One of the most “touchy” subjects when doing commerce in Costa Rica is the much debated Christmas bonus or Aguinaldo, that must be paid to every employee in Costa Rica during the month of December.

This bonus is calculated by adding up all of the payments made to the employee each month for the last year, and then dividing it by 12. I suppose you could call it an extra months pay on top of the December wages, but it is actually slightly higher then an extra months pay if you have helped the employee with food or other expenses during the year. As those would also get added in the calculation before diving it by 12. The Aguinaldo must be paid as it is the law in Costa Rica.

If you listen to the radio and television stations over Christmas and hear them ask callers and random people in Costa Rica what they are going to do with their Christmas bonus, the majority will be using it for big screen TV’s, gifts, or to party with their friends. Which makes sense, I suppose, if you put yourself in their shoes as employees. They have worked hard all year long, and now they want to celebrate a bit and enjoy life. But as an employer there are things you can be doing to educate your employees on how to provide for themselves while working with you.

Below we will take a look at how educating your employees can be empowering for them and the country of Costa Rica.

Reinvestment in the company that feeds them

As a business owner who thinks outside the box, you should be offering your employees the option to reinvest in the company that employs them. This model is used in North America and makes each employee want to work harder. As the success of the business directly impacts money to each employee and their long-term employment. West Jet in Canada does this really well, their company slogan is “we are not just employees, we are also owners.” This allows each employee to take pride in what they are doing and understand that there reinvestment in the company has implications for the entire duration of their professional career. Just make sure to have everything documented with a good lawyer and retain controlling shares of your business, unless you eventually want to get out of the business of course.

Building infrastructure together as Costa Ricans

In Costa Rica many of the systems you would take for granted in North America or Europe, are not in place here. As an example, there are more private security and police forces here then Government employed security or police forces. This is due to the exponential rise of commerce in the country from foreigner investors amongst other reasons. Which leaves a great opportunity for people who receive the Aguinaldo to take advantage of this private sector.

Lets say your employee makes $1500 per month, and their Aguinaldo total comes out to just that amount as you did not give them any additional money over the last 12 months other then their salary. If the employee takes that $1500 bonus and gets together with 10 of his or her friends to lease a commercial space in an office building. Together they have the collective buying power of $15,000. The monthly lease on the commercial space is $500. Now within this commercial space they setup a web server room and a basic call center. If they execute this properly, they can offer customer service and web server hosting to the private security sector in Costa Rica and make some strong residual income. If you are wise in educating your employees, then they may have a share in the new business for you. Perhaps even your company can use the new web servers as they are faster then the ones that you are currently using, and they give you a localized IP address, which we all know is good for search results. This creates a win/win situation. Your company has technology infrastructure which is better then previous, and you have access to private security forces to safeguard your business holdings.

Term deposits with Government banks: franchise opportunity

A really solid idea for any employee who can afford it is to start a term deposit with one of the Government banks here in Costa Rica. I was recently in Banco Nacional and they are offering some outstanding rates on 12 month investments, somewhere in the range of 10%. If your employee who received $1500 for their Aguinaldo, invests this in a 12 month term deposit and does this for 10 years in a row, every year adding the same amount, they can end up with close to $20,000 in 10 years. Which is no small chunk of money here in Costa Rica.

Once the employee reaches enough money or the 10 year mark, whichever comes first, you can have them turn your business into a franchise in another city of Costa Rica. Where they oversee one location themselves and pay you a monthly licensing fee for the use of the company brand name. Most likely this is a long shot, but you never know what employees will do or say until you speak with them.

If you have time and liked this article, consider leaving a comment below with some additional thoughts or clicking the “like” button below to be added to our Facebook page to receive ongoing Costa Rica focused News articles. Happy New Year and good luck with changing your company culture using the above methods.