Tom Kadala on the Hispanic Consumer

Opinion: Hispanic Data Sources may no longer be Reliable

Just when you thought you had a solid grasp of the statistics available on the growing Hispanic population, new numbers emerge. The new statistics support the same direction of growth but at a faster rate. If what has been said about the numerous opportunities to be gained from selling to Hispanic consumers, has not yet impressed you, perhaps the adjusted numbers will.

Recently, three Latin American Associations (Venezuelan, Colombian, Ecuadorian) organized a Hispanic Market Forum in which Jeff Passel, a Senior Research Associate for the PEW Hispanic Center in Washington DC, unveiled the 2008 adjusted numbers for Hispanics. According to Mr. Passel, these new numbers may be telling us a different story.

For the past year experts believed that by 2050, 25% of the US population would be of Hispanic descent for a total of 100 million Hispanics. The upwardly adjusted numbers - according to the PEW Hispanic Center - are now closer to 30% with an expected 128 million Hispanics. The 28 million difference from this years projections as compared to last year’s numbers presents a potential red flag for Hispanic data source favorites (i.e. U.S. Census Bureau and Nielsen Research.)

If in one year experts readjusted their projections for the Hispanic population in 2050 from 100 million to 128 million (a 28% increase), what additional adjustments can one expect to read by next year? ...another 28% increase? Perhaps these data experts who make their predictions based on data and trends available to them today, may need to re-evaluate their assumptions more carefully before releasing their predictions. Underestimating projections by 28% should encourage data buyers to demand an explanation that details their data collection methodologies.

The implications of underestimating population growth ultimately affects wealth generation and living standards. For example, with more Hispanics predicted by 2050, economists have had to readjust their numbers to reflect more wage earners and buying consumers. Economists projections for the Hispanic purchasing power has been readjusted from the previously accepted $1 trillion by 2010 to $1 trillion by 2008 and $2 trillion by 2015 (PEW). This aggressive timetable is quite startling and further supports the unpredictability of Hispanic consumer markets going forward.

To put these numbers into perspective, one should consider that for the 50 or so years that it took Hispanics to achieve the first $1 trillion of purchasing power, the projected next $1 trillion will take only seven years. Does this trend suggest that subsequent $1 trillion increases in Hispanic purchasing power will take less than seven years? What will be the Hispanic purchasing power in 2020? ... and 2030? Should we expect more data revisions from the experts? Could it be that the data available regarding Hispanics today is no longer reliable?

Tom Kadala is the president of ResearchPAYS, Inc., a strategic business consulting firm dedicated to the development and expansion of Hispanic consumer markets. - (www.researchpays.net). Mr. Kadala can be reached at tom@researchpays.net.

Opinion: Client Support is Crucial to the Success of any Diversity Program

For the past two decades, efforts to increase minority recruits and multi-cultural awareness at the workplace seems to be gaining traction. At a top Fortune 1000 company, where regulatory commissioners in charge of monitoring minority hires had already delivered five warnings, the newly installed diversity officer took great pride in her ability to show serious improvements by directly involving the firm’s 700+ workforce. Recently placed among the list of top business women to watch for, she runs her one-person operation with the tenacity of a large department. To her credit she has single-handedly founded various career growth-oriented events for young minority prospects.

One of these events, the company’s Annual International Fair, caught my attention. At this event all company employees were invited to share their personal heritage with their colleagues. According to her, the response was overwhelming. Not only were the Hispanic, African American and Asian cultures present, but other cultures as well such as the Irish, Slavic and British. To her surprise, many employees had lost touch with their heritage and were intrigued to learn of each other’s backgrounds. As though on cue, they gravitated with genuine interest to their next of kin. The event was so successful that this year’s Annual International Fair will require more space and the help of interns.

Despite the extraordinary success of this one Fortune 1000 company, some questions remain unanswered. Such as, “Just how much of a competitive advantage can a ‘change in attitude’ towards heritage commonality offer a corporation?” Or, “Why was the diversity department of this Fortune 1000 company run by only one individual?” “If management sees value from having a diverse workforce, why then are they so reluctant to make a serious financial commitment; for example, a full-fledged Diversity department with supporting staff members and a meaningful budget.

Perhaps, an explanation can be found outside the workplace. In the case of this Fortune 1000 company, some of their minority staff members admitted that despite their efforts to contribute their diverse talents, the ultimate mandate came from their corporate clients. Many of their corporate clients lacked multi-cultural appreciation and would unwittingly set unrealistic expectations for projects involving minority-based markets. They were unaware that today, these complex and diverse markets require more patience and larger budgets than may be deemed acceptable.

Without their corporate client’s direct support any company’s efforts to invest in diversity-awareness initiatives will always remain compromised. On occasion a company might hire a superstar employee who may make a few inroads, but as long as their corporate client’s refuse to financially recognize diversity solutions, the true value of having diversity in the workplace will never reach its full potential. To connect the wires, management must seek ways to enlighten and educate their corporate clients as well as their vendors of the potential value of fostering diverse talent in the workplace.

Tom Kadala is the president of ResearchPAYS, Inc., a strategic business consulting firm dedicated to the development and expansion of Hispanic consumer markets. - (www.researchpays.net). Mr. Kadala can be reached at tom@researchpays.net.

Opinion: To Survive Companies must Learn to Leverage Hispanic ’Raw’ Talent

The personal hardships recently brought about by the economic recession in the US are not unfamiliar to most Hispanics. In fact, the main reason that Hispanics emigrated to the U.S. was to escape from far worse economic conditions caused by steep unemployment, rampant political corruption, and runaway inflation in their respective countries. For them, losing their homes in the US to a sub-prime loan debacle or their jobs as a result of an economic downturn was probably more bearable than not coming to the US at all!

Much can be said about individuals who can withstand unexpected changes in their lives by relying on their own initiative and intuition to get by. Corporations in search of qualified candidates not adverse to taking calculated risks or ‘thinking-out-of-the-box’ should consider hiring Hispanics to manage a team, a department, or a business unit - especially during this recession. The innate abilities of Hispanics to cope with a wide range of business and real-life situations far exceeds even what the best business schools can deliver.

If Hispanics are such ideal candidates, why then do so many corporations fail to attract or retain them? On the flip side of this statement, one might also add, why do so many hired Hispanics disappoint employers by underperforming or leaving their position to return home?

After listening to managers repeatedly complain about their Hispanic hires and hearing Hispanic employees griping about their inexplicable frustration at the workplace, one can begin to sense the seemingly invisible gap that is keeping one side from winning over the other. How then can these managers and their Hispanic employees arrive to a better understanding?

Ironically, what may actually help to close the gap between employers and Hispanic employees may be the economic recession itself. The final outcome, however, may look far different from what one would expect. Rather than provide a better environment to employ Hispanics, the recession may encourage corporations to outsource their services. Here’s why.

Historically, in a recession, large corporations shed jobs; hence, allowing the number of small businesses to surge. These small businesses will grow quickly by tapping on a more affordable talent pool. As the economic pendulum moves back towards job creation and prosperity, the increasing number of small businesses will mostly be Hispanic-owned. Perhaps corporations could capitalize on this trend early by offering a culturally-balanced entrepreneurial business environment that resembles a small business.

Tom Kadala is the president of ResearchPAYS, Inc., a strategic business consulting firm dedicated to the development and expansion of Hispanic consumer markets. - (www.researchpays.net). Mr. Kadala can be reached at tom@researchpays.net.

Opinion: Hispanic Children Feed Camels rather than Reindeer

Up North… “T’was the night before Christmas, when all through the house not a creature was stirring, not even a mouse...”

While Down South… The balmy trade winds carried the songs of carolers who stopped from door to door to visit friends, share a special meal, or break up a “piñata.” Stashed away is a figure of jolly ole Saint Nick with his rosy cheeks, white beard and red suit to remind children that the Child Jesus would soon arrive bearing gifts for all.

But the moment of greatest anticipation wasn’t Christmas at all, but rather the day (January 6) when the Three Kings traveled on their camels to visit Baby Jesus bearing gifts of Gold, Frankincense, and Myrrh. On the night before their arrival, January 5th, children from all over Latin America fill a plate or shoe box with grass so the camels can feast while the Three Kings leave them gifts.

...and so it happens throughout most Latin countries during the Christmas season. There are some interesting subtle variations from each Latin American country. A few are listed below:

In Mexico, Christmas celebrations begin on December 16, and for nine days children dressed in elaborate costumes representing Mary, Joseph, and the shepherds, reenact Biblical scenes from the Nativity. Celebrations culminate with the traditional splitting of various piñatas filled with candy.

In Puerto Rico, Christmas eve begins with carolers playing traditional instruments and singing holiday songs, at designated doorsteps of family and friends. As they go from home to home and grow in numbers, the carolers are finally invited in at their last stop for a traditional chicken soup. On Christmas Day, children open a few presents not from Santa but rather from their parents. Some homes may include images of Santa as part of the overall festive decorations. However, the children anxiously await for their gifts on the magical day when the Three Kings arrive.

In Venezuela, the Nativity scene is placed beneath a Christmas tree. At midnight on Christmas Eve, the Child Jesus is believed to leave gifts for the children under the tree. Unlike Puerto Rico and Mexico the major gifts are given on Christmas Day followed by smaller gifts, if any, on Three Kings Day.

In Dominican Republic, the influence of Haitian superstition also referred to as “voodoo” is evident. Before the New Year, residents wishing for good luck and fortune are expected to thoroughly clean their homes and replace their old clothes by December 31. For those that cannot afford a Christmas tree, they decorate their homes with branches painted in white to resemble the “snow” from a white Christmas.

Can you imagine Christmas without Santa Claus? Most Hispanics do.

Tom Kadala is the president of ResearchPAYS, Inc., a strategic business consulting firm dedicated to the development and expansion of Hispanic consumer markets. - (www.researchpays.net). Mr. Kadala can be reached at tom@researchpays.net.