Companies accelerate their pay rise plans for employees outside of the agreement

The inflation rate forces companies to reconsider their annual projections. Salary increases for non-contracted employees are no exception. a month away, the plans of the companies changed: while in Junecompanies have moved on to reach a cumulative wage budget of about 60/62%, in that of July we are already talking about 67%.

“In a month we already have a difference of 6 or 7 points”, warned Clarín, Marcela Angeli, Director of Work & Rewards at Willis Towers Watson (WTW).

According to a report by WTW, if we go back to May, the negotiations of the companies with their headquarters, region or with the owner of the organization, aimed to reach a cumulative wage budget of 55%. High inflation, which was 8% in June and 7.4% in July, fully affects any forecast.

“All these changes are due to the fact that inflation estimates even at the time of drafting this report they have been modified. Towards the end of Junecompanies have predicted such inflation it would have been close to 62% per year. Already when we did this survey in July, inflation is expected to be 68% “Angels said. And he added: “We clearly know that this indicator will continue to change, which is why it is likely that companies will continue to change this wage budget when they apply new increases in October.”

According to the survey conducted by Willis Tower Watson of about 442 companies from different sectors, as of June the companies they had already approved a 52/53% increase for the full year and in July that percentage reaches 56% approved. That is, 3 points of difference in just 30 days.

“This is not all, and the most important thing is the data in which we present the percentages that companies have approved – because that budget has already been changed – plus those they are negotiating “, They warned by WTW. And this is because they assume that 56% will not be enough.

Hence the change of 7 points from one month to the next. In the previous one, the projected budget was between 60 or 61% and after just one month we are already talking about 67 / 67.1%.

Another important point that emerges from one edition to another, it has to do with the salary adjustments granted so far. This was indicated by the survey conducted at the end of June what was granted was 29% on average in the general industry and now that number has changed by 10 points and is an average of 39%..

“Also, what we are seeing is changing is the number of adjustment opportunities that companies apply during the year. The percentage of companies that plan to give one or two is decreasing and those that plan to give three, four or five, “Angels said. There are already almost 3 percentage points of difference between the companies that planned to give 3 increases in the year which is around 36/37% and is now already at 39%.

When asked if, taking into account the acceleration of the price index, your company has already changed the original wage budget, 56% of the companies surveyed said yes. Not a small percentage, 30% said not yet because it awaits the evolution of inflation in the coming months and the market trend.

Sector by sector, ranking of wage increases for 2022

Of the budget by sector, that of Construction stands out above average, with an expected increase of 72%. In second place is that of Insurers, with 71.5%.

With 70%, the supplier of Automotive, Energy, Social Work / medical and Services is in third place.

closer to the average are the sector of Iron, aluminum, mining and metallurgy, with 68%; is that of Consumption with 67.1%.

Below are Chemistry, with 65%; Fintech, with 63%, and High technology, with 62.5%.

YN