With inflation on the decline, Companies are already adjusting their forecasts for salary increases. At the same time that the Government and private consultants anticipate that May closed below 5%, the frontline companies with operations in Argentina they recalculate in the face of this new scenario.
Their projections begin to lower between 3 and 4 percentage points on average versus their estimates from the end of April and cut the number of planned increases: From between six and eight annual adjustments that they had been giving due to inflationary acceleration, they now expect to grant between four and six. The proportion of those who plan to give monthly updates also falls.
This is revealed by the latest flash survey carried out by the Talent Management and Compensation division of the consulting firm. WTW among 472 firms that participated from more than 25 sectors. From the survey, it appears that The 190% that planned to give a salary increase in 2024 went to 186%.
Fewer and more widely spaced salary increases
Marcela Angelidirector of Work & Rewards at WTW, considered that mostly They will wait for the decline in inflation to consolidate before making or requesting major changes in salary budgets from their parent companies, even if 6% already plan to reduce it and 65% analyze what to do.
In that sense, Angeli announced that This trend will be seen more strongly in the next surveys. “A more marked reduction is noted in the agriculture (31 points), communications (20) and oil (12) sectors.”he added.
While 26% of the firms surveyed by WTW plan to give more than six increases this year, 74% plan to give between four and six: 29% will give six, 21% will give four, 20% will give five and 4% will give less than four.
Mercer detected the trend in a previous survey, Trends in Salary Increases (TISA), in which 481 companies lowered their inflation forecast and They adjusted the projected increases by 2 points since March. By case, logistics firms They planned annual increases of 241% and They lowered them to 210%. The same thing happened in financial serviceswith salaries that would rise 239% and now they expect an increase of 203%. However, both will pay above the market average.
About, Paula Pia Arietdirector Management Consultantsconfirmed the panorama, and added that, according to the data managed by the firm, 75% of companies are considering changing the payment format starting from the second semester. “Companies that planned monthly increases will go to quarterly and those that planned bimonthly to four-monthly, possibly going to semiannual in 2025, if the decline in inflation is consolidated,” he analyzed.
“It is a complex and challenging scenario that impacts not only remuneration, but also competitiveness and the potential to attract and retain talent. With adjustments in utility rates and consumption affecting purchasing power, Union pressure and the movements of the most dynamic sectors will mark the behavior of salaries and their periodic review“, he concluded Damian Vazquezpartner of PwC Argentina.
Expectations are also lower on the applicants’ side.. According to the latest Labor Market Index of Boomerangwhich measures every month the salary sought by candidates for job searches published on its employment portal, The average gross salary requested was $754,943 per month, with an increase of 6.87% compared to the previous month, when April inflation was 8.8%. In that sense, despite efforts to keep salaries competitive, Salaries continue to lag behind the general increase in prices.
