Lack of skilled labor hampers Brazil companies-poll

Wed Apr 6, 2011 4:21pm EDT

* 70 percent of companies don't find skilled workers

* Companies see training programs as way to ease woes

By Cesar Bianconi

SAO PAULO, April 6 (Reuters) - Seven in every 10 Brazilian companies are currently facing a shortage of skilled workers, a fact that is weighing on their competitive position and lifting costs, a survey by the country's largest industrial lobby showed on Wednesday.

The National Industry Confederation poll with over 1,600 companies found the shortages are making manufacturers less competitive relative to peers abroad. One major issue is the precarious state of Brazil's primary and secondary education.

"What brings the most attention is the fact that companies are feeling the pinch of something that universities and other specialized education institutions are too -- the poor quality of basic education," Renato da Fonseca, head of research at the Brasilia-based group, known as CNI, said.

That underscores a challenge for Brazil to keep growing steadily ahead, as labor shortages push wage costs higher and hamper profits in the long run. Nearly all of Brazilian companies polled by CNI are at the moment not being able to fill in open positions.

About 78 percent of companies are investing on their own training programs to overcome the lack of specialized labor, CNI said.

PETROBRAS

Brazil's state-controlled oil company Petrobras (PETR4.SA), for example, set an 11-month-long training program for newly-hired engineers, to strengthen their knowledge before going on the field to work.

Petrobras has spent more than 100 million reais ($61.9 million) per year to qualify its engineers.

Education Minister Fernando Haddad told Reuters in July that the perceived lack of qualified workers was a short-term issue and said increasing education investments could help close the gap.

The ministry's budget for 2010 was 60 billion reais, 16 percent higher than in the prior year, and twice as much that of 2006.

However, public investment in education in the past years was less than 5 percent of gross domestic product. Some analysts say the Brazilian government should invest at least 7 percent of GDP a year in order to improve the education system.