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Salaries 2024: what are companies' forecasts to compensate for inflation?

2024-02-25T22:22:23.892Z

Highlights: In 2023, only 28% of companies reached the official CPI curve with the salary adjustments made. For this year, the situation does not differ too much: the companies' budgets start with a forecast of a total accumulated increase of 180% average with an inflation base estimated at 192%. The sectors that came closest to the increase in the CPI, taking into account the salary adjustment accumulated in the year, were Fintechs (173%), Oil (184%), Industrial (177%) and Energy (180%)


The planned increases range from 145% to 210%. At least a third of the companies plan to give six increases in the year.


In the race that they have been maintaining salaries against inflation, not even

the salaries of personnel outside the agreement

- that is, those categories that do not fall into parity - are able to cover the effect of the price increase.

This year, corporations expect to grant adjustments

more often than in previous years,

although the increases would remain

below general inflation.

In 2023, only 28% of companies reached the official CPI curve with the salary adjustments made.

For this year, the situation does not differ too much: the companies' budgets

start with a forecast of a total accumulated increase of 180% average

with an inflation base estimated at

192%

according to a survey by the specialized firm WTW that was carried out among 441 companies. that operate in the local market.

And even further from the 213% inflationary increase estimated in the Market Expectations Survey published by the Central Bank.

You have to go back to 2020, the year the pandemic began, to see that the salary curve flattened the cost of living, according to this survey.

From WTW they explain that the salary adjustments projected for 2024 range from 145% to 210%.

There are 31% of companies that plan to grant six adjustments in the year,

23% that plan to give more than six and some companies plan to give monthly adjustments.

"As there is an estimate that inflation will be higher in the first months of the year, many companies are planning to make monthly adjustments in these months and then begin to space them out more," they explain in WTW.

What happened in 2023?

Last year,

wages fell 26 points behind inflation.

Employees outside the agreement received an average increase of 185%, while inflation closed at 211.4%, according to INDEC.

It is an approximate calculation since, as explained by Marcela Angeli, director of Work & Rewards at WTW, the data varies depending on “if the adjustments occurred within the 12 months of the year (January-December) or if we also include the months of January , mainly, and February.

In this way, if we only consider the average adjustments granted during the calendar year,

they were 165

% and if we add the compensatory adjustments

we reach 185%

," she clarifies.

The sectors that came closest to the increase in the CPI, taking into account the salary adjustment accumulated in the year, were

Fintechs (173%), Oil (184%), Industrial (177%) and Energy (180% )

.

Meanwhile, Agriculture advanced (177%) and Iron, Aluminum, Mining and Metallurgy (181%).

For their part,

those with the least increases were educational entities (130%), Professional Services (145%) and medical providers (152%).

This year, when asked about the intention to grant

adjustments equal to real inflation

, the survey detected that 34% of companies have this idea “under analysis.”

33% answered categorically “yes” and an equal percentage said “no.”

Other

mechanisms

that corporations evaluate to compensate salaries against inflation and devaluation include: providing

salary advances

;

Communicate to employees in advance the salary adjustments to be granted in future months and grant

additional amounts to the salary through payment platforms

(for example, for consumption in supermarkets, fuel, etc.).

Another instance is "pay a one-time bonus or

an extraordinary bonus

."

In this regard, they say in WTC that "companies are clearly getting approvals to apply some measure that does not imply a loss with respect to inflation when the employee actually receives the payment."

Source: clarin

All business articles on 2024-02-25

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