Monday, Tuesday and half of Wednesday. Be aware that a a leader you are not obliged to give away this day between the holiday and the weekend, however, you are very expected to do so if you want to gain the respect of your team. 

Nevertheless, the negative outcome of this kind of holidays is that Brazilian employees are used to work extra hours to compensate for these days, and companies are required to pay overtime of 100%. So, the advice that I could give you is to spend time on creating a structured environment in order to be proactive in time management and avoid employees to work extra hours. To achieve this, think about planning tasks, developping a precise schedule, and communicating with your team members in order to be fully aware of their own schedule. 

And as Joyce Meyer claimed: "we don't grow when things are easy, we grow when we face challenges". 

 

Sources:

Shaw, C. (June 21, 2015). Virgin shows links between employee experience and customer experience. Retrieved from:
https://beyondphilosophy.com/virgin-shows-links-between-employee-experience-and-customer-experience/

Novais, A. (2012, June 25). The 7 Most Common Problems for Businesses in Brazil. Retrieved from:  http://thebrazilbusiness.com/article/the-7-most-common-problems-for-businesses-in-brazil

Kelley, M. (2015, August 5). The spiritual importance of scheduling. Retrieved from: http://www.lifeway.com/leadership/2015/08/05/the-spiritual-importance-of-scheduling/