After the inflationary leap it is back to 2022 an unpredictable year in terms of wages For uncooperative staff (those categories that are not part of the parity), the companies project 2023 with the largest number of increases in the year and an average percentage increase one and a half points less than the estimated inflation for the period.
If last year the annual budgets were revised up to doubling, this year they start with a total cumulative increase forecast of 83.8% on averagewith an inflation base estimated at 85.2% for 2023.
The data correspond to the latest WTW Wage Increase Survey, conducted in January among 417 companies across 21 business sectors. According to this survey, increases of an average of 39.7% will be recorded in the first half of the year.
These will be the sectors where the greatest increases will be seen construction, banks and financial institutions and oil. Among the companies that will give the smallest raises are insurers, agricultural companies and human and animal health sciences.
“Estimates, projections, everything is subject to change,” warns Marcela Angeli, director of Talent Management and Compensation at WTW. “But I don’t think inflation will go to 200 and that it will happen again what happened last year, to come out with a forecast of 40% and end up doubling it,” she says.
However, with these scenarios of so much uncertainty “companies already have the dynamics to manage like this and they modify their original budget several times during the year”, says the expert.
Two other studies reached similar projections of wage increases for unemployed workers in 2023. The 135 companies PwC consulted in December for its Salary Projection Survey estimated an average adjustment of 81.64%.
For its part, the consulting firm HuCap Compensation Study, which surveyed 115 companies in November, predicted an average increase of 80.20%. “Many of the participating companies mentioned this the defined percentage may vary”, explains Natalia Terlizzi, CEO of HuCap.
Keeping up with inflation seems to be the main problem. In fact, according to the WTW survey, only 15% of companies have a policy of guaranteeing employees a wage adjustment equal to or greater than inflationeven when staying up-to-date becomes an imperative to retain scarce talent.
“Those 15% that guarantee to follow inflation are rather focused on the technology sector, fintech or companies that part of their income is directly generated in dollars. Even some multinationals with few local employees,” Angeli points out.
“What happened last year, when inflation was expected to be 55% and it went to 100, was a situation we weren’t used to” observes Federico Barni, CEO of Jobint.
“With these unpredictable fluctuations, it’s very difficult for a company to plan for increases,” he adds. The good news, she assures, is that despite this unpredictability “75% of organizations plan to onboard new talent during 2023, which allows them to project a busy job market for the next year”.
Compensate
Even when non-par wages don’t keep pace with inflation, “companies make the effort to go adjusting the rest of what constitutes the total remunerationsays Angels.
Amounts such as childcare, mileage in the case of company cars, payment via the Internet, must necessarily be adjusted. he kept doing it 3, 4 or 5 times,” Angeli says.
This is one of the strategies that will be maintained in 2023. The WTW report proves it Half of the companies consulted expect 4 wage adjustments and 26%, 3. Only 1% will make a single adjustment in the year, 8% will make it twice, while 5% will choose to adjust 5 times and 9%, more than 5.
In the first half of the year, April will be the most chosen month for adjustments (47% of companies), followed by March (32%), January (30%) and June (24%).
HuCap revealed something similar in a recent consultation: “54% of companies will provide the raise in 4 opportunities, 7% in 5 guidelines, and 7 out of 10 companies will make between 4 and 5 adjustments. It continues to accentuate tendency to give increases in the greatest number of sectionsTerlizzi says.
inflationary impact
Additionally, organizations “add other strategies that help compensate for what they can’t pass into salary, such as improving the benefits package and work-life balance practices or increasing variable compensation for performance and goals,” Terlizzi says.
Some companies include dollars in the annual bonus payment for management levels. According to the WTW survey, in 2023, 7% of organizations surveyed will pay their annual bonus in dollars to an overseas account, 5% will do so with a combination of Argentine pesos and dollars, and 3%, with dollars on an overseas account local account.
“The HR areas have gotten very creative,” Barni says. “They try to be flexible, extend licenses, allow them to work from anywhere, and allow employees the freedom to work hybrid. Also compensated with non-salary related pay issues. Payment in hard currency is one of them,” she points out.
the year that is gone
Over the course of 2022, employees outside the collective agreement received an average accumulated wage increase of 88.2%, according to the WTW survey. However, that number is not closed.
27% of companies will make extraordinary wage adjustments in these first months of 2023, corresponding to the previous year, to compensate for salary adjustments not granted. Another 13% are analyzing it.
According to the consultant, this is a different figure compared to previous years.
The “catchup,” as they call this late adjustment, will average 17%. More than half of the companies that ordered it granted it in January. 23% will do so in February, 15% in March and 8% in April. Until then, the final percentage of the 2022 increases will not be closed.
“It’s our first time going in February and it wasn’t closed the previous year,” says Angeli.
According to Terlizzi, this “recovery” not only takes into account the final inflation values for 2022, but also “the increases that the unions could negotiate in its ‘review clauses’ for agreed personnel”.
Considering this extraordinary adjustment, the WTW report shows that at least 15 sectors’ median 2022 wage increases will be higher than the 94.8% recorded by the INDEC consumer price index for the 12 months of last year.
At the top of the list there are oil companies (median 109.1%), steel, aluminium, mining and metallurgical (105.5%) and construction (101.1%) companies.
The median of the increases of the other 10 surveyed sectors was lower than the CPI.
Career
Wages outside the deal have been falling with inflation for nearly a decade, except in 2015 and 2017, when increases outpaced the INDEC consumer price index by 4.1 and 2.4 points respectively percentages, according to WTW data.
After lagging by more than 10 points in 2018 and by more than 6 points in 2019, wages tied the rise in the cost of living in 2020 and fell by 1.8 points in 2021. The gap widened again last yearwith the cost of living rising by 5 points above the increase in wages.
“There is very significant pressure on organizations to continue to maintain profit margins. And one of the many adjustment variables is payroll,” explains Marcela Agenli, Director of Talent Management and Compensation at WTW. “Forever inflation is an indicator, but it can’t be followed 100%. There are few companies that can do this,” he adds.
In this context, “the wage earner he got used to lowering the basket and adapting it as much as possible to wage growth,” says Angeli.
In the same sense, underlines Natalia Terlizzi, CEO of HuCap, “staff out of agreement was the adjustment variable in the years in which the companies have not been able to transfer what was agreed for personnel in the agreement, which in general terms tries to keep up with inflation”.
In this sentence, “the ‘ghost’ of superimposition is always latentThat’s why many organizations focus on hierarchical positions and especially on key ones in their structures, to transfer a few more points when possible, or even focus on their variable remuneration to try to avoid this problem”.
Source: Clarin
