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Non-production workers have increasingly turned to manufacturing telecommuting in Costa Rica
The application of teleworking as a mode of employment among non-production workers in Costa Rican factories was one of the issues analyzed in a recently written report entitled “Survey of Economic Perspectives and Valuation of Competitiveness Factors of the Industrial Manufacturing Sector, 2021.” The country’s Chamber of Industries prepared this document on manufacturing telecommuting in Costa Rica.
Sixty-one percent of all of the surveyed companies utilized teleworking, by either engaging in it for the first time or expanding the number of employees working off-site. By operating regime, 87% of the Free Zone companies and 57% of the Definitive Regime companies used teleworking. In the case of the Definitive Regime, the use of this modality is directly related to the company’s size. Large companies utilizing manufacturing telecommuting in Costa Rica reached 88%, in medium-sized companies the figure reached 61%, and in small companies, the number was 33%. Free Zone Regime companies in Costa Rica belong to targeted manufacturing sectors and enjoy certain tax exemptions, while manufacturers operating under the Definitive Regime are those national firms that pay the customary taxes to the Costa Rican federal government.
One year after the onset of the pandemic, at the time that the survey was conducted, 47% of the companies queried continued to employ teleworking. However, the organizations that used this mode of work did so temporarily. Most of these small and medium-sized companies that were engaged in manufacturing telecommuting in Costa Rica were (SMEs) operating under the Definitive Regime.
It should be noted that, before the advent of the pandemic, 11% of the companies surveyed indicated that they had already applied the teleworking modality in their companies. Its use was concentrated in the country’s Free Trade Zones (53% of the surveyed companies already applied it). In the Definitive Regime, only 4% indicated such conditions. All of these were large companies.
The national legislature created the legal infrastructure for manufacturing telecommuting in Costa Rica
For the Costa Rican Chamber of Industries (ICRC), it was of great importance that, before the pandemic, the law to regulate teleworking, Law No. 9738 published in La Gaceta on September 30, 2019, was promulgated. The Costa Rican legislature established this law, for the private sector. It established an adequate framework to regulate and implement telework as an instrument for job creation through the greater use of information and communication technologies.
According to the president of the ICRC, Enrique Egloff, “This law was decisively promoted by our organization. We actively participated in its drafting and in forging the agreements that finally allowed for its approval in the Legislative Assembly. To have manufacturing telecommuting in Costa Rica was a necessity of the business sector. This is demonstrated by the fact that at least one in 10 companies surveyed was already applying Law No. 9738 within just a few months of its enactment.”
The number of companies surveyed using teleworking went from 11% before the pandemic to 47% at the time of the survey. In the case of business entities operating under the Definitive Regime, the percentage of companies prior to implementing the law and the present has multiplied by a factor of ten 10. (It increased from 4% to 42%). In the case of companies located in Free Zones, it rose from 53% to 87%. It is significant that, in the Definitive Regime, the medium and small companies surveyed, which did not have the teleworking modality before the pandemic, report that 35% and 14% of them, respectively, are currently engaged in manufacturing telecommuting in Costa Rica. In comparison, in large companies, the use of telework went from 12.5% to 81% of the companies consulted.
Additionally, the companies that used off-site employment prior to the pandemic reported an average percentage of teleworking of 5%. This is a percentage that increased to 12% for the group of companies currently using it. Thus, the data provided by the surveyed companies allows observers to estimate that in the country’s formal manufacturing industry, 10% of employees are operating in telework mode. This figure represents around 14,500 workers. This is important data because, in a manufacturing company, it is typical that between 60% to 80% of the payroll consists of employees directly linked to production and distribution processes. Very few, if any, of this group of workers would have the ability to telecommute.
“The significant increase that our survey demonstrates in the use of teleworking in the industrial sector is largely due to the fact that Law 9738 provided the necessary legal security so that industrial companies could take advantage of teleworking. This allowed them to have continuity in their operations. Additionally, manufacturing telecommuting in Costa Rica has favored compliance with health protocols within companies. These outcomes have been achieved, for example, by facilitating compliance with regulations regarding physical distancing between workers. It has also provided protection for employees with risk factors associated with Covid-19 and has limited the number of meetings taking place in closed spaces,” Egloff indicated.
Finally, concerning the companies’ plans for the remainder of 2021, 74% of the total respondents to the survey have indicated that they will maintain employees working off-site. On the other hand, 19% of those surveyed have indicated that they will reduce the number of individuals working in this mode and, further, 6% have stated that they will eliminate its use altogether. This last option is present mainly in small and medium-sized companies of the Definitive Regime (17% and 13% respectively). In the case of large companies in the Definitive Regime, 8 out of 10 companies will maintain its use. In contrast, in companies in the Free Trade Zones, 3 out of 10 companies indicate that they will reduce the number of distance workers.
The ICRC, as indicated in a recent report entitled “Challenges and opportunities of teleworking in Latin America and the Caribbean” (July 2021) has found that, due to the effects of the pandemic, off-site working is here to stay in the region. Results have demonstrated that the industrial sector in Costa Rica will not be the exception to this trend, and telecommuting will continue to be an option that will generate new opportunities for both companies and their employees.
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